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

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

| VIRGINIA                                                       | 54-1265373                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| Large accelerated filer o                     | Accelerated filer o               |
|-----------------------------------------------|-----------------------------------|
|                                          |                              |
| Non-accelerated filer o                       | Smaller reporting company ■ |
| (Do not check if a smaller reporting company) |                              |

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|     |                                                                                                                                                           | Page   |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                                                                           |   |
| Item 1   | Financial Statements                                                                                                                                           | 1      |
|     |                                                                                                                                                           |   |
|     | Consolidated Balance Sheets June 30, 2014 (unaudited) and December 31, 2013                                                                                    | 1      |
|     |                                                                                                                                                           |   |
|     | Consolidated Statements of IncomeThree months ended June 30, 2014 and 2013 (unaudited)Six months ended June 30, 2014 and 2013 (unaudited)                      | 2      |
|     |                                                                                                                                                           |   |
|     | Consolidated Statements of Comprehensive Income (Loss)Three months ended June 30, 2014 and 2013 (unaudited)Six months ended June 30, 2014 and 2013 (unaudited) | 3      |
|     |                                                                                                                                                           |   |
|     | Consolidated Statements of Changes in Stockholders' EquitySix months ended June 30, 2014 and 2013 (unaudited)                                                  | 4      |
|     |                                                                                                                                                           |   |
|     | Consolidated Statements of Cash FlowsSix months ended June 30, 2014 and 2013 (unaudited)                                                                       | 5      |
|     |                                                                                                                                                           |   |
|     | Notes to Consolidated Financial Statements (unaudited)                                                                                                         | 6      |
|     |                                                                                                                                                           |   |
| Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                          | 34     |
|     |                                                                                                                                                           |   |
| Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                     | 46     |
|     |                                                                                                                                                           |   |
| Item 4.  | Controls and Procedures                                                                                                                                        | 46     |
|     |                                                                                                                                                           |   |
|     | PART II - OTHER INFORMATION                                                                                                                                    |   |
|     |                                                                                                                                                           |   |
| Item 1.  | Legal Proceedings                                                                                                                                              | 47     |
|     |                                                                                                                                                           |   |
| Item 1A. | Risk Factors                                                                                                                                                   | 47     |
|     |                                                                                                                                                           |   |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                    | 47     |
|     |                                                                                                                                                           |   |
| Item 3.  | Defaults Upon Senior Securities                                                                                                                                | 47     |
|     |                                                                                                                                                           |   |
| Item 4.  | Mine Safety Disclosures                                                                                                                                        | 47     |
|     |                                                                                                                                                           |   |
| Item 5.  | Other Information                                                                                                                                              | 47     |
|     |                                                                                                                                                           |   |
| Item 6.  | Exhibits                                                                                                                                                       | 48     |
|     |                                                                                                                                                           |   |
|     | Signatures                                                                                                                                                     | 48     |

