----

----

----

|   | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---|-----------------------------------------------------------------------------------------|

|   |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------|------------------------------------------------------------------------------------------|

| Delaware                        |         | 26-0734029          |
|---------------------------------|--------------|---------------------|
| (State or Other Jurisdiction of |         | (I.R.S. Employer    |
| Incorporation or Organization)  |    | Identification No.) |

| Class                         |         | Outstanding as of April 29, 2011 |
|-------------------------------|--------------|----------------------------------|
| Common stock, $.001 par value |    | 5,527,482                        |

----

----

----

| PART I. FINANCIAL INFORMATION                 |     |                                                                                        |
|-----------------------------------------------|----------|---------------------------------------------------------------------------------------------|
|                                          | Item 1.  | Consolidated Financial Statements                                                           |   | 3 |
|                                          | Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 23 |
|                                          | Item 3.  | Quantitative and Qualitative Disclosure about Market Risk                                   |   | 40 |
|                                          | Item 4.  | Controls and Procedures                                                                     |   | 40 |
|                                          |     |                                                                                        |   |   |
| PART II. OTHER INFORMATION                    |     |                                                                                        |
|                                          | Item 1   | Legal Proceedings                                                                           |   | 41 |
|                                          | Item 1A. | Risk Factors                                                                                |   | 41 |
|                                          | Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                 |   | 41 |
|                                          | Item 3.  | Defaults Upon Senior Securities                                                             |   | 41 |
|                                          | Item 5.  | Other Information                                                                           |   | 41 |
|                                          | Item 6.  | Exhibits                                                                                    |   | 42 |
|                                          |     |                                                                                        |   |   |
| EX-31.01 SECTION 302 CERTIFICATION OF THE CEO |     |                                                                                        |
| EX-31.02 SECTION 302 CERTIFICATION OF THE CFO |     |                                                                                        |
| EX-31.01 SECTION 906 CERTIFICATION OF THE CEO |     |                                                                                        |
| EX-31.01 SECTION 906 CERTIFICATION OF THE CFO |     |                                                                                        |

----

|                                                                     |   | March 31, 2011 |      |   | December 31,2010 |   |
|--------------------------------------------------------------------------|--------|----------------|-----------|--------|------------------|--------|
|                                                                     |   | (Unaudited)    |      |   | (Audited)        |   |
| ASSETS                                                                   |   |           |      |   |             |   |
| Cash and due from banks                                                  |   | $              | 20,871    |   |             | $      | 27,454 |   |
| Interest-bearing balances due from depository institutions               |   |           | 16,309    |   |             |   | 204,178 |   |
| Federal funds sold and other investments                                 |   |           | 80,774    |   |             |   | 346 |   |
| Cash and cash equivalents                                                |   |           | 117,954   |   |             |   | 231,978 |   |
| Debt securities:                                                         |   |           |      |   |             |   |   |   |
| Available for sale                                                       |   |           | 237,602   |   |             |   | 276,959 |   |
| Held to maturity                                                         |   |           | 13,939    |   |             |   | 5,234 |   |
| Restricted equity securities                                             |   |           | 4,053     |   |             |   | 3,510 |   |
| Mortgage loans held for sale                                             |   |           | 2,588     |   |             |   | 7,875 |   |
| Loans                                                                    |   |           | 1,470,472 |   |             |   | 1,394,818 |   |
| Less allowance for loan losses                                           |   |           | (19,226   | )      |             |   | (18,077 | ) |
| Loans, net                                                               |   |           | 1,451,246 |   |             |   | 1,376,741 |   |
| Premises and equipment, net                                              |   |           | 4,673     |   |             |   | 4,450 |   |
| Accrued interest and dividends receivable                                |   |           | 7,358     |   |             |   | 6,990 |   |
| Deferred tax assets                                                      |   |           | 7,306     |   |             |   | 6,366 |   |
| Other real estate owned                                                  |   |           | 7,223     |   |             |   | 6,966 |   |
| Other assets                                                             |   |           | 9,007     |   |             |   | 8,097 |   |
| Total assets                                                             |   | $              | 1,862,949 |   |             | $      | 1,935,166 |   |
|                                                                     |   |           |      |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                     |   |           |      |   |             |   |   |   |
| Liabilities:                                                             |   |           |      |   |             |   |   |   |
| Deposits:                                                                |   |           |      |   |             |   |   |   |
| Noninterest-bearing                                                      |   | $              | 261,634   |   |             | $      | 250,490 |   |
| Interest-bearing                                                         |   |           | 1,430,866 |   |             |   | 1,508,226 |   |
| Total deposits                                                           |   |           | 1,692,500 |   |             |   | 1,758,716 |   |
| Other borrowings                                                         |   |           | 14,941    |   |             |   | 24,937 |   |
| Trust preferred securities                                               |   |           | 30,455    |   |             |   | 30,420 |   |
| Accrued interest payable                                                 |   |           | 864       |   |             |   | 898 |   |
| Other liabilities                                                        |   |           | 1,781     |   |             |   | 3,095 |   |
| Total liabilities                                                        |   |           | 1,740,541 |   |             |   | 1,818,066 |   |
| Stockholders' equity:                                                    |   |           |      |   |             |   |   |   |
| Common stock, par value $.001 per share; 15,000,000 shares authorized;   |   |           |      |   |             |   |   |   |
| 5,527,482 shares issued and outstanding at March 31, 2011                |   |           |      |   |             |   |   |   |
| and December 31, 2010                                                    |   |           | 6         |   |             |   | 6 |   |
| Preferred stock, par value $.001 per share; 1,000,000 shares authorized; |   |           |      |   |             |   |   |   |
| no shares outstanding                                                    |   |           | -         |   |             |   | - |   |
| Additional paid-in capital                                               |   |           | 76,139    |   |             |   | 75,914 |   |
| Retained earnings                                                        |   |           | 43,214    |   |             |   | 38,343 |   |
| Accumulated other comprehensive income                                   |   |           | 3,049     |   |             |   | 2,837 |   |
| Total stockholders' equity                                               |   |           | 122,408   |   |             |   | 117,100 |   |
| Total liabilities and shareholders' equity                               |   | $              | 1,862,949 |   |             | $      | 1,935,166 |   |

----

|                                                |   | Three Months Ended March 31, |   |
|-----------------------------------------------------|--------|------------------------------|--------|
|                                                |   | 2011                         |   |   | 2010 |   |
| Interest income:                                    |   |                         |   |   |   |   |
| Interest and fees on loans                          |   | $                            | 18,621 |   |   | $ | 16,204 |   |
| Taxable securities                                  |   |                         | 1,542  |   |   |   | 1,752 |   |
| Nontaxable securities                               |   |                         | 714    |   |   |   | 524 |   |
| Federal funds sold                                  |   |                         | 36     |   |   |   | 10 |   |
| Other interest and dividends                        |   |                         | 48     |   |   |   | 12 |   |
| Total interest income                               |   |                         | 20,961 |   |   |   | 18,502 |   |
| Interest expense:                                   |   |                         |   |   |   |   |   |   |
| Deposits                                            |   |                         | 3,134  |   |   |   | 2,853 |   |
| Borrowed funds                                      |   |                         | 851    |   |   |   | 743 |   |
| Total interest expense                              |   |                         | 3,985  |   |   |   | 3,596 |   |
| Net interest income                                 |   |                         | 16,976 |   |   |   | 14,906 |   |
| Provision for loan losses                           |   |                         | 2,231  |   |   |   | 2,712 |   |
| Net interest income after provision for loan losses |   |                         | 14,745 |   |   |   | 12,194 |   |
| Noninterest income:                                 |   |                         |   |   |   |   |   |   |
| Service charges on deposit accounts                 |   |                         | 567    |   |   |   | 572 |   |
| Securities gains                                    |   |                         | 143    |   |   |   | 38 |   |
| Other operating income                              |   |                         | 561    |   |   |   | 522 |   |
| Total noninterest income                            |   |                         | 1,271  |   |   |   | 1,132 |   |
| Noninterest expenses:                               |   |                         |   |   |   |   |   |   |
| Salaries and employee benefits                      |   |                         | 4,214  |   |   |   | 3,482 |   |
| Equipment and occupancy expense                     |   |                         | 886    |   |   |   | 780 |   |
| Professional services                               |   |                         | 240    |   |   |   | 200 |   |
| Other operating expenses                            |   |                         | 3,257  |   |   |   | 2,796 |   |
| Total noninterest expenses                          |   |                         | 8,597  |   |   |   | 7,258 |   |
| Income before income taxes                          |   |                         | 7,419  |   |   |   | 6,068 |   |
| Provision for income taxes                          |   |                         | 2,548  |   |   |   | 2,055 |   |
| Net income                                          |   | $                            | 4,871  |   |   | $ | 4,013 |   |
|                                                |   |                         |   |   |   |   |   |   |
| Basic earnings per share                            |   | $                            | 0.88   |   |   | $ | 0.73 |   |
|                                                |   |                         |   |   |   |   |   |   |
| Diluted earnings per share                          |   | $                            | 0.77   |   |   | $ | 0.68 |   |

