----

----

| Maryland                                                       |   | 20-4797391                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| 6814 Goshen Road, Edwardsville, IL      |   | 62025      |
|-----------------------------------------|--------|------------|
| (Address of principal executive office) |   | (Zip Code) |

|   | Large accelerated filer o                                           | Accelerated filer           |
|--------|---------------------------------------------------------------------|-----------------------------|
|   |                                                                |                        |
|   | Non-accelerated filer o (do not check if smaller reporting company) | Smaller reporting company T |

| Class                                  |   | Outstanding November 11, 2010 |
|----------------------------------------|--------|-------------------------------|
| Common Stock, par value $.10 per share |   | 7,889,565                     |

----

----

----

OR

|                           |                                                   |                                                                                  | PAGE NO. |
|--------------------------------|--------------------------------------------------------|---------------------------------------------------------------------------------------|----------|
|                           |                                                   |                                                                                  |     |
|                           |                                                   |                                                                                  |     |
| PART I - Financial Information |                                                   |
|                           |                                                   |                                                                                  |     |
|                           | Item 1.                                                | Financial Statements (Unaudited)                                                      |     |
|                           |                                                   |                                                                                  |     |
|                           | Consolidated Balance Sheets                            | 3                                                                                     |
|                           |                                                   |                                                                                  |     |
|                           | Consolidated Statements of Operations                  | 4                                                                                     |
|                           |                                                   |                                                                                  |     |
|                           | Consolidated Statements of Comprehensive Income (Loss) | 5                                                                                     |
|                           |                                                   |                                                                                  |     |
|                           | Consolidated Statements of Cash Flows                  | 6                                                                                     |
|                           |                                                   |                                                                                  |     |
|                           | Notes to Consolidated Financial Statements             | 8                                                                                     |
|                           |                                                   |                                                                                  |     |
|                           | Item 2.                                                | Management's Discussion and Analysis of Financial Condition and Results of Operations | 23       |
|                           |                                                   |                                                                                  |     |
|                           | Item 3.                                                | Quantitative and Qualitative Disclosures about Market Risk                            | 38       |
|                           |                                                   |                                                                                  |     |
|                           | Item 4.                                                | Controls and Procedures                                                               | 41       |
|                           |                                                   |                                                                                  |     |
|                           |                                                   |                                                                                  |     |
| PART II - Other Information    |                                                   |
|                           |                                                   |                                                                                  |     |
|                           | Item 1.                                                | Legal Proceedings                                                                     | 42       |
|                           |                                                   |                                                                                  |     |
|                           | Item 1A.                                               | Risk Factors                                                                          | 42       |
|                           |                                                   |                                                                                  |     |
|                           | Item 2.                                                | Unregistered Sales of Equity Securities and Use of Proceeds                           | 42       |
|                           |                                                   |                                                                                  |     |
|                           | Item 3.                                                | Defaults Upon Senior Securities                                                       | 43       |
|                           |                                                   |                                                                                  |     |
|                           | Item 4.                                                | [Reserved]                                                                            | 43       |
|                           |                                                   |                                                                                  |     |
|                           | Item 5.                                                | Other Information                                                                     | 43       |
|                           |                                                   |                                                                                  |     |
|                           | Item 6.                                                | Exhibits                                                                              | 43       |
|                           |                                                   |                                                                                  |     |
| Signatures                     | 44                                                     |

----

Index

nso

| Assets                                                           |   | September 30, 2010 |        |   | December 31, 2009 |   |
|------------------------------------------------------------------|--------|-------------------------|-------------|--------|------------------------|--------|
| Cash and due from banks                                          |   | $                       | 8,002,812   |   |                   | $      | 14,104,442 |   |
| Interest-earning deposits                                        |   |                    | 13,796,863  |   |                   |   | 14,306,726 |   |
| Federal funds sold                                               |   |                    | 40,520,674  |   |                   |   | 19,585,586 |   |
| Total cash and cash equivalents                                  |   |                    | 62,320,349  |   |                   |   | 47,996,754 |   |
| Interest-earning time deposits                                   |   |                    | 1,700,000   |   |                   |   | - |   |
| Securities available for sale                                    |   |                    | 82,747,717  |   |                   |   | 86,407,138 |   |
| Federal Home Loan Bank stock                                     |   |                    | 6,306,273   |   |                   |   | 6,306,273 |   |
| Loans, net of allowance for loan losses                          |   |                    |        |   |                   |   |   |   |
| of $5,445,404 and $6,316,829, respectively                       |   |                    | 392,203,558 |   |                   |   | 410,110,923 |   |
| Loans held for sale                                              |   |                    | 599,280     |   |                   |   | 1,787,900 |   |
| Property and equipment, net                                      |   |                    | 10,720,038  |   |                   |   | 11,096,748 |   |
| Accrued interest receivable                                      |   |                    | 1,975,546   |   |                   |   | 2,183,520 |   |
| Prepaid Federal Deposit Insurance Corporation insurance premiums |   |                    | 2,466,262   |   |                   |   | 2,993,995 |   |
| Goodwill                                                         |   |                    | 11,385,323  |   |                   |   | 11,385,323 |   |
| Core deposit intangible                                          |   |                    | 1,197,001   |   |                   |   | 1,480,001 |   |
| Foreclosed assets                                                |   |                    | 1,732,742   |   |                   |   | 1,084,548 |   |
| Mortgage servicing rights                                        |   |                    | 675,520     |   |                   |   | 680,776 |   |
| Other assets                                                     |   |                    | 2,611,048   |   |                   |   | 2,012,715 |   |
| Total assets                                                     |   | $                       | 578,640,657 |   |                   | $      | 585,526,614 |   |
| Liabilities and Stockholders' Equity                             |   |                    |        |   |                   |   |   |   |
| Liabilities:                                                     |   |                    |        |   |                   |   |   |   |
| Deposits:                                                        |   |                    |        |   |                   |   |   |   |
| Non-interest bearing deposits                                    |   | $                       | 30,913,897  |   |                   | $      | 49,533,776 |   |
| Interest bearing deposits                                        |   |                    | 407,139,795 |   |                   |   | 393,020,692 |   |
| Total deposits                                                   |   |                    | 438,053,692 |   |                   |   | 442,554,468 |   |
| Federal Home Loan Bank advances                                  |   |                    | 26,920,000  |   |                   |   | 39,924,000 |   |
| Securities sold under agreements to repurchase                   |   |                    | 27,633,279  |   |                   |   | 18,936,168 |   |
| Subordinated debentures                                          |   |                    | 3,963,256   |   |                   |   | 3,930,208 |   |
| Accrued interest payable                                         |   |                    | 670,601     |   |                   |   | 1,211,552 |   |
| Other liabilities                                                |   |                    | 3,161,805   |   |                   |   | 2,041,941 |   |
| Total liabilities                                                |   |                    | 500,402,633 |   |                   |   | 508,598,337 |   |
|                                                             |   |                    |        |   |                   |   |   |   |
| Stockholders' Equity:                                            |   |                    |        |   |                   |   |   |   |
| Preferred stock, $.10 par value; 10,000,000 shares               |   |                    |        |   |                   |   |   |   |
| authorized; no shares issued                                     |   |                    | -           |   |                   |   | - |   |
| Common stock, $.10 par value; 20,000,000 shares authorized;      |   |                    |        |   |                   |   |   |   |
| 7,911,202 and 7,960,523 shares issued and outstanding            |   |                    |        |   |                   |   |   |   |
| at September 30, 2010 and December 31, 2009, respectively        |   |                    | 791,120     |   |                   |   | 796,052 |   |
| Additional paid-in capital                                       |   |                    | 62,262,169  |   |                   |   | 62,569,654 |   |
| Retained earnings                                                |   |                    | 14,339,256  |   |                   |   | 12,451,069 |   |
| Accumulated other comprehensive income                           |   |                    | 1,427,469   |   |                   |   | 1,726,434 |   |
| Unearned Employee Stock Ownership Plan shares                    |   |                    | (581,990    | )      |                   |   | (614,932 | ) |
| Total stockholders' equity                                       |   |                    | 78,238,024  |   |                   |   | 76,928,277 |   |
| Total liabilities and stockholders' equity                       |   | $                       | 578,640,657 |   |                   | $      | 585,526,614 |   |

|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| See Accompanying Notes to Consolidated Financial Statements. |