----

|                                                                                                   |   | June 30, 2014                                |    |   | December 31, 2013 |   |
|--------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|-------------------|--------|
|                                                                                                   |   | (dollars in thousands except per share data) |    |
|                                                                                                   |   | (unaudited)                                  |    |   |                   |   |
| Assets                                                                                                 |   |                                              |    |   |                   |   |
|                                                                                                   |   |                                              |    |   |                   |   |
| Cash and due from banks                                                                                |   | $                                            | 20,383  |   |              | $      | 11,802 |   |
| Interest-bearing due from banks                                                                        |   |                                         | 507     |   |              |   | 18,045 |   |
| Federal funds sold                                                                                     |   |                                         | 1,643   |   |              |   | 1,478 |   |
| Cash and cash equivalents                                                                              |   |                                         | 22,533  |   |              |   | 31,325 |   |
| Securities available-for-sale, at fair value                                                           |   |                                         | 144,040 |   |              |   | 155,639 |   |
| Securities held-to-maturity (fair value approximates $97,091 and $97,453)                              |   |                                         | 93,990  |   |              |   | 96,847 |   |
| Restricted securities                                                                                  |   |                                         | 2,293   |   |              |   | 2,378 |   |
| Loans, net of allowance for loan losses of $6,976 and $6,831                                           |   |                                         | 512,686 |   |              |   | 493,868 |   |
| Premises and equipment, net                                                                            |   |                                         | 42,599  |   |              |   | 40,546 |   |
| Bank-owned life insurance                                                                              |   |                                         | 23,107  |   |              |   | 22,673 |   |
| Other real estate owned, net of valuation allowance of $2,700 and $2,775                               |   |                                         | 6,549   |   |              |   | 6,415 |   |
| Other assets                                                                                           |   |                                         | 13,104  |   |              |   | 14,597 |   |
| Total assets                                                                                           |   | $                                            | 860,901 |   |              | $      | 864,288 |   |
|                                                                                                   |   |                                         |    |   |              |   |   |   |
| Liabilities & Stockholders' Equity                                                                 |   |                                         |    |   |              |   |   |   |
|                                                                                                   |   |                                         |    |   |              |   |   |   |
| Deposits:                                                                                              |   |                                         |    |   |              |   |   |   |
| Noninterest-bearing deposits                                                                           |   | $                                            | 185,277 |   |              | $      | 182,513 |   |
| Savings deposits                                                                                       |   |                                         | 292,481 |   |              |   | 286,085 |   |
| Time deposits                                                                                          |   |                                         | 238,770 |   |              |   | 256,807 |   |
| Total deposits                                                                                         |   |                                         | 716,528 |   |              |   | 725,405 |   |
| Overnight repurchase agreements                                                                        |   |                                         | 25,677  |   |              |   | 31,175 |   |
| Term repurchase agreements                                                                             |   |                                         | 412     |   |              |   | 411 |   |
| Federal Home Loan Bank advances                                                                        |   |                                         | 30,000  |   |              |   | 25,000 |   |
| Accrued expenses and other liabilities                                                                 |   |                                         | 2,297   |   |              |   | 1,536 |   |
| Total liabilities                                                                                      |   |                                         | 774,914 |   |              |   | 783,527 |   |
|                                                                                                   |   |                                         |    |   |              |   |   |   |
| Commitments and contingencies                                                                          |   |                                         | 0       |   |              |   | 0 |   |
|                                                                                                   |   |                                         |    |   |              |   |   |   |
| Stockholders' equity:                                                                                  |   |                                         |    |   |              |   |   |   |
| Common stock, $5/share par value, 10,000,000 shares authorized;4,959,009 shares issued and outstanding |   |                                         | 24,795  |   |              |   | 24,795 |   |
| Additional paid-in capital                                                                             |   |                                         | 16,392  |   |              |   | 16,392 |   |
| Retained earnings                                                                                      |   |                                         | 51,859  |   |              |   | 50,376 |   |
| Accumulated other comprehensive loss, net                                                              |   |                                         | (7,059  | )      |              |   | (10,802 | ) |
| Total stockholders' equity                                                                             |   |                                         | 85,987  |   |              |   | 80,761 |   |
| Total liabilities and stockholders' equity                                                             |   | $                                            | 860,901 |   |              | $      | 864,288 |   |