----

|                                                                                                                                           |   | 2011   |   |   | 2010   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Net income                                                                                                                                     |   | $      | 4,871  |   |   | $      | 4,013 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| Other comprehensive income, net of tax:                                                                                                        |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during period from securities available for sale, net of tax of $164 and $149 for 2011 and 2010, respectively |   |   | 305    |   |   |   | 289 |   |
| Reclassification adjustment for net gains on sale of securities in net income, net of tax of $(50) and $(13) for 2011 and 2010, respectively   |   |   | (93    | )      |   |   | (25 | ) |
| Other comprehensive income, net of tax                                                                                                         |   |   | 212    |   |   |   | 264 |   |
| Comprehensive income                                                                                                                           |   | $      | 5,083  |   |   | $      | 4,277 |   |

----

|                             |   | CommonStock |   |   | AdditionalPaid-in Capital |   |   | RetainedEarnings |   |   | Accumulated OtherComprehensiveIncome |   |   | Total Stockholders'Equity |   |
|----------------------------------|--------|-------------|--------|--------|--------------------------------|--------|--------|------------------|--------|--------|-------------------------------------------|--------|--------|--------------------------------|--------|
| Balance, December 31, 2010       |   |        | 6      |   |                           |   | 75,914 |             |   |   | 38,343                                    |   |   |                           | 2,837  |   |   |   | 117,100 |   |
| Other comprehensive income       |   |        | -      |   |                           |   | -      |             |   |   | -                                         |   |   |                           | 212    |   |   |   | 212 |   |
| Stock based compensation expense |   |        | -      |   |                           |   | 225    |             |   |   | -                                         |   |   |                           | -      |   |   |   | 225 |   |
| Net income                       |   |        | -      |   |                           |   | -      |             |   |   | 4,871                                     |   |   |                           | -      |   |   |   | 4,871 |   |
| Balance, March 31, 2011          |   | $           | 6      |   |                           | $      | 76,139 |             |   | $      | 43,214                                    |   |   | $                              | 3,049  |   |   | $ | 122,408 |   |

----

|                                                                              |   | 2011   |     |   | 2010   |   |
|-----------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| OPERATING ACTIVITIES                                                              |   |   |     |   |   |   |
| Net income                                                                        |   | $      | 4,871    |   |   | $      | 4,013 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |     |   |   |   |   |   |
| Deferred tax (benefit) expense                                                    |   |   | (1,053   | )      |   |   | 379 |   |
| Provision for loan losses                                                         |   |   | 2,231    |   |   |   | 2,712 |   |
| Depreciation and amortization                                                     |   |   | 266      |   |   |   | 270 |   |
| Net amortization (accretion) of investments                                       |   |   | 128      |   |   |   | 150 |   |
| Market value adjustment of interest rate cap                                      |   |   | 61       |   |   |   | - |   |
| Increase in accrued interest and dividends receivable                             |   |   | (368     | )      |   |   | (463 | ) |
| Stock compensation expense                                                        |   |   | 225      |   |   |   | 135 |   |
| Decrease in accrued interest payable                                              |   |   | (34      | )      |   |   | (89 | ) |
| Proceeds from sale of mortgage loans held for sale                                |   |   | 35,845   |   |   |   | 29,235 |   |
| Originations of mortgage loans held for sale                                      |   |   | (30,975  | )      |   |   | (27,934 | ) |
| Gain on sale of securities available for sale                                     |   |   | (143     | )      |   |   | (38 | ) |
| Net (gain) loss on sale of other real estate owned                                |   |   | (32      | )      |   |   | 52 |   |
| Write down of other real estate owned                                             |   |   | 85       |   |   |   | 49 |   |
| Decrease in special prepaid FDIC insurance assessments                            |   |   | 611      |   |   |   | 564 |   |
| Net change in other assets, liabilities, and other operating activities           |   |   | (1,436   | )      |   |   | (2,037 | ) |
| Net cash provided by operating activities                                         |   |   | 10,282   |   |   |   | 6,998 |   |
| INVESTMENT ACTIVITIES                                                             |   |   |     |   |   |   |   |   |
| Purchase of securities available for sale                                         |   |   | (17,011  | )      |   |   | (17,274 | ) |
| Proceeds from maturities, calls and paydowns of securities available for sale     |   |   | 7,758    |   |   |   | 10,041 |   |
| Purchase of securities held to maturity                                           |   |   | (8,709   | )      |   |   | (500 | ) |
| Proceeds from maturities, calls and paydowns of securities held to maturity       |   |   | 4        |   |   |   | - |   |
| Increase in loans                                                                 |   |   | (79,640  | )      |   |   | (31,955 | ) |
| Purchase of premises and equipment                                                |   |   | (489     | )      |   |   | (74 | ) |
| Purchase of restricted equity securities                                          |   |   | (543     | )      |   |   | (269 | ) |
| Purchase of interest rate cap                                                     |   |   | -        |   |   |   | - |   |
| Proceeds from sale of securities available for sale                               |   |   | 48,950   |   |   |   | 29,999 |   |
| Proceeds from sale of interest rate floor                                         |   |   | -        |   |   |   | - |   |
| Proceeds from tenant reimbursement                                                |   |   | -        |   |   |   | - |   |
| Proceeds from sale of other real estate owned and repossessions                   |   |   | 1,590    |   |   |   | 2,172 |   |
| Additions to other real estate owned                                              |   |   | -        |   |   |   | (77 | ) |
| Net cash used in investing activities                                             |   |   | (48,090  | )      |   |   | (7,937 | ) |
| FINANCING ACTIVITIES                                                              |   |   |     |   |   |   |   |   |
| Net increase (decrease) in noninterest-bearing deposits                           |   |   | 11,144   |   |   |   | (37,239 | ) |
| Net decrease in interest-bearing deposits                                         |   |   | (77,360  | )      |   |   | (44,556 | ) |
| Net increase in federal funds purchased                                           |   |   | -        |   |   |   | 17,350 |   |
| Proceeds from issuance of trust preferred securities                              |   |   | -        |   |   |   | 15,050 |   |
| Repayment of other borrowings                                                     |   |   | (10,000  | )      |   |   | - |   |
| Net cash used in financing activities                                             |   |   | (76,216  | )      |   |   | (49,395 | ) |
|                                                                              |   |   |     |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                         |   |   | (114,024 | )      |   |   | (50,334 | ) |
|                                                                              |   |   |     |   |   |   |   |   |
| Cash and cash equivalents at beginning of year                                    |   |   | 231,978  |   |   |   | 76,206 |   |
| Cash and cash equivalents at end of year                                          |   | $      | 117,954  |   |   | $      | 25,872 |   |
|                                                                              |   |   |     |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE                                                           |   |   |     |   |   |   |   |   |
| Cash paid for:                                                                    |   |   |     |   |   |   |   |   |
| Interest                                                                          |   | $      | 4,019    |   |   | $      | 3,685 |   |
| Income taxes                                                                      |   |   | 3,600    |   |   |   | 1,560 |   |
|                                                                              |   |   |     |   |   |   |   |   |
| NONCASH TRANSACTIONS                                                              |   |   |     |   |   |   |   |   |
| Transfers of loans from held for sale to held for investment                      |   | $      | 417      |   |   | $      | 380 |   |
| Other real estate acquired in settlement of loans                                 |   |   | 1,900    |   |   |   | 2,068 |   |
| Internally financed sales of other real estate owned                              |   |   | -        |   |   |   | 105 |   |