----

Index

Consolidated Statements 

|                                                     |   | Three Months Ended |      |   | Nine Months Ended |   |
|----------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                     |   | September 30,      |      |   | September 30,     |   |
|                                                     |   | 2010               |      |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| Interest income:                                         |   |               |      |   |              |   |   |   |   |   |   |   |
| Interest and fees on loans                               |   | $                  | 5,706,190 |   |              | $      | 5,975,400 |   |   | $ | 17,091,670 |   |   |   | 18,048,966 |   |
| Securities:                                              |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Taxable interest income                                  |   |               | 522,027   |   |              |   | 782,349 |   |   |   | 1,747,018 |   |   |   | 2,597,157 |   |
| Non-taxable interest income                              |   |               | 151,814   |   |              |   | 159,802 |   |   |   | 436,335 |   |   |   | 435,184 |   |
| Interest-earning deposits, federal funds sold, and other |   |               | 32,906    |   |              |   | 26,085 |   |   |   | 74,632 |   |   |   | 122,673 |   |
| Total interest income                                    |   |               | 6,412,937 |   |              |   | 6,943,636 |   |   |   | 19,349,655 |   |   |   | 21,203,980 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                        |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                 |   |               | 1,926,835 |   |              |   | 2,561,187 |   |   |   | 5,907,426 |   |   |   | 7,862,894 |   |
| Federal Home Loan Bank advances                          |   |               | 247,076   |   |              |   | 367,103 |   |   |   | 852,255 |   |   |   | 1,291,979 |   |
| Securities sold under agreements to repurchase           |   |               | 7,417     |   |              |   | 16,826 |   |   |   | 19,791 |   |   |   | 54,525 |   |
| Subordinated debentures                                  |   |               | 23,317    |   |              |   | 75,094 |   |   |   | 152,569 |   |   |   | 223,192 |   |
| Total interest expense                                   |   |               | 2,204,645 |   |              |   | 3,020,210 |   |   |   | 6,932,041 |   |   |   | 9,432,590 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                      |   |               | 4,208,292 |   |              |   | 3,923,426 |   |   |   | 12,417,614 |   |   |   | 11,771,390 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                |   |               | 650,000   |   |              |   | 1,000,000 |   |   |   | 1,473,000 |   |   |   | 1,668,990 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after provision for loan losses      |   |               | 3,558,292 |   |              |   | 2,923,426 |   |   |   | 10,944,614 |   |   |   | 10,102,400 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income:                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service fees on deposit accounts                         |   |               | 111,776   |   |              |   | 89,158 |   |   |   | 294,046 |   |   |   | 224,704 |   |
| Other service charges and fees                           |   |               | 73,761    |   |              |   | 73,952 |   |   |   | 253,364 |   |   |   | 197,211 |   |
| Loan servicing fees                                      |   |               | 55,550    |   |              |   | 54,613 |   |   |   | 154,448 |   |   |   | 135,095 |   |
| Gain on sale of securities                               |   |               | 200,593   |   |              |   | - |   |   |   | 663,814 |   |   |   | - |   |
| Gain on sale of loans                                    |   |               | 157,278   |   |              |   | 105,265 |   |   |   | 322,275 |   |   |   | 491,540 |   |
| Other                                                    |   |               | 99,297    |   |              |   | 9,336 |   |   |   | 118,848 |   |   |   | 34,459 |   |
| Total non-interest income                                |   |               | 698,255   |   |              |   | 332,324 |   |   |   | 1,806,795 |   |   |   | 1,083,009 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense:                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Compensation and employee benefits                       |   |               | 1,205,235 |   |              |   | 1,122,790 |   |   |   | 3,534,313 |   |   |   | 3,398,746 |   |
| Occupancy expense                                        |   |               | 340,763   |   |              |   | 370,092 |   |   |   | 1,034,397 |   |   |   | 1,087,476 |   |
| Data processing services                                 |   |               | 161,595   |   |              |   | 140,808 |   |   |   | 495,408 |   |   |   | 417,899 |   |
| Director fees                                            |   |               | 43,750    |   |              |   | 51,750 |   |   |   | 144,200 |   |   |   | 160,700 |   |
| Professional fees                                        |   |               | 98,316    |   |              |   | 204,212 |   |   |   | 239,637 |   |   |   | 597,400 |   |
| Federal Deposit Insurance Corporation insurance premiums |   |               | 181,373   |   |              |   | 173,175 |   |   |   | 575,349 |   |   |   | 602,591 |   |
| Amortization of core deposit intangible                  |   |               | 85,000    |   |              |   | 108,000 |   |   |   | 283,000 |   |   |   | 369,000 |   |
| Amortization of mortgage servicing rights                |   |               | 78,029    |   |              |   | 11,068 |   |   |   | 126,410 |   |   |   | 175,767 |   |
| Goodwill Impairment                                      |   |               | -         |   |              |   | - |   |   |   | - |   |   |   | 9,300,000 |   |
| Impairment loss on assets                                |   |               | -         |   |              |   | 355,989 |   |   |   | - |   |   |   | 355,989 |   |
| Other                                                    |   |               | 452,835   |   |              |   | 436,277 |   |   |   | 1,252,847 |   |   |   | 1,273,525 |   |
| Total non-interest expense                               |   |               | 2,646,896 |   |              |   | 2,974,161 |   |   |   | 7,685,561 |   |   |   | 17,739,093 |   |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes                        |   |               | 1,609,651 |   |              |   | 281,589 |   |   |   | 5,065,848 |   |   |   | (6,553,684 | ) |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes                                             |   |               | 554,717   |   |              |   | 70,100 |   |   |   | 1,771,010 |   |   |   | 974,496 |   |
| Net income (loss)                                        |   | $                  | 1,054,934 |   |              | $      | 211,489 |   |   | $ | 3,294,838 |   |   | $ | (7,528,180 | ) |
|                                                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted income (loss) per share (see Note 6)   |   | $                  | 0.14      |   |              | $      | 0.03 |   |   | $ | 0.42 |   |   | $ | (0.91 | ) |
| Dividends per share                                      |   | $                  | 0.06      |   |              | $      | 0.06 |   |   | $ | 0.18 |   |   | $ | 0.18 |   |

|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| See Accompanying Notes to Consolidated Financial Statements. |

----

Index

ted 

|                                                         |   | Three Months Ended |      |   | Nine Months Ended |   |
|--------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                         |   | September 30,      |      |   | September 30,     |   |
|                                                         |   | 2010               |      |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                         |   |               |      |   |              |   |   |   |   |   |   |   |
| Net income (loss)                                            |   | $                  | 1,054,934 |   |              | $      | 211,489 |   |   | $ | 3,294,838 |   |   | $ | (7,528,180 | ) |
| Other comprehensive income (loss):                           |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains (losses) on securities                      |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| arising during the period, net of tax                        |   |               | 117,215   |   |              |   | 342,806 |   |   |   | 129,195 |   |   |   | 569,946 |   |
| Reclassification adjustment for realized                     |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| gains included in income, net of tax                         |   |               | (129,382  | )      |              |   | - |   |   |   | (428,160 | ) |   |   | - |   |
| Comprehensive income (loss)                                  |   | $                  | 1,042,767 |   |              | $      | 554,295 |   |   | $ | 2,995,873 |   |   | $ | (6,958,234 | ) |
|                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| See Accompanying Notes to Consolidated Financial Statements. |   |               |      |   |              |   |   |   |   |