----

|                                                                                                     |   | Three Months Ended June 30,                             |      |   | Six Months Ended June 30, |   |
|----------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|-----------|--------|---------------------------|--------|
|                                                                                                     |   | 2014                                                    |      |   | 2013                      |   |   | 2014 |   |   | 2013 |   |
|                                                                                                     |   | (unaudited, dollars in thousands except per share data) |      |
| Interest and Dividend Income:                                                                            |   |                                                         |      |   |                           |   |   |  |   |   |  |   |
| Interest and fees on loans                                                                               |   | $                                                       | 6,122     |   |                      | $      | 5,891 |   |   | $ | 12,115 |   |   | $ | 11,899 |   |
| Interest on due from banks                                                                               |   |                                                    | 0         |   |                      |   | 19 |   |   |   | 3 |   |   |   | 33 |   |
| Interest on federal funds sold                                                                           |   |                                                    | 0         |   |                      |   | 1 |   |   |   | 5 |   |   |   | 1 |   |
| Interest on securities:                                                                                  |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                  |   |                                                    | 962       |   |                      |   | 1,252 |   |   |   | 1,967 |   |   |   | 2,576 |   |
| Tax-exempt                                                                                               |   |                                                    | 426       |   |                      |   | 287 |   |   |   | 855 |   |   |   | 552 |   |
| Dividends and interest on all other securities                                                           |   |                                                    | 26        |   |                      |   | 26 |   |   |   | 57 |   |   |   | 44 |   |
| Total interest and dividend income                                                                       |   |                                                    | 7,536     |   |                      |   | 7,476 |   |   |   | 15,002 |   |   |   | 15,105 |   |
|                                                                                                     |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense:                                                                                        |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest on savings deposits                                                                             |   |                                                    | 52        |   |                      |   | 69 |   |   |   | 123 |   |   |   | 156 |   |
| Interest on time deposits                                                                                |   |                                                    | 595       |   |                      |   | 796 |   |   |   | 1,244 |   |   |   | 1,650 |   |
| Interest on federal funds purchased, securities sold under agreements to repurchase and other borrowings |   |                                                    | 8         |   |                      |   | 7 |   |   |   | 17 |   |   |   | 19 |   |
| Interest on Federal Home Loan Bank advances                                                              |   |                                                    | 307       |   |                      |   | 305 |   |   |   | 609 |   |   |   | 607 |   |
| Total interest expense                                                                                   |   |                                                    | 962       |   |                      |   | 1,177 |   |   |   | 1,993 |   |   |   | 2,432 |   |
| Net interest income                                                                                      |   |                                                    | 6,574     |   |                      |   | 6,299 |   |   |   | 13,009 |   |   |   | 12,673 |   |
| Provision for loan losses                                                                                |   |                                                    | 100       |   |                      |   | 300 |   |   |   | 350 |   |   |   | 500 |   |
| Net interest income, after provision for loan losses                                                     |   |                                                    | 6,474     |   |                      |   | 5,999 |   |   |   | 12,659 |   |   |   | 12,173 |   |
|                                                                                                     |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Income:                                                                                      |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Income from fiduciary activities                                                                         |   |                                                    | 793       |   |                      |   | 866 |   |   |   | 1,748 |   |   |   | 1,766 |   |
| Service charges on deposit accounts                                                                      |   |                                                    | 1,056     |   |                      |   | 1,036 |   |   |   | 2,030 |   |   |   | 2,033 |   |
| Other service charges, commissions and fees                                                              |   |                                                    | 1,041     |   |                      |   | 912 |   |   |   | 1,993 |   |   |   | 1,771 |   |
| Income from bank-owned life insurance                                                                    |   |                                                    | 217       |   |                      |   | 217 |   |   |   | 433 |   |   |   | 432 |   |
| Income from Old Point Mortgage                                                                           |   |                                                    | 6         |   |                      |   | 218 |   |   |   | 31 |   |   |   | 304 |   |
| Loss on sale of available-for-sale securities, net                                                       |   |                                                    | (7        | )      |                      |   | (21 | ) |   |   | (7 | ) |   |   | (21 | ) |
| Other operating income                                                                                   |   |                                                    | 47        |   |                      |   | 57 |   |   |   | 87 |   |   |   | 113 |   |