----

----

|                                                                               |   | Three Months Ended March31,                     |      |
|------------------------------------------------------------------------------------|--------|-------------------------------------------------|-----------|
|                                                                               |   | 2011                                            |      |   | 2010 |   |
|                                                                               |   | (In Thousands, Except Sharesand Per Share Data) |      |
| Earnings Per Share                                                                 |   |                                            |      |   |   |   |
| Weighted average common shares outstanding                                         |   |                                            | 5,527,482 |   |   |   | 5,513,482 |   |
| Net income                                                                         |   | $                                               | 4,871     |   |   | $ | 4,013 |   |
| Basic earnings per share                                                           |   | $                                               | 0.88      |   |   | $ | 0.73 |   |
|                                                                               |   |                                            |      |   |   |   |   |   |
| Weighted average common shares outstanding                                         |   |                                            | 5,527,482 |   |   |   | 5,513,482 |   |
| Dilutive effects of assumed conversions and exercise of stock options and warrants |   |                                            | 986,621   |   |   |   | 388,296 |   |
| Weighted average common and dilutive potential common shares outstanding           |   |                                            | 6,514,103 |   |   |   | 5,901,778 |   |
| Net income, adjusted for effect of debt conversion                                 |   | $                                               | 5,017     |   |   | $ | 4,041 |   |
| Diluted earnings per share                                                         |   | $                                               | 0.77      |   |   | $ | 0.68 |   |

|                                            |   | Amortized Cost |    |   | Gross UnrealizedGain |   |   | Gross UnrealizedLoss |   |   | Market Value |   |
|-------------------------------------------------|--------|---------------------|---------|--------|---------------------------|--------|--------|---------------------------|--------|--------|-------------------|--------|
|                                            |   | (In Thousands)      |    |
| March 31, 2011:                                 |   |                |    |
| Securities Available for Sale                   |   |                |    |   |                      |   |   |                      |   |   |              |   |
| U.S. Treasury and government sponsored agencies |   | $                   | 49,218  |   |                      | $      | 1,319  |                      |   | $      | (44               | )      |   | $ | 50,493 |   |
| Mortgage-backed securities                      |   |                | 101,556 |   |                      |   | 2,739  |                      |   |   | (170              | )      |   | $ | 104,125 |   |
| State and municipal securities                  |   |                | 81,118  |   |                      |   | 1,510  |                      |   |   | (755              | )      |   |   | 81,873 |   |
| Corporate debt                                  |   |                | 1,023   |   |                      |   | 88     |                      |   |   | -                 |   |   |   | 1,111 |   |
| Total                                           |   | $                   | 232,915 |   |                      | $      | 5,656  |                      |   | $      | (969              | )      |   | $ | 237,602 |   |
| Securities Held to Maturity                     |   |                |    |   |                      |   |   |                      |   |   |              |   |   |   |   |   |
| Mortgage-backed securities                      |   | $                   | 8,411   |   |                      | $      | -      |                      |   | $      | (81               | )      |   | $ | 8,330 |   |
| State and municipal securities                  |   |                | 5,528   |   |                      |   | 58     |                      |   |   | (92               | )      |   |   | 5,494 |   |
| Total                                           |   | $                   | 13,939  |   |                      | $      | 58     |                      |   | $      | (173              | )      |   | $ | 13,824 |   |
|                                            |   |                |    |   |                      |   |   |                      |   |   |              |   |   |   |   |   |
| December 31, 2010:                              |   |                |    |   |                      |   |   |                      |   |   |              |   |   |   |   |   |
| Securities Available for Sale                   |   |                |    |   |                      |   |   |                      |   |   |              |   |   |   |   |   |
| U.S. Treasury and government sponsored agencies |   | $                   | 90,631  |   |                      | $      | 1,887  |                      |   | $      | (224              | )      |   | $ | 92,294 |   |
| Mortgage-backed securities                      |   |                | 101,709 |   |                      |   | 2,783  |                      |   |   | (268              | )      |   |   | 104,224 |   |
| State and municipal securities                  |   |                | 78,241  |   |                      |   | 1,076  |                      |   |   | (1,051            | )      |   |   | 78,266 |   |
| Corporate debt                                  |   |                | 2,013   |   |                      |   | 162    |                      |   |   | -                 |   |   |   | 2,175 |   |
| Total                                           |   | $                   | 272,594 |   |                      | $      | 5,908  |                      |   | $      | (1,543            | )      |   | $ | 276,959 |   |
| Securities Held to Maturity                     |   |                |    |   |                      |   |   |                      |   |   |              |   |   |   |   |   |
| State and municipal securities                  |   | $                   | 5,234   |   |                      | $      | -      |                      |   | $      | (271              | )      |   | $ | 4,963 |   |
| Total                                           |   | $                   | 5,234   |   |                      | $      | -      |                      |   | $      | (271              | )      |   | $ | 4,963 |   |

----

|                                            |   | Less Than Twelve Months |   |   | Twelve Months or More |   |
|-------------------------------------------------|--------|----------------------------------------|--------|--------|--------------------------------------|--------|
|                                            |   | GrossUnrealizedLosses                  |   |   | Fair Value                      |   |   | GrossUnrealizedLosses |   |   | Fair Value |   |
|                                            |   | (In Thousands)                         |   |
| March 31, 2011:                                 |   |                                   |   |   |                                 |   |   |   |   |   |   |   |
| U.S. Treasury and government sponsored agencies |   | $                                      | (44    | )      |                                 | $      | 946 |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed securities                      |   |                                   | (251   | )      |                                 |   | 17,575 |   |   |   | - |   |   |   | - |   |
| State and municipal securities                  |   |                                   | (542   | )      |                                 |   | 23,522 |   |   |   | (305 | ) |   |   | 3,998 |   |
| Corporate debt                                  |   |                                   | -      |   |                                 |   | - |   |   |   | - |   |   |   | - |   |
|                                            |   | $                                      | (837   | )      |                                 | $      | 42,043 |   |   | $ | (305 | ) |   | $ | 3,998 |   |
|                                            |   |                                   |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:                              |   |                                   |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and government sponsored agencies |   | $                                      | (224   | )      |                                 | $      | 24,217 |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed securities                      |   |                                   | (268   | )      |                                 |   | 16,417 |   |   |   | - |   |   |   | - |   |
| State and municipal securities                  |   |                                   | (1,034 | )      |                                 |   | 33,282 |   |   |   | (288 | ) |   |   | 3,674 |   |
| Corporate debt                                  |   |                                   | -      |   |                                 |   | - |   |   |   | - |   |   |   | - |   |
|                                            |   | $                                      | (1,526 | )      |                                 | $      | 73,916 |   |   | $ | (288 | ) |   | $ | 3,674 |   |

----

|                                   |   | March 31, 2011 |      |   | December 31,2010 |   |
|----------------------------------------|--------|--------------------------|-----------|--------|-----------------------|--------|
|                                   |   |                     |      |   |                  |   |
| Commercial, financial and agricultural |   | $                        | 585,283   |   |                  | $      | 536,620 |   |
| Real estate - construction             |   |                     | 161,145   |   |                  |   | 172,055 |   |
| Real estate - mortgage:                |   |                     |      |   |                  |   |   |   |
| Owner-occupied commercial              |   |                     | 294,889   |   |                  |   | 270,767 |   |
| 1-4 family mortgage                    |   |                     | 206,514   |   |                  |   | 199,236 |   |
| Other mortgage                         |   |                     | 186,254   |   |                  |   | 178,793 |   |
| Subtotal: Real estate - mortgage       |   |                     | 687,657   |   |                  |   | 648,796 |   |
| Consumer                               |   |                     | 36,387    |   |                  |   | 37,347 |   |
| Total Loans                            |   |                     | 1,470,472 |   |                  |   | 1,394,818 |   |
| Less: Allowance for loan losses        |   |                     | (19,226   | )      |                  |   | (18,077 | ) |
| Net Loans                              |   | $                        | 1,451,246 |   |                  | $      | 1,376,741 |   |
|                                   |   |                     |      |   |                  |   |   |   |
| Commercial, financial and agricultural |   |                     | 39.80     | %      |                  |   | 38.47 | % |
| Real estate - construction             |   |                     | 10.96     | %      |                  |   | 12.34 | % |
| Real estate - mortgage:                |   |                     |      |   |                  |   |   |   |
| Owner-occupied commercial              |   |                     | 20.05     | %      |                  |   | 19.41 | % |
| 1-4 family mortgage                    |   |                     | 14.04     | %      |                  |   | 14.28 | % |
| Other mortgage                         |   |                     | 12.67     | %      |                  |   | 12.82 | % |
| Subtotal: Real estate - mortgage       |   |                     | 46.76     | %      |                  |   | 46.51 | % |
| Consumer                               |   |                     | 2.48      | %      |                  |   | 2.68 | % |
| Total Loans                            |   |                     | 100.00    | %      |                  |   | 100.00 | % |