----

Index

lida

|                                                               |   | Nine Months Ended |         |
|--------------------------------------------------------------------|--------|-------------------|--------------|
|                                                               |   | September 30,     |         |
|                                                               |   | 2010              |         |   | 2009 |   |
| Cash flows from operating activities:                              |   |              |         |   |   |   |
| Net income (loss)                                                  |   | $                 | 3,294,838    |   |   | $ | (7,528,180 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by |   |              |         |   |   |   |   |   |
| operating activities:                                              |   |              |         |   |   |   |   |   |
| Amortization of:                                                   |   |              |         |   |   |   |   |   |
| Deferred loan origination costs, net                               |   |              | 69,451       |   |   |   | 48,249 |   |
| Premiums and discounts on securities                               |   |              | (800,513     | ) |   |   | (115,651 | ) |
| Core deposit intangible                                            |   |              | 283,000      |   |   |   | 369,000 |   |
| Mortgage servicing rights                                          |   |              | 126,410      |   |   |   | 175,767 |   |
| Amortization of fair value adjustments on:                         |   |              |         |   |   |   |   |   |
| Loans                                                              |   |              | (45,000      | ) |   |   | (50,300 | ) |
| Time deposits                                                      |   |              | (35,000      | ) |   |   | (125,500 | ) |
| Federal Home Loan Bank advances                                    |   |              | (4,000       | ) |   |   | (32,999 | ) |
| Subordinated debentures                                            |   |              | 33,048       |   |   |   | 33,048 |   |
| Investment securities                                              |   |              | (42,250      | ) |   |   | (41,700 | ) |
| Property and equipment                                             |   |              | 12,054       |   |   |   | 12,054 |   |
| Goodwill impairment                                                |   |              | -            |   |   |   | 9,300,000 |   |
| Impairment loss on assets                                          |   |              | -            |   |   |   | 355,989 |   |
| Provision for loan losses                                          |   |              | 1,473,000    |   |   |   | 1,668,990 |   |
| Depreciation expense                                               |   |              | 451,070      |   |   |   | 538,206 |   |
| ESOP expense                                                       |   |              | 39,833       |   |   |   | 49,409 |   |
| Gain on sale of securities available for sale                      |   |              | (663,814     | ) |   |   | - |   |
| Gain on sale of loans                                              |   |              | (322,275     | ) |   |   | (491,540 | ) |
| Gain on sale of property and equipment                             |   |              | (40,289      | ) |   |   | - |   |
| (Gain) loss on sale of foreclosed real estate                      |   |              | (39,385      | ) |   |   | 47,638 |   |
| Proceeds from sales of loans held for sale                         |   |              | 12,942,493   |   |   |   | 24,232,976 |   |
| Originations of loans held for sale                                |   |              | (11,431,598  | ) |   |   | (24,426,556 | ) |
| Change in assets and liabilities:                                  |   |              |         |   |   |   |   |   |
| Decrease (increase) in prepaid Federal Deposit Insurance           |   |              |         |   |   |   |   |   |
| Corporation insurance premiums                                     |   |              | 527,733      |   |   |   | (136,142 | ) |
| Decrease in accrued interest receivable                            |   |              | 207,974      |   |   |   | 210,092 |   |
| Increase in mortgage servicing rights                              |   |              | (121,154     | ) |   |   | (251,659 | ) |
| Increase in other assets                                           |   |              | (598,333     | ) |   |   | (217,843 | ) |
| (Decrease) increase in accrued interest payable                    |   |              | (540,951     | ) |   |   | 209,053 |   |
| Increase in other liabilities                                      |   |              | 1,295,601    |   |   |   | 70,185 |   |
| Net cash flows provided by operating activities                    |   |              | 6,071,943    |   |   |   | 3,902,586 |   |
| Cash flows from investing activities:                              |   |              |         |   |   |   |   |   |
| Proceeds from maturity of interest-earning time deposits           |   |              | -            |   |   |   | 25,847,832 |   |
| Purchase of interest-earning time deposits                         |   |              | (1,700,000   | ) |   |   | (20,637,371 | ) |
| Available for sale securities:                                     |   |              |         |   |   |   |   |   |
| Purchases                                                          |   |              | (130,758,389 | ) |   |   | (92,450,000 | ) |
| Proceeds from calls, maturities and paydowns                       |   |              | 123,597,019  |   |   |   | 100,597,630 |   |
| Proceeds from sales                                                |   |              | 11,852,666   |   |   |   | - |   |
| Decrease in loans; principal collections, net of loan originations |   |              | 14,686,957   |   |   |   | 13,953,232 |   |
| Purchase of property and equipment                                 |   |              | (46,125      | ) |   |   | (461,693 | ) |
| Proceeds from the sale of foreclosed real estate                   |   |              | 1,114,148    |   |   |   | 1,002,907 |   |
| Net cash flows provided by investing activities                    |   | $                 | 18,746,276   |   |   | $ | 27,852,537 |   |

----

Index

|                                                         |   | Nine Months Ended |        |
|--------------------------------------------------------------|--------|-------------------|-------------|
|                                                         |   | September 30,     |        |
|                                                         |   | 2010              |        |   | 2009 |   |
|                                                         |   |              |        |   |   |   |
| Cash flows from financing activities:                        |   |              |        |   |   |   |
| Net decrease in deposits                                     |   | $                 | (4,465,776  | ) |   | $ | (2,095,001 | ) |
| Net increase (decrease) in securities sold under agreements  |   |              |        |   |   |   |   |   |
| to repurchase                                                |   |              | 8,697,111   |   |   |   | (25,508,038 | ) |
| Proceeds from Federal Home Loan Bank advances                |   |              | -           |   |   |   | 5,000,000 |   |
| Repayment of Federal Home Loan Bank advances                 |   |              | (13,000,000 | ) |   |   | (14,254,920 | ) |
| Repurchase of Common Stock                                   |   |              | (319,308    | ) |   |   | (5,677,570 | ) |
| Cash dividends                                               |   |              | (1,406,651  | ) |   |   | (1,485,308 | ) |
| Net cash flows used in financing activities                  |   |              | (10,494,624 | ) |   |   | (44,020,837 | ) |
| Net increase (decrease) in cash and cash equivalents         |   |              | 14,323,595  |   |   |   | (12,265,714 | ) |
| Cash and cash equivalents at beginning of period             |   |              | 47,996,754  |   |   |   | 67,135,384 |   |
| Cash and cash equivalents at end of period                   |   | $                 | 62,320,349  |   |   | $ | 54,869,670 |   |
|                                                         |   |              |        |   |   |   |   |   |
|                                                         |   |              |        |   |   |   |   |   |
|                                                         |   |              |        |   |   |   |   |   |
|                                                         |   |              |        |   |   |   |   |   |
| Supplemental disclosures of cash flow information:           |   |              |        |   |   |   |   |   |
| Cash paid during the period for:                             |   |              |        |   |   |   |   |   |
| Interest                                                     |   | $                 | 7,478,944   |   |   | $ | 9,348,988 |   |
| Income tax payments, net                                     |   |              | 775,354     |   |   |   | 1,233,593 |   |
|                                                         |   |              |        |   |   |   |   |   |
| Non-cash transactions                                        |   |              |        |   |   |   |   |   |
| Loans transferred to foreclosed assets                       |   |              | 1,722,957   |   |   |   | 1,114,303 |   |
| Property and equipment transferred to other assets           |   |              | -           |   |   |   | 825,000 |   |
|                                                         |   |              |        |   |   |   |   |   |
| See Accompanying Notes to Consolidated Financial Statements. |   |              |        |   |   |   |   |   |

----

Index

Not

| (1) | Summary of Significant Accounting Policies: |
|-----|---------------------------------------------|

----

Index

| (2) | Intangible Assets: |
|-----|--------------------|

|                     |   | September 30, |      |   | December 31, |   |
|--------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                     |   | 2010               |      |   | 2009              |   |
|                     |   |               |      |   |              |   |
| Core deposit intangible  |   | $                  | 3,258,000 |   |              | $      | 3,258,000 |   |
| Accumulated amortization |   |               | 2,060,999 |   |              |   | 1,777,999 |   |
| Total                    |   | $                  | 1,197,001 |   |              | $      | 1,480,001 |   |

| Period                                |   | Amount |    |
|---------------------------------------|--------|--------|---------|
|                                  |   |   |    |
| Three months ending December 31, 2010 |   | $      | 77,000  |   |
| Year ending December 31, 2011         |   |   | 304,000 |   |
| Year ending December 31, 2012         |   |   | 281,000 |   |
| Year ending December 31, 2013         |   |   | 223,000 |   |
| Year ending December 31, 2014         |   |   | 116,001 |   |
| Year ending December 31, 2015         |   |   | 58,000  |   |