| Total noninterest income                                                                                 |   |                                                    | 3,153     |   |                      |   | 3,285 |   |   |   | 6,315 |   |   |   | 6,398 |   |
|                                                                                                     |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Expense:                                                                                     |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                                                           |   |                                                    | 4,981     |   |                      |   | 4,805 |   |   |   | 9,834 |   |   |   | 9,726 |   |
| Occupancy and equipment                                                                                  |   |                                                    | 1,205     |   |                      |   | 1,079 |   |   |   | 2,319 |   |   |   | 2,191 |   |
| Data processing                                                                                          |   |                                                    | 433       |   |                      |   | 413 |   |   |   | 856 |   |   |   | 835 |   |
| FDIC insurance                                                                                           |   |                                                    | 183       |   |                      |   | 174 |   |   |   | 367 |   |   |   | 357 |   |
| Customer development                                                                                     |   |                                                    | 207       |   |                      |   | 205 |   |   |   | 399 |   |   |   | 411 |   |
| Legal and audit expense                                                                                  |   |                                                    | 153       |   |                      |   | 124 |   |   |   | 277 |   |   |   | 235 |   |
| Other outside service fees                                                                               |   |                                                    | 152       |   |                      |   | 113 |   |   |   | 271 |   |   |   | 209 |   |
| Employee professional development                                                                        |   |                                                    | 220       |   |                      |   | 182 |   |   |   | 388 |   |   |   | 313 |   |
| Marketing and advertising                                                                                |   |                                                    | 127       |   |                      |   | 124 |   |   |   | 251 |   |   |   | 247 |   |
| Postage and courier                                                                                      |   |                                                    | 113       |   |                      |   | 120 |   |   |   | 234 |   |   |   | 243 |   |
| Loan expenses                                                                                            |   |                                                    | 118       |   |                      |   | 87 |   |   |   | 216 |   |   |   | 177 |   |
| Stationery and supplies                                                                                  |   |                                                    | 118       |   |                      |   | 96 |   |   |   | 237 |   |   |   | 216 |   |
| Capital stock tax                                                                                        |   |                                                    | 127       |   |                      |   | 105 |   |   |   | 261 |   |   |   | 192 |   |
| Loss (gain) on write-down/sale of other real estate owned                                                |   |                                                    | (26       | )      |                      |   | 78 |   |   |   | 57 |   |   |   | 204 |   |
| Other operating expense                                                                                  |   |                                                    | 356       |   |                      |   | 345 |   |   |   | 763 |   |   |   | 719 |   |
| Total noninterest expense                                                                                |   |                                                    | 8,467     |   |                      |   | 8,050 |   |   |   | 16,730 |   |   |   | 16,275 |   |
| Income before income taxes                                                                               |   |                                                    | 1,160     |   |                      |   | 1,234 |   |   |   | 2,244 |   |   |   | 2,296 |   |
| Income tax expense                                                                                       |   |                                                    | 59        |   |                      |   | 219 |   |   |   | 166 |   |   |   | 380 |   |
| Net income                                                                                               |   | $                                                       | 1,101     |   |                      | $      | 1,015 |   |   | $ | 2,078 |   |   | $ | 1,916 |   |
|                                                                                                     |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic Earnings per Share:                                                                                |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Average shares outstanding                                                                               |   |                                                    | 4,959,009 |   |                      |   | 4,959,009 |   |   |   | 4,959,009 |   |   |   | 4,959,009 |   |
| Net income per share of common stock                                                                     |   | $                                                       | 0.22      |   |                      | $      | 0.21 |   |   | $ | 0.42 |   |   | $ | 0.39 |   |
|                                                                                                     |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Diluted Earnings per Share:                                                                              |   |                                                    |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Average shares outstanding                                                                               |   |                                                    | 4,959,009 |   |                      |   | 4,959,009 |   |   |   | 4,959,009 |   |   |   | 4,959,009 |   |
| Net income per share of common stock                                                                     |   | $                                                       | 0.22      |   |                      | $      | 0.21 |   |   | $ | 0.42 |   |   | $ | 0.39 |   |