|                                   |   | Pass   |      |   | Special Mention |   |   | Substandard |   |   | Doubtful |   |   | Total  |   |
|----------------------------------------|--------|--------|-----------|--------|----------------------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
|                                   |   |   |      |   |                 |   |   |        |   |   |     |   |   |   |   |
| Commercial, financial and agricultural |   | $      | 557,225   |   |                 | $      | 15,790 |        |   | $      | 12,183   |   |   | $      | 85     |   |   | $ | 585,283 |   |
| Real estate - construction             |   |   | 121,480   |   |                 |   | 12,144 |        |   |   | 27,521   |   |   |   | -      |   |   |   | 161,145 |   |
| Real estate - mortgage:                |   |   |      |   |                 |   |   |        |   |   |     |   |   |   |   |   |   |   |   |   |
| Owner occupied commercial              |   |   | 282,081   |   |                 |   | 6,239  |        |   |   | 6,569    |   |   |   | -      |   |   |   | 294,889 |   |
| 1-4 family mortgage                    |   |   | 196,334   |   |                 |   | 5,389  |        |   |   | 4,791    |   |   |   | -      |   |   |   | 206,514 |   |
| other mortgage                         |   |   | 182,619   |   |                 |   | 546    |        |   |   | 3,089    |   |   |   | -      |   |   |   | 186,254 |   |
| Total real estate mortgage             |   |   | 661,034   |   |                 |   | 12,174 |        |   |   | 14,449   |   |   |   | -      |   |   |   | 687,657 |   |
| Consumer                               |   |   | 35,411    |   |                 |   | 1      |        |   |   | 976      |   |   |   | -      |   |   |   | 36,387 |   |
| Total                                  |   | $      | 1,375,149 |   |                 | $      | 40,109 |        |   | $      | 55,129   |   |   | $      | 85     |   |   | $ | 1,470,472 |   |

----

|                                   |   | Performing |      |   | Nonperforming |   |   | Total  |   |
|----------------------------------------|--------|------------|-----------|--------|---------------|--------|--------|--------|--------|
|                                   |   |       |      |   |          |   |   |   |   |
| Commercial, financial and agricultural |   | $          | 584,258   |   |          | $      | 1,025  |   |   | $ | 585,283 |   |
| Real estate - construction             |   | $          | 143,780   |   |          |   | 17,365 |   |   |   | 161,145 |   |
| Real estate - mortgage:                |   |       |      |   |          |   |   |   |   |   |   |   |
| Owner occupied commercial              |   | $          | 294,259   |   |          |   | 630    |   |   |   | 294,889 |   |
| 1-4 family mortgage                    |   | $          | 203,915   |   |          |   | 2,599  |   |   |   | 206,514 |   |
| other mortgage                         |   | $          | 186,254   |   |          |   | -      |   |   |   | 186,254 |   |
| Total real estate mortgage             |   |       | 684,428   |   |          |   | 3,229  |   |   |   | 687,657 |   |
| Consumer                               |   | $          | 36,012    |   |          |   | 375    |   |   |   | 36,387 |   |
| Total                                  |   | $          | 1,448,478 |   |          | $      | 21,994 |   |   | $ | 1,470,472 |   |

|                                   |   | Days Past Due Status (Accruing Loans) |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                   |   |                                  | 30-59  |   |   |   | 60-89  |   |   |   | 90+    |   |   | Total |   |   | Nonaccrual |   |   | Current |   |   | Total Loans |   |
|                                   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial, financial and agricultural |   | $                                     | 550    |   |   | $      | -      |   |   | $      | 14     |   |   | $ | 564 |   |   | $ | 1,011 |   |   | $ | 583,708 |   |   | $ | 585,283 |   |
| Real estate - construction             |   |                                  | 1,207  |   |   |   | -      |   |   |   | -      |   |   |   | 1,207 |   |   |   | 17,365 |   |   | $ | 142,573 |   |   | $ | 161,145 |   |
| Real estate - mortgage:                |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied commercial              |   |                                  | 340    |   |   |   | -      |   |   |   | -      |   |   |   | 340 |   |   |   | 630 |   |   | $ | 293,919 |   |   | $ | 294,889 |   |
| 1-4 family mortgage                    |   |                                  | 311    |   |   |   | 124    |   |   |   | 1,838  |   |   |   | 2,273 |   |   |   | 761 |   |   | $ | 203,480 |   |   | $ | 206,514 |   |
| Other mortgage                         |   |                                  | 4,297  |   |   |   |   |   |   |   |   |   |   |   | 4,297 |   |   |   | - |   |   | $ | 181,957 |   |   | $ | 186,254 |   |
| Total real estate - mortgage           |   |                                  | 4,948  |   |   |   | 124    |   |   |   | 1,838  |   |   |   | 6,910 |   |   |   | 1,391 |   |   |   | 679,356 |   |   |   | 687,657 |   |
| Consumer                               |   |                                  | 69     |   |   |   |   |   |   |   |   |   |   |   | 69 |   |   |   | 375 |   |   |   | 35,943 |   |   | $ | 36,387 |   |
| Total                                  |   | $                                     | 6,774  |   |   | $      | 124    |   |   | $      | 1,852  |   |   | $ | 8,750 |   |   | $ | 20,142 |   |   | $ | 1,441,580 |   |   | $ | 1,470,472 |   |

----

|                     |   | 2011    |   |   | 2010    |   |
|--------------------------|--------|---------|--------|--------|---------|--------|
| Expected volatility      |   |    | 29.00  | %      |    |   | 25.00 | % |
| Expected dividends       |   |    | 0.50   | %      |    |   | 0.50 | % |
| Expected term (in years) |   | 7 years |   |   | 7 years |   |
| Risk-free rate           |   |    | 2.70   | %      |    |   | 2.32 | % |

|                               |   | Shares |      |   | WeightedAverageExercisePrice |   |   | WeightedAverageRemainingContractual Term (years) |   |   | AggregateIntrinsicValue |   |
|------------------------------------|--------|--------|-----------|--------|------------------------------|--------|--------|------------------------------------------------------------|--------|--------|-------------------------|--------|
|                               |   |   |      |   |                         |   |   |                                                       |   |   | (In Thousands)          |   |
| Three Months Ended March 31, 2011: |   |   |      |   |                         |   |   |                                                       |   |   |                    |   |
| Outstanding at January 1, 2011     |   |   | 881,000   |   |                         | $      | 15.65  |                                                       |   |   | 6.9                     |   |   | $ | 8,238 |   |
| Granted                            |   |   | 166,500   |   |                         |   | 26.05  |                                                       |   |   | 9.9                     |   |   |   | - |   |
| Exercised                          |   |   | -         |   |                         |   | -      |                                                       |   |   | -                       |   |   |   | - |   |
| Forfeited                          |   |   | -         |   |                         |   | -      |                                                       |   |   | -                       |   |   |   | - |   |
| Outstanding at March 31, 2011      |   |   | 1,047,500 |   |                         |   | 17.30  |                                                       |   |   | 6.4                     |   |   | $ | 13,301 |   |
|                               |   |   |      |   |                         |   |   |                                                       |   |   |                    |   |   |   |   |   |
| Exercisable at March 31, 2011      |   |   | 299,459   |   |                         | $      | 12.75  |                                                       |   |   | 5.0                     |   |   | $ | 5,165 |   |
|                               |   |   |      |   |                         |   |   |                                                       |   |   |                    |   |   |   |   |   |
| Three Months Ended March 31, 2010: |   |   |      |   |                         |   |   |                                                       |   |   |                    |   |   |   |   |   |
| Outstanding at January 1, 2010     |   |   | 833,500   |   |                         | $      | 15.00  |                                                       |   |   | 6.8                     |   |   | $ | 8,333 |   |
| Granted                            |   |   | 11,000    |   |                         |   | 25.00  |                                                       |   |   | 9.9                     |   |   |   | - |   |
| Exercised                          |   |   | -         |   |                         |   | -      |                                                       |   |   | -                       |   |   |   | - |   |
| Forfeited                          |   |   | (10,000   | )      |                         |   | 15.00  |                                                       |   |   | 6.7                     |   |   |   | - |   |
| Outstanding at March 31, 2010      |   |   | 834,500   |   |                         |   | 15.25  |                                                       |   |   | 6.6                     |   |   | $ | 8,238 |   |
|                               |   |   |      |   |                         |   |   |                                                       |   |   |                    |   |   |   |   |   |
| Exercisable at March 31, 2010      |   |   | 146,196   |   |                         | $      | 12.05  |                                                       |   |   | 5.9                     |   |   | $ | 1,894 |   |