----

Index

| (3) | Investment Securities: |
|-----|------------------------|

|                                           |   | September 30, 2010 |       |
|------------------------------------------------|--------|--------------------|------------|
|                                           |   |               |       |   | Gross |   |   | Gross |   |   |   |   |
|                                           |   | Amortized          |       |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                           |   | Cost               |       |   | Gains |   |   | (Losses) |   |   | Value |   |
| Investment Securities:                         |   |               |       |   |   |   |   |   |   |   |   |   |
| U.S. government agency obligations             |   | $                  | 47,786,412 |   |   | $ | 1,110,304 |   |   | $ | - |   |   | $ | 48,896,716 |   |
| Corporate bonds                                |   |               | 2,096,470  |   |   |   | 51,047 |   |   |   | (58,548 | ) |   |   | 2,088,969 |   |
| State and municipal securities                 |   |               | 17,078,979 |   |   |   | 802,538 |   |   |   | (1,906 | ) |   |   | 17,879,611 |   |
| Other Securities                               |   |               | 3,501      |   |   |   | - |   |   |   | - |   |   |   | 3,501 |   |
| Mortgage-backed securities                     |   |               | 13,516,421 |   |   |   | 397,482 |   |   |   | (34,983 | ) |   |   | 13,878,920 |   |
|                                           |   |               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Investment Securities available for sale |   | $                  | 80,481,783 |   |   | $ | 2,361,371 |   |   | $ | (95,437 | ) |   | $ | 82,747,717 |   |

|                                           |   | December 31, 2009 |       |
|------------------------------------------------|--------|-------------------|------------|
|                                           |   |              |       |   | Gross |   |   | Gross |   |   |   |   |
|                                           |   | Amortized         |       |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                           |   | Cost              |       |   | Gains |   |   | (Losses) |   |   | Value |   |
| Investment Securities:                         |   |              |       |   |   |   |   |   |   |   |   |   |
| U.S. government agency obligations             |   | $                 | 47,783,283 |   |   | $ | 770,854 |   |   | $ | (39,618 | ) |   | $ | 48,514,519 |   |
| Corporate bonds                                |   |              | 2,596,146  |   |   |   | 45,710 |   |   |   | (95,938 | ) |   |   | 2,545,918 |   |
| State and municipal securities                 |   |              | 14,468,352 |   |   |   | 910,564 |   |   |   | - |   |   |   | 15,378,916 |   |
| Other Securities                               |   |              | 3,501      |   |   |   | - |   |   |   | - |   |   |   | 3,501 |   |
| Mortgage-backed securities                     |   |              | 18,815,746 |   |   |   | 1,148,552 |   |   |   | (14 | ) |   |   | 19,964,284 |   |
|                                           |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Investment Securities available for sale |   | $                 | 83,667,028 |   |   | $ | 2,875,680 |   |   | $ | (135,570 | ) |   | $ | 86,407,138 |   |

----

Index

| (3) | Investment Securities (Continued): |
|-----|------------------------------------|

|                           |   | September 30, 2010  |      |
|--------------------------------|--------|---------------------|-----------|
|                           |   |                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | Less than 12 Months |      |   | 12 Months or More |   |   | Total |   |
|                           |   | Fair                |      |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                           |   | Value               |      |   | loss |   |   | Value |   |   | loss |   |   | Value |   |   | loss |   |
|                           |   |                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds                |   | $                   | -         |   |   | $ | - |   |   | $ | 641,452 |   |   | $ | 58,548 |   |   | $ | 641,452 |   |   | $ | 58,548 |   |
| State and municipal securities |   |                | 523,785   |   |   |   | 1,906 |   |   |   | - |   |   |   | - |   |   |   | 523,785 |   |   |   | 1,906 |   |
| Mortgage-backed securities     |   |                | 4,667,883 |   |   |   | 34,983 |   |   |   | - |   |   |   | - |   |   |   | 4,667,883 |   |   |   | 34,983 |   |
|                           |   | $                   | 5,191,668 |   |   | $ | 36,889 |   |   | $ | 641,452 |   |   | $ | 58,548 |   |   | $ | 5,833,120 |   |   | $ | 95,437 |   |

|                               |   | December 31, 2009   |      |
|------------------------------------|--------|---------------------|-----------|
|                               |   |                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   | Less than 12 Months |      |   | 12 Months or More |   |   | Total |   |
|                               |   | Fair                |      |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                               |   | Value               |      |   | loss |   |   | Value |   |   | loss |   |   | Value |   |   | loss |   |
|                               |   |                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government agency obligations |   | $                   | 8,469,750 |   |   | $ | 37,800 |   |   | $ | 1,995,000 |   |   | $ | 1,818 |   |   | $ | 10,464,750 |   |   | $ | 39,618 |   |
| Corporate bonds                    |   |                | -         |   |   |   | - |   |   |   | 751,062 |   |   |   | 95,938 |   |   |   | 751,062 |   |   |   | 95,938 |   |
| Mortgage-backed securities         |   |                | 8,254     |   |   |   | 14 |   |   |   | - |   |   |   | - |   |   |   | 8,254 |   |   |   | 14 |   |
|                               |   | $                   | 8,478,004 |   |   | $ | 37,814 |   |   | $ | 2,746,062 |   |   | $ | 97,756 |   |   | $ | 11,224,066 |   |   | $ | 135,570 |   |

----

Index

| (3) | Investment Securities (Continued): |
|-----|------------------------------------|

|                                   |   | Available for Sale |       |
|----------------------------------------|--------|--------------------|------------|
|                                   |   | Amortized          |       |   | Fair |   |
|                                   |   | Cost               |       |   | Value |   |
| Due in one year or less                |   | $                  | 24,112,845 |   |   | $ | 24,294,908 |   |
| Due after one year through five years  |   |               | 30,201,412 |   |   |   | 31,449,754 |   |
| Due after five years through ten years |   |               | 3,856,101  |   |   |   | 4,078,816 |   |
| Due after ten years                    |   |               | 8,791,503  |   |   |   | 9,041,818 |   |
| Mortgage-backed securities             |   |               | 13,516,421 |   |   |   | 13,878,920 |   |
| Other securities                       |   |               | 3,501      |   |   |   | 3,501 |   |
|                                   |   |               |       |   |   |   |   |   |
|                                   |   | $                  | 80,481,783 |   |   | $ | 82,747,717 |   |

----

Index

| (4) | Loans: |
|-----|--------|

|                                        |   | At September 30, |        |   | At December 31, |   |
|---------------------------------------------|--------|------------------|-------------|--------|-----------------|--------|
|                                        |   | 2010             |        |   | 2009            |   |
|                                        |   | Amount           |        |   | Percent         |   |   | Amount |   |   | Percent |   |
|                                        |   |             |        |   |            |   |   |   |   |   |   |   |
| Real Estate Loans                           |   |             |        |   |            |   |   |   |   |   |   |   |
| One- to four-family residential loans(1)    |   | $                | 93,124,710  |   |            |   | 22.8 | % |   | $ | 98,080,406 |   |   |   | 23.4 | % |
| Multi-family                                |   |             | 23,557,022  |   |            |   | 5.8 |   |   |   | 20,946,534 |   |   |   | 5.0 |   |
| Commercial                                  |   |             | 168,291,256 |   |            |   | 41.3 |   |   |   | 179,923,276 |   |   |   | 42.8 |   |
| Construction and land(2)                    |   |             | 55,647,400  |   |            |   | 13.7 |   |   |   | 45,447,453 |   |   |   | 10.8 |   |
| Total real estate loans                     |   |             | 340,620,388 |   |            |   | 83.6 |   |   |   | 344,397,669 |   |   |   | 82.0 |   |
|                                        |   |             |        |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Commercial business(2)                      |   |             | 53,890,490  |   |            |   | 13.2 |   |   |   | 63,134,579 |   |   |   | 15.0 |   |
|                                        |   |             |        |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Consumer Loans                              |   |             | 13,081,474  |   |            |   | 3.2 |   |   |   | 12,477,438 |   |   |   | 3.0 |   |
|                                        |   |             |        |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Total loans and loans held for sale         |   |             | 407,592,352 |   |            |   | 100.0 | % |   |   | 420,009,686 |   |   |   | 100.0 | % |
| Less:                                       |   |             |        |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Undisbursed portion of construction loans   |   |             | 9,378,160   |   |            |   |   |   |   |   | 1,772,947 |   |   |   |   |   |
| Deferred loan origination fees (costs), net |   |             | (34,050     | )      |            |   |   |   |   |   | 21,087 |   |   |   |   |   |
| Allowance for loan losses                   |   |             | 5,445,404   |   |            |   |   |   |   |   | 6,316,829 |   |   |   |   |   |
|                                        |   |             |        |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Total loans and loans held for sale, net    |   | $                | 392,802,838 |   |            |   |   |   |   | $ | 411,898,823 |   |   |   |   |   |