----

|                                                                            |   | Three Months EndedJune 30,        |   |   | Six Months EndedJune 30, |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|--------------------------|--------|
|                                                                            |   | 2014                              |   |   | 2013                     |   |   | 2014 |   |   | 2013 |   |
|                                                                            |   | (unaudited, dollars in thousands) |   |
| Net income                                                                      |   | $                                 | 1,101  |   |                     | $      | 1,015 |   |   | $ | 2,078 |   |   | $ | 1,916 |   |
| Other comprehensive income (loss), net of tax                                   |   |                              |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains (losses) on available-for-sale securities                      |   |                              | 1,932  |   |                     |   | (6,497 | ) |   |   | 3,484 |   |   |   | (8,223 | ) |
| Amortization of unrealized losses on securities transferred to held-to-maturity |   |                              | 133    |   |                     |   | 0 |   |   |   | 259 |   |   |   | 0 |   |
| Other comprehensive income (loss)                                               |   |                              | 2,065  |   |                     |   | (6,497 | ) |   |   | 3,743 |   |   |   | (8,223 | ) |
| Comprehensive income (loss)                                                     |   | $                                 | 3,166  |   |                     | $      | (5,482 | ) |   | $ | 5,821 |   |   | $ | (6,307 | ) |

----

| (unaudited, dollars in thousands except per share data) |   | Shares ofCommonStock |      |   | CommonStock |   |   | AdditionalPaid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   | Total  |   |
|---------------------------------------------------------|--------|----------------------|-----------|--------|-------------|--------|--------|--------------------------|--------|--------|------------------|--------|--------|--------------------------------------------|--------|--------|--------|--------|
| SIX MONTHS ENDED JUNE 30, 2014                          |   |                      |      |   |             |   |   |                          |   |   |                  |   |   |                                            |   |   |        |   |
|                                                    |   |                      |      |   |             |   |   |                          |   |   |                  |   |   |                                            |   |   |        |   |
| Balance at beginning of period                          |   |                 | 4,959,009 |   |        | $      | 24,795 |                     |   | $      | 16,392           |   |   | $                                          | 50,376 |   |   | $      | (10,802 | ) |   | $ | 80,761 |   |
| Net income                                              |   |                 | 0         |   |        |   | 0      |                     |   |   | 0                |   |   |                                       | 2,078  |   |   |   | 0 |   |   |   | 2,078 |   |
| Other comprehensive income, net of tax                  |   |                 | 0         |   |        |   | 0      |                     |   |   | 0                |   |   |                                       | 0      |   |   |   | 3,743 |   |   |   | 3,743 |   |
| Cash dividends ($0.12 per share)                        |   |                 | 0         |   |        |   | 0      |                     |   |   | 0                |   |   |                                       | (595   | )      |   |   | 0 |   |   |   | (595 | ) |
|                                                    |   |                 |      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Balance at end of period                                |   |                 | 4,959,009 |   |        | $      | 24,795 |                     |   | $      | 16,392           |   |   | $                                          | 51,859 |   |   | $      | (7,059 | ) |   | $ | 85,987 |   |
|                                                         |   |                 |      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |   |
|                                                         |   |                 |      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |   |
| SIX MONTHS ENDED JUNE 30, 2013                          |   |                 |      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |   |
|                                                    |   |                 |      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                          |   |                 | 4,959,009 |   |        | $      | 24,795 |                     |   | $      | 16,392           |   |   | $                                          | 48,305 |   |   | $      | (192 | ) |   | $ | 89,300 |   |
| Net income                                              |   |                 | 0         |   |        |   | 0      |                     |   |   | 0                |   |   |                                       | 1,916  |   |   |   | 0 |   |   |   | 1,916 |   |
| Other comprehensive loss, net of tax                    |   |                 | 0         |   |        |   | 0      |                     |   |   | 0                |   |   |                                       | 0      |   |   |   | (8,223 | ) |   |   | (8,223 | ) |
| Cash dividends ($0.10 per share)                        |   |                 | 0         |   |        |   | 0      |                     |   |   | 0                |   |   |                                       | (496   | )      |   |   | 0 |   |   |   | (496 | ) |
|                                                    |   |                 |      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Balance at end of period                                |   |                 | 4,959,009 |   |        | $      | 24,795 |                     |   | $      | 16,392           |   |   | $                                          | 49,725 |   |   | $      | (8,415 | ) |   | $ | 82,497 |   |