----

----

| Level 1: | Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 2: | Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. |
|----------|-----------------------------------------------------------------------------------------------------------|

| Level 3: | Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                       |   | Fair Value Measurements at March 31, 2011 Using                    |   |
|--------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|
|                                       |   | Quoted Prices in Active Markets for IdenticalAssets (Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservable Inputs (Level 3) |   |   | Total |   |
|                                       |   | (In Thousands)                                                                                        |   |
| Assets Measured on a Recurring Basis:      |   |                                                                                                  |   |
| Available-for-sale securities              |   | $                                                                                                     | -      |   |   | $ | 237,602 |   |   | $ | - |   |   | $ | 237,602 |   |
| Interest rate swap agreements              |   |                                                                                                  | -      |   |   |   | 661 |   |   |   | - |   |   |   | 661 |   |
| Interest rate cap                          |   |                                                                                                  | -      |   |   |   | 54 |   |   |   |   |   |   |   | 54 |   |
| Total assets at fair value                 |   | $                                                                                                     | -      |   |   | $ | 238,317 |   |   | $ | - |   |   | $ | 238,317 |   |
|                                       |   |                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities Measured on a Recurring Basis: |   |                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap agreements              |   | $                                                                                                     | -      |   |   | $ | 661 |   |   | $ | - |   |   | $ | 661 |   |

|                                       |   | Fair Value Measurements at December 31, 2010 Using           |   |
|--------------------------------------------|--------|-------------------------------------------------------------------------------------------------|--------|
|                                       |   | Quoted Prices inActive Markets for IdenticalAssets (Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservable Inputs (Level 3) |   |   | Total |   |
|                                       |   | (In Thousands)                                                                                  |   |
| Assets Measured on a Recurring Basis:      |   |                                                                                            |   |
| Available-for-sale securities              |   | $                                                                                               | -      |   |   | $ | 276,959 |   |   | $ | - |   |   | $ | 276,959 |   |
| Interest rate swap agreements              |   |                                                                                            | -      |   |   |   | 803 |   |   |   |   |   |   |   | 803 |   |
| Interest rate cap                          |   |                                                                                            | -      |   |   |   | 115 |   |   |   | - |   |   |   | 115 |   |
| Total assets at fair value                 |   | $                                                                                               | -      |   |   | $ | 277,762 |   |   | $ | - |   |   | $ | 277,762 |   |
|                                       |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities Measured on a Recurring Basis: |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap agreements              |   | $                                                                                               | -      |   |   | $ | 803 |   |   | $ | - |   |   | $ | 803 |   |

|                                     |   | Fair Value Measurements at March 31, 2011 Using                    |   |
|------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|
|                                     |   | Quoted Prices inActive Markets for Identical Assets (Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservable Inputs (Level 3) |   | Total |   |
|                                     |   | (In Thousands)                                                                                        |   |
| Assets Measured on a Nonrecurring Basis: |   |                                                                                                  |   |
| Impaired loans                           |   | $                                                                                                     | -      |   |   | $ | - |   |   | $ | 26,595 |   |   | $ | 26,595 |   |
| Other real estate owned                  |   |                                                                                                  | -      |   |   |   | - |   |   |   | 7,223 |   |   |   | 7,223 |   |
| Total assets at fair value               |   | $                                                                                                     | -      |   |   | $ | - |   |   | $ | 33,818 |   |   | $ | 33,818 |   |

|                                     |   | Fair Value Measurements at December 31, 2010 Using                 |   |
|------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|
|                                     |   | Quoted Prices inActive Markets for Identical Assets (Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservable Inputs (Level 3) |   | Total |   |
|                                     |   | (In Thousands)                                                                                        |   |
| Assets Measured on a Nonrecurring Basis: |   |                                                                                                  |   |
| Impaired loans                           |   | $                                                                                                     | -      |   |   | $ | - |   |   | $ | 35,183 |   |   | $ | 35,183 |   |
| Other real estate owned                  |   |                                                                                                  | -      |   |   |   | - |   |   |   | 6,966 |   |   |   | 6,966 |   |
| Total assets at fair value               |   | $                                                                                                     | -      |   |   | $ | - |   |   | $ | 42,149 |   |   | $ | 42,149 |   |

----

|                                      |   | March 31, 2011 |      |   | December 31, 2010 |   |
|-------------------------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|                                      |   | Carrying Amount     |      |   | Fair Value             |   |   | Carrying Amount |   |   | Fair Value |   |
|                                      |   | (In Thousands)      |      |
| Financial Assets:                         |   |                     |      |   |                        |   |   |   |   |   |   |   |
| Cash and cash equivalents                 |   | $                        | 117,954   |   |                        | $      | 117,954 |   |   | $ | 231,978 |   |   | $ | 231,978 |   |
| Investment securities available for sale  |   |                     | 237,602   |   |                        |   | 237,602 |   |   |   | 276,959 |   |   |   | 276,959 |   |
| Investment securities held to maturity    |   |                     | 13,939    |   |                        |   | 13,824 |   |   |   | 5,234 |   |   |   | 4,963 |   |
| Restricted equity securities              |   |                     | 4,053     |   |                        |   | 4,053 |   |   |   | 3,510 |   |   |   | 3,510 |   |
| Mortgage loans held for sale              |   |                     | 2,588     |   |                        |   | 2,588 |   |   |   | 7,875 |   |   |   | 7,875 |   |
| Loans, net                                |   |                     | 1,451,246 |   |                        |   | 1,454,627 |   |   |   | 1,376,741 |   |   |   | 1,388,154 |   |
| Accrued interest and dividends receivable |   |                     | 7,358     |   |                        |   | 7,358 |   |   |   | 6,990 |   |   |   | 6,990 |   |
| Derivative                                |   |                     | 715       |   |                        |   | 715 |   |   |   | 918 |   |   |   | 918 |   |
|                                      |   |                     |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities:                    |   |                     |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                  |   | $                        | 1,692,500 |   |                        | $      | 1,695,269 |   |   | $ | 1,758,716 |   |   | $ | 1,761,906 |   |
| Borrowings                                |   |                     | 14,941    |   |                        |   | 15,391 |   |   |   | 24,937 |   |   |   | 25,717 |   |
| Trust preferred securities                |   |                     | 30,455    |   |                        |   | 27,982 |   |   |   | 30,420 |   |   |   | 27,989 |   |
| Accrued interest payable                  |   |                     | 864       |   |                        |   | 864 |   |   |   | 898 |   |   |   | 898 |   |
| Derivative                                |   |                     | 661       |   |                        |   | 661 |   |   |   | 803 |   |   |   | 803 |   |

----

----

----

| NOTE 11 – | JUNIOR SUBORDINATED MANDATORY CONVERTIBLE DEFERRABLE INTEREST DEBENTURES DUE MARCH 15, 2040 |
|-----------------|---------------------------------------------------------------------------------------------|

----

----

| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

----

----

|                                            |   | Less Than One Year |   |   | One Year to Five Years |   |   | Five Years toTen Years |   |   | More Than Ten Years |   |   | Total  |    |
|-------------------------------------------------|--------|-----------------------------------|--------|--------|--------------------------------------------|--------|--------|---------------------------------------|--------|--------|------------------------------------|--------|--------|--------|---------|
|                                            |   | (In Thousands)                    |   |
| U.S. Treasury and government sponsored agencies |   | $                                 | -      |   |                                       | $      | 28,144 |                                  |   | $      | 14,843                             |   |   | $      | 6,231   |   |   | $ | 49,218 |   |
| Mortgage-backed securities                      |   |                              | -      |   |                                       |   | 1,289  |                                  |   |   | 29,818                             |   |   |   | 78,860  |   |   |   | 109,967 |   |
| State and municipal securities                  |   |                              | 165    |   |                                       |   | 11,282 |                                  |   |   | 59,059                             |   |   |   | 16,140  |   |   |   | 86,646 |   |
| Corporate debt                                  |   |                              | -      |   |                                       |   | -      |                                  |   |   | 1,023                              |   |   |   | -       |   |   |   | 1,023 |   |
|                                            |   | $                                 | 165    |   |                                       | $      | 40,715 |                                  |   | $      | 104,743                            |   |   | $      | 101,231 |   |   | $ | 246,854 |   |
|                                            |   |                              |   |   |                                       |   |   |                                  |   |   |                               |   |   |   |    |   |   |   |   |   |
| Taxable-equivalent yield                        |   |                              | 6.96   | %      |                                       |   | 2.90   | %                                     |   |   | 4.68                               | %      |   |   | 4.40    | % |   |   | 4.28 | % |