| (1)  | Includes loans held for sale of $599,280 and $1,787,900 at September 30, 2010 and December 31, 2009, respectively.                                                                                        |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)       | Certain loans classified in the commercial business category at December 31, 2009 have been transferred into the construction and land category at September 30, 2010 as a result of a regulatory review. |

----

Index

| (5) | Asset Quality: |
|-----|----------------|

|                                                                    |   | September 30, |       |   | December 31, |   |
|-------------------------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                                                    |   | 2010               |       |   | 2009              |   |
|                                                                    |   |               |       |   |              |   |
| Loans 90 days or more past due and still accruing                       |   | $                  | 899,671    |   |              | $      | 2,580,077 |   |
| Non-accrual loans, including $11,993,033 and $10,689,777 classified as  |   |               |       |   |              |   |   |   |
| impaired as of September 30, 2010 and December 31, 2009, respectively   |   |               | 12,412,908 |   |              |   | 11,733,209 |   |
| Other impaired loans                                                    |   |               | 11,418,470 |   |              |   | 14,818,500 |   |
| Total non-performing and impaired loans                                 |   | $                  | 24,731,049 |   |              | $      | 29,131,786 |   |
|                                                                    |   |               |       |   |              |   |   |   |
| Specific allowance for loan losses on non-performing and impaired loans |   | $                  | 1,219,897  |   |              | $      | 1,909,854 |   |

| Non-performing assets and impaired loans to total assets       |   |   | 4.57  | %      |   |   | 5.16  | %      |
|----------------------------------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|
| Non-performing and impaired loans to total loans               |   |   | 6.30  |   |   |   | 7.07  |   |
| Allowance for loan losses to non-performing and impaired loans |   |   | 22.02 |   |   |   | 21.68 |   |
| Allowance for loan losses to total loans                       |   |   | 1.39  |   |   |   | 1.53  |   |

|                           |   | Nine Months Ended |       |
|--------------------------------|--------|-------------------|------------|
|                           |   | September 30,     |       |
|                           |   | 2010              |       |   | 2009 |   |
| Balance at beginning of period |   | $                 | 6,316,829  |   |   | $ | 3,895,246 |   |
| Charge-offs                    |   |              | (2,491,719 | ) |   |   | (332,284 | ) |
| Recoveries                     |   |              | 147,294    |   |   |   | - |   |
| Provision charged to expense   |   |              | 1,473,000  |   |   |   | 1,668,990 |   |
| Balance at end of period       |   | $                 | 5,445,404  |   |   | $ | 5,231,952 |   |

----

Index

| (6)  | Earnings (losses) per Share: |
|-----------|------------------------------|

|                                          |   | Three Months Ended |      |   | Nine Months Ended |   |
|-----------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                          |   | September 30,      |      |   | September 30,     |   |
|                                          |   | 2010               |      |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                          |   |               |      |   |              |   |   |   |   |   |   |   |
| Net earnings available to common stockholders |   | $                  | 1,054,934 |   |              | $      | 211,489 |   |   | $ | 3,294,838 |   |   | $ | (7,528,180 | ) |
|                                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic potential common shares:                |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding           |   |               | 7,915,307 |   |              |   | 8,111,107 |   |   |   | 7,935,723 |   |   |   | 8,363,902 |   |
| Weighted average unallocated Employee Stock   |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Ownership Plan shares                         |   |               | (114,776  | )      |              |   | (123,280 | ) |   |   | (116,886 | ) |   |   | (125,390 | ) |
| Basic weighted average shares outstanding     |   |               | 7,800,531 |   |              |   | 7,987,827 |   |   |   | 7,818,837 |   |   |   | 8,238,512 |   |
|                                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive potential common shares              |   |               | -         |   |              |   | - |   |   |   | - |   |   |   | - |   |
|                                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive weighted average shares outstanding  |   |               | 7,800,531 |   |              |   | 7,987,827 |   |   |   | 7,818,837 |   |   |   | 8,238,512 |   |
|                                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings per share          |   | $                  | 0.14      |   |              | $      | 0.03 |   |   | $ | 0.42 |   |   | $ | (0.91 | ) |

| (7) | Employee Stock Ownership Plan: |
|-----|--------------------------------|

----

Index

| (7) | Employee Stock Ownership Plan (Continued): |
|-----|--------------------------------------------|

|                                                      |   | September 30, |    |   | December 31, |   |
|-----------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                                      |   | 2010               |    |   | 2009              |   |
| Unallocated shares (fair value at September 30, 2010 and  |   |               |    |   |              |   |
| December 31, 2009 of $674,911 and $875,025, respectively) |   |               | 112,673 |   |              |   | 119,051 |   |
| Allocated Shares                                          |   |               | 58,086  |   |              |   | 51,708 |   |
| Total ESOP Shares                                         |   |               | 170,759 |   |              |   | 170,759 |   |

| (8) | Recent Accounting Pronouncements: |
|-----|-----------------------------------|

----

Index

| (9) | Fair Value of Financial Instruments: |
|-----|--------------------------------------|

----

Index

| (9) | Fair Value of Financial Instruments (Continued): |
|-----|--------------------------------------------------|

----

Index

| (9) | Fair Value of Financial Instruments (Continued): |
|-----|--------------------------------------------------|

|                            |   | September 30, 2010 |        |   | December 31, 2009 |   |
|---------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                            |   | Carrying           |        |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                            |   | Amount             |        |   | Value             |   |   | Amount |   |   | Value |   |
| Financial assets:               |   |               |        |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents       |   | $                  | 62,320,349  |   |              | $      | 62,320,349 |   |   | $ | 47,996,754 |   |   | $ | 47,996,754 |   |
| Interest-earning time deposits  |   |               | 1,700,000   |   |              |   | 1,700,000 |   |   |   | - |   |   |   | - |   |
| Securities available for sale   |   |               | 82,747,717  |   |              |   | 82,747,717 |   |   |   | 86,407,138 |   |   |   | 86,407,138 |   |
| Federal Home Loan Bank stock    |   |               | 6,306,273   |   |              |   | 6,306,273 |   |   |   | 6,306,273 |   |   |   | 6,306,273 |   |
| Loans, net                      |   |               | 392,802,838 |   |              |   | 393,007,002 |   |   |   | 411,898,823 |   |   |   | 412,792,748 |   |
| Accrued interest receivable     |   |               | 1,975,546   |   |              |   | 1,975,546 |   |   |   | 2,183,520 |   |   |   | 2,183,520 |   |
|                            |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:          |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing deposits   |   |               | 30,913,897  |   |              |   | 30,913,897 |   |   |   | 49,533,776 |   |   |   | 49,533,776 |   |
| Interest bearing deposits       |   |               | 407,139,795 |   |              |   | 409,130,743 |   |   |   | 393,020,692 |   |   |   | 395,518,484 |   |
| Federal Home Loan Bank advances |   |               | 26,920,000  |   |              |   | 27,468,704 |   |   |   | 39,924,000 |   |   |   | 40,471,672 |   |
| Securities sold under agreement |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| to repurchase                   |   |               | 27,633,279  |   |              |   | 27,633,279 |   |   |   | 18,936,168 |   |   |   | 18,936,168 |   |
| Subordinated debentures         |   |               | 3,963,256   |   |              |   | 3,963,256 |   |   |   | 3,930,208 |   |   |   | 3,992,868 |   |
| Accrued interest payable        |   |               | 670,601     |   |              |   | 670,601 |   |   |   | 1,211,552 |   |   |   | 1,211,552 |   |