----

| Six Months Ended June 30,                                                            |   | 2014                      |    |   | 2013   |    |
|--------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|--------|---------|
|                                                                                 |   | (unaudited, in thousands) |    |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                 |   |                           |    |   |        |    |
| Net income                                                                           |   | $                         | 2,078   |   |   | $       | 1,916 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:    |   |                      |    |   |   |    |   |   |
| Depreciation and amortization                                                        |   |                      | 1,030   |   |   |    | 980 |   |
| Provision for loan losses                                                            |   |                      | 350     |   |   |    | 500 |   |
| Net loss on sale of available-for-sale securities                                    |   |                      | 7       |   |   |    | 21 |   |
| Net amortization of securities                                                       |   |                      | 1,125   |   |   |    | 1,318 |   |
| Net loss on disposal of premises and equipment                                       |   |                      | 0       |   |   |    | 16 |   |
| Net loss on write-down/sale of other real estate owned                               |   |                      | 57      |   |   |    | 204 |   |
| Income from bank owned life insurance                                                |   |                      | (433    | )      |   |    | (432 | ) |
| Deferred tax (benefit) expense                                                       |   |                      | 130     |   |   |    | (117 | ) |
| Increase in other assets                                                             |   |                      | (675    | )      |   |    | (522 | ) |
| Increase in other liabilities                                                        |   |                      | 761     |   |   |    | 807 |   |
| Net cash provided by operating activities                                            |   |                      | 4,430   |   |   |    | 4,691 |   |
|                                                                                 |   |                      |    |   |   |    |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                 |   |                      |    |   |   |    |   |   |
| Purchases of available-for-sale securities                                           |   |                      | (2,275  | )      |   |    | (11,377 | ) |
| Purchases of held-to-maturity securities                                             |   |                      | 0       |   |   |    | (10,854 | ) |
| Proceeds from sales of restricted securities                                         |   |                      | 85      |   |   |    | 184 |   |
| Proceeds from maturities and calls of available-for-sale securities                  |   |                      | 170     |   |   |    | 10,490 |   |
| Proceeds from sales of available-for-sale securities                                 |   |                      | 13,702  |   |   |    | 39,301 |   |
| Paydowns on available-for-sale securities                                            |   |                      | 4,796   |   |   |    | 18,672 |   |
| Paydowns on held-to-maturity securities                                              |   |                      | 2,701   |   |   |    | 0 |   |
| (Increase) decrease in loans made to customers                                       |   |                      | (20,060 | )      |   |    | 230 |   |
| Proceeds from sales of other real estate owned                                       |   |                      | 711     |   |   |    | 1,117 |   |
| Purchases of premises and equipment                                                  |   |                      | (3,083  | )      |   |    | (4,483 | ) |
| Net cash provided by (used in) investing activities                                  |   |                      | (3,253  | )      |   |    | 43,280 |   |
|                                                                                 |   |                      |    |   |   |    |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                 |   |                      |    |   |   |    |   |   |
| Increase in noninterest-bearing deposits                                             |   |                      | 2,764   |   |   |    | 1,099 |   |
| Increase in savings deposits                                                         |   |                      | 6,396   |   |   |    | 2,568 |   |
| Decrease in time deposits                                                            |   |                      | (18,037 | )      |   |    | (27,115 | ) |
| Decrease in federal funds purchased, repurchase agreements and other borrowings, net |   |                      | (5,497  | )      |   |    | (11,173 | ) |
| Increase in Federal Home Loan Bank advances                                          |   |                      | 10,000  |   |   |    | 0 |   |
| Repayment of Federal Home Loan Bank advances                                         |   |                      | (5,000  | )      |   |    | 0 |   |
| Cash dividends paid on common stock                                                  |   |                      | (595    | )      |   |    | (496 | ) |
| Net cash used in financing activities                                                |   |                      | (9,969  | )      |   |    | (35,117 | ) |
|                                                                                 |   |                      |    |   |   |    |   |   |
| Net increase (decrease) in cash and cash equivalents                                 |   |                      | (8,792  | )      |   |    | 12,854 |   |
| Cash and cash equivalents at beginning of period                                     |   |                      | 31,325  |   |   |    | 42,317 |   |
| Cash and cash equivalents at end of period                                           |   | $                         | 22,533  |   |   | $       | 55,171 |   |
|                                                                                 |   |                      |    |   |   |    |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                    |   |                      |    |   |   |    |   |   |
| Cash payments for:                                                                   |   |                      |    |   |   |    |   |   |
| Interest                                                                             |   | $                         | 2,054   |   |   | $       | 2,505 |   |
| Income tax                                                                           |   | $                         | 360     |   |   | $       | 450 |   |
|                                                                                 |   |                      |    |   |   |    |   |   |
| SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS                                        |   |                      |    |   |   |    |   |   |
| Unrealized gain (loss) on securities available-for-sale                              |   | $                         | 5,278   |   |   | $  | (12,459 | ) |
| Loans transferred to other real estate owned                                         |   | $                         | 892     |   |   | $       | 866 |   |
| Former branch site transferred from fixed assets to foreclosed properties            |   | $                         | 0       |   |   | $       | 506 |   |
| Book value of equity securities transferred from other assets to available-for-sale  |   | $                         | 100     |   |   | $       | 0 |   |
| Amortization of unrealized loss on securities transferred to held-to-maturity        |   | $                         | 392     |   |   | $       | 0 |   |