----

----

|                                         |   | Three Months EndedMarch 31, |   |
|----------------------------------------------|--------|-----------------------------|--------|
|                                         |   | 2011                        |   |   | 2010 |   |
|                                         |   | (In Thousands)              |   |
| Allowance for Loan Losses                    |   |                   |   |
| Balance, beginning of period                 |   | $                           | 18,077 |   |   | $ | 14,911 |   |
| Charge-offs:                                 |   |                        |   |   |   |   |   |   |
| Commercial, financial and agricultural       |   |                        | (549   | ) |   |   | (847 | ) |
| Real estate - construction                   |   |                        | (300   | ) |   |   | (338 | ) |
| Real estate - mortgage:                      |   |                        |   |   |   |   |   |   |
| Owner Occupied                               |   |                        | -      |   |   |   | (178 | ) |
| 1-4 family mortgage                          |   |                        | -      |   |   |   | (633 | ) |
| Other                                        |   |                        | -      |   |   |   | - |   |
| Total real estate mortgage                   |   |                        | -      |   |   |   | (811 | ) |
| Consumer                                     |   |                        | (325   | ) |   |   | (16 | ) |
| Total charge-offs                            |   |                        | (1,174 | ) |   |   | (2,012 | ) |
| Recoveries:                                  |   |                        |   |   |   |   |   |   |
| Commercial, financial and agricultural       |   |                        | -      |   |   |   | 56 |   |
| Real estate - construction                   |   |                        | 90     |   |   |   | - |   |
| Real estate - mortgage:                      |   |                        |   |   |   |   |   |   |
| Owner Occupied                               |   |                        | -      |   |   |   | - |   |
| 1-4 family mortgage                          |   |                        | 1      |   |   |   | 3 |   |
| Other                                        |   |                        | -      |   |   |   | - |   |
| Total real estate mortgage                   |   |                        | 1      |   |   |   | 3 |   |
| Consumer                                     |   |                        | 1      |   |   |   | 1 |   |
| Total recoveries                             |   |                        | 92     |   |   |   | 60 |   |
| Net charge-offs                              |   |                        | (1,082 | ) |   |   | (1,952 | ) |
| Provision for loan losses charged to expense |   |                        | 2,231  |   |   |   | 2,712 |   |
| Balance, end of period                       |   | $                           | 19,226 |   |   | $ | 15,671 |   |
|                                         |   |                        |   |   |   |   |   |   |
| As a percent of year to date average loans:  |   |                        |   |   |   |   |   |   |
| Annualized net charge-offs                   |   |                        | 0.29   | % |   |   | 0.65 | % |
| Annualized provision for loan losses         |   |                        | 0.61   | % |   |   | 0.90 | % |

----

| March 31, 2011                         |   | Amount |   |   | Percentageof loans ineachcategory tototal loans |   |
|----------------------------------------|--------|--------|--------|--------|-----------------------------------------------------------|--------|
|                                   |   |   |   |   |                                                      |   |
| Commercial, financial and agricultural |   | $      | 6,039  |   |                                                      |   | 39.80 | % |
| Real estate - construction             |   |   | 6,285  |   |                                                      |   | 10.96 | % |
| Real estate - mortgage                 |   |   | 1,145  |   |                                                      |   | 46.76 | % |
| Consumer                               |   |   | 238    |   |                                                      |   | 2.48 | % |
| Other                                  |   |   | 5,519  |   |                                                      |   | - |   |
| Total                                  |   | $      | 19,226 |   |                                                      |   | 100.00 | % |
|                                   |   |   |   |   |                                                      |   |   |   |
| December 31, 2010                      |   | Amount |   |   | Percentageof loans ineachcategory tototal loans           |   |
|                                   |   |   |   |   |                                                      |   |   |   |
| Commercial, financial and agricultural |   | $      | 5,214  |   |                                                      |   | 38.47 | % |
| Real estate - construction             |   |   | 6,373  |   |                                                      |   | 12.34 | % |
| Real estate - mortgage                 |   |   | 1,067  |   |                                                      |   | 46.51 | % |
| Consumer                               |   |   | 554    |   |                                                      |   | 2.68 | % |
| Other                                  |   |   | 4,869  |   |                                                      |   | - |   |
| Total                                  |   | $      | 18,077 |   |                                                      |   | 100.00 | % |

----

|                                     |   | March 31, 2011 |   |   | December 31, 2010 |   |
|------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                     |   | Balance        |   |   | Numberof Loans    |   |   | Balance |   |   | Number ofLoans |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |
| Nonaccrual loans:                        |   |           |   |   |              |   |   |   |   |   |   |   |
| Commercial, financial and agricultural   |   | $              | 1,011  |   |              |   | 10 |   |   | $ | 2,164 |   |   |   | 8 |   |
| Real estate - construction               |   |           | 17,365 |   |              |   | 33 |   |   |   | 10,722 |   |   |   | 24 |   |
| Real estate - mortgage:                  |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied commercial                |   |           | 630    |   |              |   | 1 |   |   |   | 635 |   |   |   | 1 |   |
| 1-4 family mortgage                      |   |           | 761    |   |              |   | 4 |   |   |   | 202 |   |   |   | 1 |   |
| Other mortgage                           |   |           |   |   |              |   |   |   |   |   | - |   |   |   | - |   |
| Total real estate - mortgage             |   |           | 1,391  |   |              |   | 5 |   |   |   | 837 |   |   |   | 2 |   |
| Consumer                                 |   |           | 375    |   |              |   | 1 |   |   |   | 624 |   |   |   | 1 |   |
| Total nonaccrual loans:                  |   | $              | 20,142 |   |              |   | 49 |   |   | $ | 14,347 |   |   |   | 35 |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| 90+ days past due and accruing:          |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Commercial, financial and agricultural   |   | $              | 14     |   |              |   | 1 |   |   | $ | - |   |   |   | - |   |
| Real estate - construction               |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Real estate - mortgage:                  |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied commercial                |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| 1-4 family mortgage                      |   |           | 1,838  |   |              |   | 1 |   |   |   | - |   |   |   | - |   |
| Other mortgage                           |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Total real estate - mortgage             |   |           | 1,838  |   |              |   | 1 |   |   |   | - |   |   |   | - |   |
| Consumer                                 |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Total 90+ days past due and accruing:    |   | $              | 1,852  |   |              |   | 2 |   |   | $ | - |   |   |   | - |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total nonperforming loans:               |   | $              | 21,994 |   |              |   | 51 |   |   | $ | 14,347 |   |   |   | 35 |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Plus: Other real estate owned            |   |           | 7,223  |   |              |   | 31 |   |   |   | 6,966 |   |   |   | 39 |   |
| Total nonperforming assets               |   | $              | 29,217 |   |              |   | 82 |   |   | $ | 21,313 |   |   |   | 74 |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Restructured accruing loans (TDRs):      |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Commercial, financial and agricultural   |   | $              | 3,351  |   |              |   | 11 |   |   | $ | 2,398 |   |   |   | 9 |   |
| Real estate - construction               |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Real estate - mortgage:                  |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied commercial                |   |           | 2,369  |   |              |   | 1 |   |   |   | - |   |   |   | - |   |
| 1-4 family mortgage                      |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Other mortgage                           |   |           | 344    |   |              |   | 1 |   |   |   | - |   |   |   | - |   |
| Total real estate - mortgage             |   |           | 2,713  |   |              |   | 2 |   |   |   | - |   |   |   | - |   |
| Consumer                                 |   |           | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Total restructured accruing loans:       |   | $              | 6,064  |   |              |   | 13 |   |   | $ | 2,398 |   |   |   | 9 |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total nonperforming assets and           |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| restructured accruing loans              |   | $              | 35,281 |   |              |   | 95 |   |   | $ | 23,711 |   |   |   | 83 |   |
|                                     |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                  |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming loans to total loans       |   |           | 1.50   | %      |              |   |   |   |   |   | 1.03 | % |   |   |   |   |
| Nonperforming assets to total loans plus |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| other real estate owned                  |   |           | 1.98   | %      |              |   |   |   |   |   | 1.52 | % |   |   |   |   |
| Nonperforming loans plus restructured    |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| accruing loans to total loans plus       |   |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| other real estate owned                  |   |           | 1.90   | %      |              |   |   |   |   |   | 1.19 | % |   |   |   |   |