| (10) | Fair Value Measurements: |
|------|--------------------------|

----

Index

| (10) | Fair Value Measurements (Continued): |
|------|--------------------------------------|

|                                          |   | September 30, 2010                                   |   |
|-----------------------------------------------|--------|------------------------------------------------------|--------|
|                                          |   | Quoted Prices in Active Markets for Identical Assets |   |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |   |   |   |
| Assets:                                       |   | (Level 1)                                            |   |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
|                                          |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| Investment Securities:                        |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| U.S. government agency obligations            |   | $                                                    | -      |   |   | $ | 48,896,716 |   |   | $ | - |   |   | $ | 48,896,716 |   |
| Corporate bonds                               |   |                                                 | -      |   |   |   | 2,088,969 |   |   |   | - |   |   |   | 2,088,969 |   |
| State and municipal securities                |   |                                                 | -      |   |   |   | 17,879,611 |   |   |   | - |   |   |   | 17,879,611 |   |
| Other securities                              |   |                                                 | -      |   |   |   | 3,501 |   |   |   | - |   |   |   | 3,501 |   |
| Mortgage-backed securities                    |   |                                                 | -      |   |   |   | 13,878,920 |   |   |   | - |   |   |   | 13,878,920 |   |
| Total Investment Securites available for sale |   | $                                                    | -      |   |   | $ | 82,747,717 |   |   | $ | - |   |   | $ | 82,747,717 |   |

|                                          |   | December 31, 2009                                    |   |
|-----------------------------------------------|--------|------------------------------------------------------|--------|
|                                          |   | Quoted Prices in Active Markets for Identical Assets |   |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |   |   |   |
| Assets:                                       |   | (Level 1)                                            |   |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
|                                          |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| Investment Securities:                        |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| U.S. government agency obligations            |   | $                                                    | -      |   |   | $ | 48,514,519 |   |   | $ | - |   |   | $ | 48,514,519 |   |
| Corporate bonds                               |   |                                                 | -      |   |   |   | 2,545,918 |   |   |   | - |   |   |   | 2,545,918 |   |
| State and municipal securities                |   |                                                 | -      |   |   |   | 15,378,916 |   |   |   | - |   |   |   | 15,378,916 |   |
| Other securities                              |   |                                                 | -      |   |   |   | 3,501 |   |   |   | - |   |   |   | 3,501 |   |
| Mortgage-backed securities                    |   |                                                 | -      |   |   |   | 19,964,284 |   |   |   | - |   |   |   | 19,964,284 |   |
| Total Investment Securites available for sale |   | $                                                    | -      |   |   | $ | 86,407,138 |   |   | $ | - |   |   | $ | 86,407,138 |   |

----

Index

| (10) | Fair Value Measurements (Continued): |
|------|--------------------------------------|

|              |   | September 30, 2010                                   |   |
|-------------------|--------|------------------------------------------------------|--------|
|              |   | Quoted Prices in Active Markets for Identical Assets |   |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |   |   |   |
|              |   | (Level 1)                                            |   |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
|              |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| Impaired loans    |   | $                                                    | -      |   |   | $ | - |   |   | $ | 22,191,606 |   |   |   | 22,191,606 |   |
| Foreclosed assets |   |                                                 | -      |   |   |   | 1,732,742 |   |   |   | - |   |   |   | 1,732,742 |   |
| Goodwill          |   |                                                 | -      |   |   |   | 11,385,323 |   |   |   | - |   |   |   | 11,385,323 |   |

|              |   | December 31, 2009                                    |   |
|-------------------|--------|------------------------------------------------------|--------|
|              |   | Quoted Prices in Active Markets for Identical Assets |   |   | Significant Other Observable Inputs |   |   | Significant Unobservable Inputs |   |   |   |   |
|              |   | (Level 1)                                            |   |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
|              |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| Impaired loans    |   | $                                                    | -      |   |   | $ | 23,360,155 |   |   | $ | 238,268 |   |   | $ | 23,598,423 |   |
| Foreclosed assets |   |                                                 | -      |   |   |   | 1,084,548 |   |   |   | - |   |   |   | 1,084,548 |   |
| Goodwill          |   |                                                 | -      |   |   |   | 11,385,323 |   |   |   | - |   |   |   | 11,385,323 |   |

----

Index

| (11) | Goodwill Impairment: |
|------|----------------------|

| (12) | Subsequent Events: |
|------|--------------------|

----

Index

m 

----

Index

----

Index

----

Index

----

Index

----

Index

----

Index

----

Index

|                                                             |   | Three Months Ended September 30, |    |   | Three Months Ended September 30, |   |
|------------------------------------------------------------------|--------|---------------------------------------|---------|--------|---------------------------------------|--------|
|                                                             |   | 2010                                  |    |   | 2009                                  |   |
|                                                             |   | Average Outstanding Balance           |    |   | Interest (4)                          |   |   | Yield/ Rate |   |   | Average Outstanding Balance |   |   | Interest (4) |   |   | Yield/ Rate |   |
|                                                             |   | (Dollars in thousands)                |    |
| Interest-earning assets:                                         |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, gross                                                     |   | $                                     | 402,592 |   |                                  | $      | 5,706 |   |   |   | 5.62 |  % |   | $ | 421,621 |   |   | $ | 5,975 |   |   |   | 5.62 |  % |
| Securities                                                       |   |                                  | 81,826  |   |                                  |   | 674 |   |   |   | 3.26 |   |   |   | 99,183 |   |   |   | 943 |   |   |   | 3.77 |   |
| Interest-earning balances from depository institutions           |   |                                  | 49,926  |   |                                  |   | 33 |   |   |   | 0.26 |   |   |   | 46,290 |   |   |   | 26 |   |   |   | 0.23 |   |
| Total interest-earning assets                                    |   |                                  | 534,344 |   |                                  |   | 6,413 |   |   |   | 4.76 |   |   |   | 567,094 |   |   |   | 6,944 |   |   |   | 4.86 |   |
| Non-interest-earning assets                                      |   |                                  | 43,350  |   |                                  |   |   |   |   |   |   |   |   |   | 45,573 |   |   |   |   |   |   |   |   |   |
| Total assets                                                     |   | $                                     | 577,694 |   |                                  |   |   |   |   |   |   |   |   | $ | 612,667 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                    |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing transaction                                     |   | $                                     | 194,886 |   |                                  |   | 583 |   |   |   | 1.19 |   |   | $ | 167,404 |   |   |   | 719 |   |   |   | 1.70 |   |
| Savings deposits                                                 |   |                                  | 19,508  |   |                                  |   | 37 |   |   |   | 0.75 |   |   |   | 18,815 |   |   |   | 51 |   |   |   | 1.08 |   |
| Time deposits                                                    |   |                                  | 194,883 |   |                                  |   | 1,307 |   |   |   | 2.66 |   |   |   | 218,540 |   |   |   | 1,792 |   |   |   | 3.25 |   |
| Securities sold under agreements to repurchase                   |   |                                  | 24,542  |   |                                  |   | 8 |   |   |   | 0.13 |   |   |   | 48,663 |   |   |   | 17 |   |   |   | 0.14 |   |
| Federal Home Loan Bank advances                                  |   |                                  | 27,197  |   |                                  |   | 247 |   |   |   | 3.60 |   |   |   | 41,305 |   |   |   | 367 |   |   |   | 3.53 |   |
| Subordinated debentures                                          |   |                                  | 3,955   |   |                                  |   | 23 |   |   |   | 2.41 |   |   |   | 3,911 |   |   |   | 75 |   |   |   | 7.61 |   |
| Total interest-bearing liabilities                               |   |                                  | 464,971 |   |                                  |   | 2,205 |   |   |   | 1.88 |   |   |   | 498,638 |   |   |   | 3,021 |   |   |   | 2.40 |   |
| Non-interest-bearing liabilities                                 |   |                                  | 34,251  |   |                                  |   |   |   |   |   |   |   |   |   | 33,678 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                |   |                                  | 499,222 |   |                                  |   |   |   |   |   |   |   |   |   | 532,316 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                       |   |                                  | 78,472  |   |                                  |   |   |   |   |   |   |   |   |   | 80,351 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                 |   | $                                     | 577,694 |   |                                  |   |   |   |   |   |   |   |   | $ | 612,667 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                              |   |                                  |    |   |                                  | $      | 4,208 |   |   |   |   |   |   |   |   |   |   | $ | 3,923 |   |   |   |   |   |
| Net interest rate spread (1)                                     |   |                                  |    |   |                                  |   |   |   |   |   | 2.88 |  % |   |   |   |   |   |   |   |   |   |   | 2.46 |  % |
| Net interest-earning assets (2)                                  |   | $                                     | 69,373  |   |                                  |   |   |   |   |   |   |   |   | $ | 68,456 |   |   |   |   |   |   |   |   |   |
| Net interest margin (3)                                          |   |                                  |    |   |                                  |   |   |   |   |   | 3.12 |  % |   |   |   |   |   |   |   |   |   |   | 2.74 |  % |
| Ratio of interest-earning assets to interest-bearing liabilities |   |                                  |    |   |                                  |   |   |   |   |   | 114.92 |  % |   |   |   |   |   |   |   |   |   |   | 113.73 |  % |

| (1) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.                                                  |
| (3) | Net interest margin represents net interest income divided by average total interest-earning assets.                                                          |
| (4) | Interest on loans includes loan fees collected in the amount of $70,062 and $38,191 for the three months ended September 30, 2010 and 2009, respectively.     |

----

Index

|                                                             |   | Nine Months Ended September 30, |    |   | Nine Months Ended September 30, |   |
|------------------------------------------------------------------|--------|---------------------------------|---------|--------|---------------------------------|--------|
|                                                             |   | 2010                            |    |   | 2009                            |   |
|                                                             |   | Average Outstanding Balance     |    |   | Interest (4)                    |   |   | Yield/ Rate |   |   | Average Outstanding Balance |   |   | Interest (4) |   |   | Yield/ Rate |   |
|                                                             |   | (Dollars in thousands)          |    |
| Interest-earning assets:                                         |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, gross                                                     |   | $                               | 409,027 |   |                            | $      | 17,092 |   |   |   | 5.59 |  % |   | $ | 424,224 |   |   | $ | 18,049 |   |   |   | 5.69 |  % |
| Securities                                                       |   |                            | 87,079  |   |                            |   | 2,183 |   |   |   | 3.35 |   |   |   | 98,853 |   |   |   | 3,032 |   |   |   | 4.10 |   |
| Interest-earning balances from depository institutions           |   |                            | 40,831  |   |                            |   | 75 |   |   |   | 0.25 |   |   |   | 63,928 |   |   |   | 123 |   |   |   | 0.26 |   |
| Total interest-earning assets                                    |   |                            | 536,937 |   |                            |   | 19,350 |   |   |   | 4.82 |   |   |   | 587,005 |   |   |   | 21,204 |   |   |   | 4.83 |   |
| Non-interest-earning assets                                      |   |                            | 44,552  |   |                            |   |   |   |   |   |   |   |   |   | 54,574 |   |   |   |   |   |   |   |   |   |
| Total assets                                                     |   | $                               | 581,489 |   |                            |   |   |   |   |   |   |   |   | $ | 641,579 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                    |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing transaction                                     |   | $                               | 187,276 |   |                            |   | 1,711 |   |   |   | 1.22 |   |   | $ | 187,653 |   |   |   | 2,173 |   |   |   | 1.55 |   |
| Savings deposits                                                 |   |                            | 19,307  |   |                            |   | 116 |   |   |   | 0.80 |   |   |   | 18,678 |   |   |   | 174 |   |   |   | 1.25 |   |
| Time deposits                                                    |   |                            | 197,395 |   |                            |   | 4,080 |   |   |   | 2.76 |   |   |   | 216,267 |   |   |   | 5,516 |   |   |   | 3.41 |   |
| Securities sold under agreements to repurchase                   |   |                            | 25,874  |   |                            |   | 20 |   |   |   | 0.10 |   |   |   | 48,946 |   |   |   | 55 |   |   |   | 0.15 |   |
| Federal Home Loan Bank advances                                  |   |                            | 32,009  |   |                            |   | 852 |   |   |   | 3.56 |   |   |   | 46,464 |   |   |   | 1,292 |   |   |   | 3.72 |   |
| Subordinated debentures                                          |   |                            | 3,945   |   |                            |   | 153 |   |   |   | 5.19 |   |   |   | 3,901 |   |   |   | 223 |   |   |   | 7.64 |   |
| Total interest-bearing liabilities                               |   |                            | 465,806 |   |                            |   | 6,932 |   |   |   | 1.99 |   |   |   | 521,909 |   |   |   | 9,433 |   |   |   | 2.42 |   |
| Non-interest-bearing liabilities                                 |   |                            | 37,801  |   |                            |   |   |   |   |   |   |   |   |   | 31,376 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                |   |                            | 503,607 |   |                            |   |   |   |   |   |   |   |   |   | 553,285 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                       |   |                            | 77,882  |   |                            |   |   |   |   |   |   |   |   |   | 88,294 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                 |   | $                               | 581,489 |   |                            |   |   |   |   |   |   |   |   | $ | 641,579 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                            |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                              |   |                            |    |   |                            | $      | 12,418 |   |   |   |   |   |   |   |   |   |   | $ | 11,771 |   |   |   |   |   |
| Net interest rate spread (1)                                     |   |                            |    |   |                            |   |   |   |   |   | 2.83 |  % |   |   |   |   |   |   |   |   |   |   | 2.41 |  % |
| Net interest-earning assets (2)                                  |   | $                               | 71,131  |   |                            |   |   |   |   |   |   |   |   | $ | 65,096 |   |   |   |   |   |   |   |   |   |
| Net interest margin (3)                                          |   |                            |    |   |                            |   |   |   |   |   | 3.09 |  % |   |   |   |   |   |   |   |   |   |   | 2.68 |  % |
| Ratio of interest-earning assets to interest-bearing liabilities |   |                            |    |   |                            |   |   |   |   |   | 115.27 |  % |   |   |   |   |   |   |   |   |   |   | 112.47 |  % |

| (1) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.                                                  |
| (3) | Net interest margin represents net interest income divided by average total interest-earning assets.                                                          |
| (4) | Interest on loans includes loan fees collected in the amount of $161,154 and $157,552 for the nine months ended September 30, 2010 and 2009, respectively.    |