----

----

|                             |   | RecordedInvestment |   |   | UnpaidPrincipalBalance |   |
|----------------------------------|--------|--------------------|--------|--------|------------------------|--------|
|                             |   |               |   |   |                   |   |
| With no allowance recorded:      |   |               |   |   |                   |   |
| Commercial, financial            |   |               |   |   |                   |   |
| and agricultural                 |   | $                  | 2,088  |   |                   | $      | 2,229 |   |
| Real estate - construction       |   |               | 6,786  |   |                   |   | 6,961 |   |
| Real estate - mortgage:          |   |               |   |   |                   |   |   |   |
| Owner-occupied commercial        |   |               | 2,981  |   |                   |   | 3,056 |   |
| 1-4 family mortgage              |   |               | 511    |   |                   |   | 511 |   |
| Other mortgage                   |   |               | 2,082  |   |                   |   | 2,082 |   |
| Total real estate - mortgage     |   |               | 5,574  |   |                   |   | 5,649 |   |
| Consumer                         |   |               | 275    |   |                   |   | 275 |   |
| Total with no allowance recorded |   |               | 14,723 |   |                   |   | 15,114 |   |
|                             |   |               |   |   |                   |   |   |   |
| With an allowance recorded:      |   |               |   |   |                   |   |   |   |
| Commercial, financial            |   |               |   |   |                   |   |   |   |
| and agricultural                 |   |               | 8,679  |   |                   |   | 8,729 |   |
| Real estate - construction       |   |               | 20,735 |   |                   |   | 20,952 |   |
| Real estate - mortgage:          |   |               |   |   |                   |   |   |   |
| Owner-occupied commercial        |   |               | 3,416  |   |                   |   | 3,416 |   |
| 1-4 family mortgage              |   |               | 2,993  |   |                   |   | 2,993 |   |
| Other mortgage                   |   |               | 344    |   |                   |   | 344 |   |
| Total real estate - mortgage     |   |               | 6,753  |   |                   |   | 6,753 |   |
| Consumer                         |   |               | 374    |   |                   |   | 415 |   |
| Total with allowance recorded    |   |               | 36,541 |   |                   |   | 36,849 |   |
|                             |   |               |   |   |                   |   |   |   |
| Total Impaired Loans:            |   |               |   |   |                   |   |   |   |
| Commercial, financial            |   |               |   |   |                   |   |   |   |
| and agricultural                 |   |               | 10,767 |   |                   |   | 10,958 |   |
| Real estate - construction       |   |               | 27,521 |   |                   |   | 27,913 |   |
| Real estate - mortgage:          |   |               |   |   |                   |   |   |   |
| Owner-occupied commercial        |   |               | 6,397  |   |                   |   | 6,472 |   |
| 1-4 family mortgage              |   |               | 3,504  |   |                   |   | 3,504 |   |
| Other mortgage                   |   |               | 2,426  |   |                   |   | 2,426 |   |
| Total real estate - mortgage     |   |               | 12,327 |   |                   |   | 12,402 |   |
| Consumer                         |   |               | 649    |   |                   |   | 690 |   |
| Total impaired loans             |   | $                  | 51,264 |   |                   | $      | 51,963 |   |

----

----

|                               |   | Payments due by Period |      |
|------------------------------------|--------|------------------------|-----------|
|                               |   | Total                  |      |   | 1 year or less |   |   | Over 1 - 3years |   |   | Over 3 - 5years |   |   | Over 5 years |   |
|                               |   | (In Thousands)         |      |
| Contractual Obligations (1)        |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits without a stated maturity |   | $                      | 1,405,770 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Certificates of deposit (2)        |   |                   | 286,730   |   |   |   | 175,028 |   |   |   | 89,399 |   |   |   | 22,303 |   |   |   | - |   |
| FHLB borrowings                    |   |                   | 10,000    |   |   |   | - |   |   |   | 10,000 |   |   |   | - |   |   |   | - |   |
| Subordinated debentures            |   |                   | 30,455    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 30,455 |   |
| Subordinated note payable          |   |                   | 4,941     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,941 |   |
| Operating lease commitments        |   |                   | 17,905    |   |   |   | 2,006 |   |   |   | 3,978 |   |   |   | 3,917 |   |   |   | 8,004 |   |
| Total                              |   | $                      | 1,755,801 |   |   | $ | 177,034 |   |   | $ | 103,377 |   |   | $ | 26,220 |   |   | $ | 43,400 |   |

----

|                               |   | Actual |    |   | For Capital AdequacyPurposes |   |   | To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions |   |
|-----------------------------------------|--------|--------|---------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                    |   | Amount |    |   | Ratio                        |   |   | Amount                                                         |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of March 31, 2011:                   |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |
| Total Capital to Risk-Weighted Assets:  |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   | $      | 173,057 |   |                         |   | 11.53  | %                                                              |   | $ | 120,036 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 172,926 |   |                         |   | 11.53  | %                                                              |   |   | 119,946 |   |   |   | 8.00 | % |   |   | 149,932 |   |   |   | 10.00 | % |
| Tier 1 Capital to Risk-Weighted Assets: |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   |   | 149,359 |   |                         |   | 9.95   | %                                                              |   |   | 60,018 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 149,228 |   |                         |   | 9.95   | %                                                              |   |   | 59,973 |   |   |   | 4.00 | % |   |   | 89,959 |   |   |   | 6.00 | % |
| Tier 1 Capital to Average Assets:       |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   |   | 149,359 |   |                         |   | 8.02   | %                                                              |   |   | 74,499 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 149,228 |   |                         |   | 8.02   | %                                                              |   |   | 74,470 |   |   |   | 4.00 | % |   |   | 93,087 |   |   |   | 5.00 | % |
|                                    |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2010:                |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital to Risk-Weighted Assets:  |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   | $      | 166,850 |   |                         |   | 11.82  | %                                                              |   | $ | 112,927 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 166,721 |   |                         |   | 11.81  | %                                                              |   |   | 112,978 |   |   |   | 8.00 | % |   |   | 141,222 |   |   |   | 10.00 | % |
| Tier 1 Capital to Risk-Weighted Assets: |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   |   | 144,263 |   |                         |   | 10.22  | %                                                              |   |   | 56,464 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 144,117 |   |                         |   | 10.20  | %                                                              |   |   | 56,489 |   |   |   | 4.00 | % |   |   | 84,733 |   |   |   | 6.00 | % |
| Tier 1 Capital to Average Assets:       |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   |   | 144,263 |   |                         |   | 7.77   | %                                                              |   |   | 74,266 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 144,117 |   |                         |   | 7.77   | %                                                              |   |   | 74,236 |   |   |   | 4.00 | % |   |   | 92,795 |   |   |   | 5.00 | % |
|                                    |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of March 31, 2010:                   |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital to Risk-Weighted Assets:  |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   | $      | 150,793 |   |                         |   | 11.90  | %                                                              |   | $ | 101,297 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 150,333 |   |                         |   | 11.88  | %                                                              |   |   | 101,230 |   |   |   | 8.00 | % |   |   | 126,538 |   |   |   | 10.00 | % |
| Tier 1 Capital to Risk-Weighted Assets: |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   |   | 130,197 |   |                         |   | 10.28  | %                                                              |   |   | 50,649 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 129,737 |   |                         |   | 10.25  | %                                                              |   |   | 50,615 |   |   |   | 4.00 | % |   |   | 75,923 |   |   |   | 6.00 | % |
| Tier 1 Capital to Average Assets:       |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                            |   |   | 130,197 |   |                         |   | 8.51   | %                                                              |   |   | 61,186 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| ServisFirst Bank                        |   |   | 129,737 |   |                         |   | 8.49   | %                                                              |   |   | 61,153 |   |   |   | 4.00 | % |   |   | 76,442 |   |   |   | 5.00 | % |

----

|                         |   | (In Thousands) |    |
|------------------------------|--------|----------------|---------|
| Commitments to extend credit |   | $              | 563,243 |   |
| Credit card arrangements     |   |           | 17,037  |   |
| Standby letters of credit    |   |           | 51,075  |   |
|                         |   | $              | 631,355 |   |