----

Index

----

Index

----

Index

----

Index

----

Index

|                                        |   |                   |    |   |     |   |   | Minimum Required |   |
|---------------------------------------------|--------|------------------------|---------|--------|----------|--------|--------|------------------|--------|
|                                        |   |                   |    |   |     |   |   | for Capital      |   |   | to be "Well |   |
|                                        |   | Actual                 |    |   | Adequacy |   |   | Capitalized"     |   |
|                                        |   | Amount                 |    |   | Ratio    |   |   | Amount           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                        |   | (Dollars in Thousands) |    |
| Stockholders' equity                        |   | $                      | 72,863  |   |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill and core deposit intangible        |   |                   | (12,582 | )      |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Disallowed servicing assets                 |   |                   | (676    | )      |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gain on securities AFS, net      |   |                   | (1,427  | )      |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Tangible capital to adjusted total assets   |   | $                      | 58,178  |   |     |   | 10.3   | %                |   | $ | 8,446 |   |   |   | 1.5 | % |   |   | N/A |   |   |   | - |   |
| Allowance as limited by regulatory guidance |   |                   | 4,225   |   |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deduction for low-level recourse            |   |                   | (1,607  | )      |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital to risk-weighted assets       |   | $                      | 60,796  |   |     |   | 15.7   | %                |   | $ | 30,949 |   |   |   | 8.0 | % |   | $ | 38,686 |   |   |   | 10.0 | % |
|                                        |   |                   |    |   |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital to risk-weighted assets      |   | $                      | 58,178  |   |     |   | 15.0   | %                |   | $ | N/A |   |   |   | - |   |   | $ | 23,212 |   |   |   | 6.0 | % |
|                                        |   |                   |    |   |     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital to total assets              |   | $                      | 58,178  |   |     |   | 10.3   | %                |   | $ | 22,522 |   |   |   | 4.0 | % |   | $ | 28,152 |   |   |   | 5.0 | % |

----

Index

|                         |                   |        |   |   |        |   |   |        |   |   | Range of    |   |
|------------------------------|------------------------|-------------|--------|--------|-------------|--------|--------|-------------|--------|--------|-------------|--------|
|                         |                   | Variable    |   |   | Fixed       |   |   |        |   |   | Rates on    |   |
|                         |                   | Rate        |   |   | Rate        |   |   | Total       |   |   | Fixed Rate  |   |
|                         |                   | Commitments |   |   | Commitments |   |   | Commitments |   |   | Commitments |   |
|                         | (Dollars in thousands) |        |   |   |        |
| Commitments to extend credit |                   | $           | 36,117 |   |        | $      | 15,742 |        |   | $      | 51,859      |   |   |   | 3.75%-18.00 | % |
| Standby letters of credit    |                   | $           | 1,633  |   |        | $      | 3,246  |        |   | $      | 4,879       |   |   |   | 3.25%-9.25 | % |

----

Index

Ite

----

Index

| June 30, 2010            |   |
|--------------------------|--------|
|                     |   | NPV |   |   | Net Portfolio Value as a Percentage of Present Value of Assets |   |
|                     |   | Estimated NPV |   | Estimated Increase (Decrease) in NPV |   |   | NPV Ratio |   |   |   |   |
| Change in Interest Rates |   | Amount |   |   | Percent |   |   | Change |   |
|                     |   | (Dollars in thousands) |   |   |   |   |   |   |   |   |   |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     | +300   | bp |   | $ | 69,213 |   |   | $ | (12,047 | ) |   |   | (15 | ) % |   |   | 12.42 | % |   |   | (171 | ) bp |
|                     | +200   | bp |   |   | 74,161 |   |   |   | (7,098 | ) |   |   | (9 | ) |   |   | 13.15 |   |   |   | (98 | ) bp |
|                     | +100   | bp |   |   | 78,411 |   |   |   | (2,849 | ) |   |   | (4 | ) |   |   | 13.75 |   |   |   | (38 | ) bp |
|                     | +50    | bp |   |   | 79,627 |   |   |   | (1,633 | ) |   |   | (2 | ) |   |   | 13.91 |   |   |   | (22 | ) bp |
|                     | 0      | bp |   |   | 81,260 |   |   |   | — |   |   |   | — |   |   |   | 14.13 |   |   |   | 0 | bp |
|                     | -50    | bp |   |   | 81,398 |   |   |   | 138 |   |   |   | 0 |   |   |   | 14.12 |   |   |   | 0 | bp |
|                     | -100   | bp |   |   | 80,892 |   |   |   | (368 | ) |   |   | 0 |   |   |   | 14.04 |   |   |   | (9 | ) bp |

| December 31, 2009        |   |
|--------------------------|--------|
|                     |   | NPV |   |   | Net Portfolio Value as a Percentage of Present Value of Assets |   |
|                     |   | Estimated NPV |   | Estimated Increase (Decrease) in NPV |   |   | NPV Ratio |   |   |   |   |
| Change in Interest Rates |   | Amount |   |   | Percent |   |   | Change |   |
|                     |   | (Dollars in thousands) |   |   |   |   |   |   |   |   |   |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     | +300   | bp |   | $ | 61,633 |   |   | $ | (14,434 | ) |   |   | (19 | ) % |   |   | 9.05 | % |   |   | (202 | ) bp |
|                     | +200   | bp |   |   | 67,256 |   |   |   | (8,811 | ) |   |   | (12 | ) |   |   | 11.51 |   |   |   | (121 | ) bp |
|                     | +100   | bp |   |   | 73,007 |   |   |   | (3,060 | ) |   |   | (4 | ) |   |   | 12.32 |   |   |   | (40 | ) bp |
|                     | +50    | bp |   |   | 73,964 |   |   |   | (2,102 | ) |   |   | (3 | ) |   |   | 12.44 |   |   |   | (28 | ) bp |
|                     | 0      | bp |   |   | 76,067 |   |   |   | — |   |   |   | — |   |   |   | 12.72 |   |   |   | 0 | bp |
|                     | -50    | bp |   |   | 76,961 |   |   |   | 895 |   |   |   | 1 |   |   |   | 12.82 |   |   |   | 10 | bp |
|                     | -100   | bp |   |   | 77,806 |   |   |   | 1,739 |   |   |   | 2 |   |   |   | 12.92 |   |   |   | 20 | bp |

----

Index

----

Index

e

----

Index

em

em

e

| (a) | No equity securities were sold during the quarter that were not registered under the Securities Exchange Act. |
|-----|---------------------------------------------------------------------------------------------------------------|

| (b) | Not applicable. |
|-----|-----------------|

| (c) | The following table presents for the periods indicated a summary of the purchases made by or on behalf of the Company of shares of its common stock. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   |                             |   |   |                         |   |   |                                                                             |   |   |                                                                              |   |
|------------------------|--------|----------------------------------|--------|--------|------------------------------|--------|--------|----------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|
| Period                 |   | Total Number of Shares Purchased |   |   | Average Price Paid per 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(1) |   |
|                   |   |                             |   |   |                         |   |   |                                                                             |   |   |                                                                              |   |
| July 1 - 31, 2010      |   |                             | 23,857 |   |                         | $      | 6.03   |                                                                             |   |   | 23,857                                                                            |   |   |   | 1,143 |   |
| August 1 - 31, 2010    |   |                             | 1,143  |   |                         | $      | 5.68   |                                                                             |   |   | 1,143                                                                             |   |   |   | 25,000 |   |
| September 1 - 30, 2010 |   |                             | 1,500  |   |                         | $      | 5.67   |                                                                             |   |   | 1,500                                                                             |   |   |   | 23,500 |   |
| Total                  |   |                             | 26,500 |   |                         |   |   |                                                                             |   |   | 26,500                                                                            |   |   |   |   |   |

|   | (1) | The Company’s board of directors approved a stock repurchase program on November 12, 2008 for the repurchase of up to 924,480 shares of common stock, on December 11, 2008, they increased the number of shares that may be repurchased pursuant to that plan by an additional 382,641 shares, and on April 27, 2010 they authorized another increase to that plan of an additional 25,000 shares.  The plan has no expiration date. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

Ite

em

em

tem 

| (a) |   | Exhibits. |
|-----|--------|-----------|

|   | 31.1: | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--------|-------|-----------------------------------------------------------------------------------------------------|

|   | 31.2: | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--------|-------|-----------------------------------------------------------------------------------------------------|

|   | 32: | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|--------|-----|--------------------------------------------------------------------------|

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Index

IG

| DATE:   November 15, 2010 | BY:  /s/ Dennis M. Terry                                                                                |
|------------------------------------------|-------------------------------------------------------------------------------------------------------------------|
|                                     |         Dennis M. Terry, President and Chief Executive Officer                 |
|                                     |                                                                                                              |
|                                     |                                                                                                              |
|                                     | BY:  /s/ Darlene F. McDonald                                                                            |
|                                     |         Darlene F. McDonald, Senior Vice-President and Chief Financial Officer |

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