----

----

|                             |   | 2011           |      |   | 2010                 |   |
|---------------------------------------|--------|----------------|-----------|--------|----------------------|--------|
|                                  |   | AverageBalance |      |   | InterestEarned /Paid |   |   | AverageYield / Rate |   |   | AverageBalance |   |   | InterestEarned /Paid |   |   | AverageYield / Rate |   |
| Assets:                               |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:              |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net of unearned income (1)     |   | $              | 1,424,008 |   |                 | $      | 18,583 |   |   |   | 5.29 | % |   | $ | 1,220,293 |   |   | $ | 16,170 |   |   |   | 5.37 | % |
| Mortgage loans held for sale          |   |           | 4,156     |   |                 |   | 37 |   |   |   | 3.61 |   |   |   | 3,322 |   |   |   | 34 |   |   |   | 4.15 |   |
| Investment securities:                |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                               |   |           | 185,522   |   |                 |   | 1,544 |   |   |   | 3.38 |   |   |   | 188,729 |   |   |   | 1,750 |   |   |   | 3.76 |   |
| Tax-exempt (2)                        |   |           | 77,032    |   |                 |   | 1,038 |   |   |   | 5.46 |   |   |   | 53,826 |   |   |   | 754 |   |   |   | 5.68 |   |
| Total investment securities (3)       |   |           | 262,554   |   |                 |   | 2,582 |   |   |   | 3.99 |   |   |   | 242,555 |   |   |   | 2,504 |   |   |   | 4.19 |   |
| Federal funds sold                    |   |           | 72,817    |   |                 |   | 36 |   |   |   | 0.20 |   |   |   | 3,496 |   |   |   | 2 |   |   |   | 0.23 |   |
| Restricted equity securities          |   |           | 4,066     |   |                 |   | 17 |   |   |   | 1.70 |   |   |   | 3,748 |   |   |   | 12 |   |   |   | 1.30 |   |
| Interest-bearing balances with banks  |   |           | 50,494    |   |                 |   | 30 |   |   |   | 0.24 |   |   |   | 8,052 |   |   |   | 10 |   |   |   | 0.50 |   |
| Total interest-earning assets         |   | $              | 1,818,095 |   |                 | $      | 21,285 |   |   |   | 4.75 | % |   | $ | 1,481,466 |   |   | $ | 18,732 |   |   |   | 5.13 | % |
| Non-interest-earning assets:          |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks               |   |           | 25,810    |   |                 |   |   |   |   |   |   |   |   |   | 22,191 |   |   |   |   |   |   |   |   |   |
| Net fixed assets and equipment        |   |           | 4,846     |   |                 |   |   |   |   |   |   |   |   |   | 5,242 |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses, accrued    |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interest and other assets             |   |           | 13,717    |   |                 |   |   |   |   |   |   |   |   |   | 20,740 |   |   |   |   |   |   |   |   |   |
| Total assets                          |   | $              | 1,862,468 |   |                 |   |   |   |   |   |   |   |   | $ | 1,529,639 |   |   |   |   |   |   |   |   |   |
|                                  |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and stockholders' equity: |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:         |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits      |   | $              | 312,350   |   |                 | $      | 326 |   |   |   | 0.42 | % |   | $ | 223,780 |   |   | $ | 308 |   |   |   | 0.56 | % |
| Savings deposits                      |   |           | 6,676     |   |                 |   | 9 |   |   |   | 0.55 |   |   |   | 1,898 |   |   |   | 2 |   |   |   | 0.43 |   |
| Money market accounts                 |   |           | 837,211   |   |                 |   | 1,674 |   |   |   | 0.81 |   |   |   | 706,415 |   |   |   | 1,297 |   |   |   | 0.74 |   |
| Time deposits                         |   |           | 282,222   |   |                 |   | 1,126 |   |   |   | 1.62 |   |   |   | 251,599 |   |   |   | 1,246 |   |   |   | 2.01 |   |
| Fed funds purchased                   |   |           | -         |   |                 |   | - |   |   |   | 0.00 |   |   |   | 18,720 |   |   |   | 29 |   |   |   | 0.63 |   |
| Other borrowings                      |   |           | 54,528    |   |                 |   | 851 |   |   |   | 6.33 |   |   |   | 42,679 |   |   |   | 714 |   |   |   | 6.78 |   |
| Total interest-bearing liabilities    |   | $              | 1,492,987 |   |                 | $      | 3,986 |   |   |   | 1.08 |   |   | $ | 1,245,091 |   |   | $ | 3,596 |   |   |   | 1.17 |   |
| Non-interest-bearing liabilities:     |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing demand           |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| deposits                              |   |           | 245,204   |   |                 |   |   |   |   |   |   |   |   |   | 180,724 |   |   |   |   |   |   |   |   |   |
| Other liabilities                     |   |           | 4,549     |   |                 |   |   |   |   |   |   |   |   |   | 3,589 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                  |   |           | 116,811   |   |                 |   |   |   |   |   |   |   |   |   | 98,123 |   |   |   |   |   |   |   |   |   |
| Unrealized gains on                   |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities and derivatives            |   |           | 2,917     |   |                 |   |   |   |   |   |   |   |   |   | 2,112 |   |   |   |   |   |   |   |   |   |
| Total liabilities and                 |   |           |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders' equity                  |   | $              | 1,862,468 |   |                 |   |   |   |   |   |   |   |   | $ | 1,529,639 |   |   |   |   |   |   |   |   |   |
| Net interest spread                   |   |           |      |   |                 |   |   |   |   |   | 3.67 | % |   |   |   |   |   |   |   |   |   |   | 3.96 | % |
| Net interest margin                   |   |           |      |   |                 |   |   |   |   |   | 3.86 | % |   |   |   |   |   |   |   |   |   |   | 4.14 | % |

| (1) | Non-accrual loans are included in average loan balances in all periods.  Loan fees of $152,000 and $187,000 are included in interest income in 2011 and 2010, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 35%. |
|-----|-------------------------------------------------------------------------------------------------------|

| (3) | Unrealized gains of $4,690,000 and $2,783,000 are excluded from the yield calculation in 2011 and 2010, respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

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|                                 |   | Three Months Ended March 31,                                                              |   |
|--------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|
|                                 |   | 2011 Compared to 2010 Increase (Decrease)in Interest Income and Expense Due toChanges in: |   |
|                                 |   | Volume                                                                                    |   |   | Rate |   |   | Total |   |
| Interest-earning assets:             |   |                                                                                      |   |   |   |   |   |   |   |
| Loans, net of unearned income        |   |                                                                                      | 2,661  |   |   |   | (248 | ) |   |   | 2,413 |   |
| Mortgages held for sale              |   |                                                                                      | 7      |   |   |   | (4 | ) |   |   | 3 |   |
| Investment securities:               |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Securities - taxable                 |   |                                                                                      | (30    | ) |   |   | (176 | ) |   |   | (206 | ) |
| Securities - non taxable             |   |                                                                                      | 314    |   |   |   | (30 | ) |   |   | 284 |   |
| Federal funds sold                   |   |                                                                                      | 34     |   |   |   | - |   |   |   | 34 |   |
| Restricted equity securities         |   |                                                                                      | 1      |   |   |   | 4 |   |   |   | 5 |   |
| Interest-bearing balances with banks |   |                                                                                      | 27     |   |   |   | (7 | ) |   |   | 20 |   |
| Total interest-earning assets        |   |                                                                                      | 3,014  |   |   |   | (461 | ) |   |   | 2,553 |   |
|                                 |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:        |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits     |   |                                                                                      | 103    |   |   |   | (85 | ) |   |   | 18 |   |
| Savings                              |   |                                                                                      | 6      |   |   |   | 1 |   |   |   | 7 |   |
| Money market accounts                |   |                                                                                      | 255    |   |   |   | 122 |   |   |   | 377 |   |
| Time deposits                        |   |                                                                                      | 140    |   |   |   | (260 | ) |   |   | (120 | ) |
| Fed funds purchased                  |   |                                                                                      | (15    | ) |   |   | (14 | ) |   |   | (29 | ) |
| Other borrowed funds                 |   |                                                                                      | 188    |   |   |   | (51 | ) |   |   | 137 |   |
| Total interest-bearing liabilities   |   |                                                                                      | 677    |   |   |   | (287 | ) |   |   | 390 |   |
| Increase in net interest income      |   |                                                                                      | 2,337  |   |   |   | (174 | ) |   |   | 2,163 |   |

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|              | SERVISFIRST BANCSHARES, INC. |
|-------------------|------------------------------|
|              |                         |
| Date: May 3, 2011 | By                           | /s/ Thomas A. Broughton, III |
|              |                         |    Thomas A. Broughton, III |
|              |                         |    President and Chief Executive Officer |
|              |                         |   |
| Date: May 3, 2011 | By                           | /s/ William M. Foshee |
|              |                         |    William M. Foshee |
|              |                         |    Chief Financial Officer |

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