----

|                                            |   | AmortizedCost  |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|-------------------------------------------------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                                            |   | (in thousands) |   |
| June 30, 2014                                   |   |                |   |
| Obligations of  U.S. Government agencies   |   | $              | 400    |   |                 | $      | 0      |                  |   | $      | (3        | )      |   | $ | 397 |   |
| Obligations of state and political subdivisions |   |           | 29,826 |   |                 |   | 326    |                  |   |   | (78       | )      |   |   | 30,074 |   |
| Mortgage-backed securities                      |   |           | 63,764 |   |                 |   | 2,856  |                  |   |   | 0         |   |   |   | 66,620 |   |
| Total                                           |   | $              | 93,990 |   |                 | $      | 3,182  |                  |   | $      | (81       | )      |   | $ | 97,091 |   |
|                                            |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| December 31, 2013                               |   |           |   |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Obligations of  U.S. Government agencies   |   | $              | 400    |   |                 | $      | 1      |                  |   | $      | (5        | )      |   | $ | 396 |   |
| Obligations of state and political subdivisions |   |           | 30,120 |   |                 |   | 29     |                  |   |   | (715      | )      |   |   | 29,434 |   |
| Mortgage-backed securities                      |   |           | 66,327 |   |                 |   | 1,296  |                  |   |   | 0         |   |   |   | 67,623 |   |
| Total                                           |   | $              | 96,847 |   |                 | $      | 1,326  |                  |   | $      | (720      | )      |   | $ | 97,453 |   |

----

|                                            |   | AmortizedCost  |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|-------------------------------------------------|--------|----------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                                            |   | (in thousands) |    |
| June 30, 2014                                   |   |                |    |   |                      |   |   |                       |   |   |           |   |
| Obligations of  U.S. Government agencies   |   | $              | 14,956  |   |                 | $      | 260    |                  |   | $      | (285      | )      |   | $ | 14,931 |   |
| Obligations of state and political subdivisions |   |           | 50,601  |   |                 |   | 291    |                  |   |   | (1,397    | )      |   |   | 49,495 |   |
| Mortgage-backed securities                      |   |           | 78,249  |   |                 |   | 3      |                  |   |   | (1,627    | )      |   |   | 76,625 |   |
| Money market investments                        |   |           | 614     |   |                 |   | 0      |                  |   |   | 0         |   |   |   | 614 |   |
| Corporate bonds                                 |   |           | 2,298   |   |                 |   | 4      |                  |   |   | (11       | )      |   |   | 2,291 |   |
| Other marketable equity securities              |   |           | 100     |   |                 |   | 0      |                  |   |   | (16       | )      |   |   | 84 |   |
| Total                                           |   | $              | 146,818 |   |                 | $      | 558    |                  |   | $      | (3,336    | )      |   | $ | 144,040 |   |
|                                            |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| December 31, 2013                               |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Obligations of  U.S. Government agencies   |   | $              | 15,189  |   |                 | $      | 263    |                  |   | $      | (428      | )      |   | $ | 15,024 |   |
| Obligations of state and political subdivisions |   |           | 51,032  |   |                 |   | 86     |                  |   |   | (4,018    | )      |   |   | 47,100 |   |
| Mortgage-backed securities                      |   |           | 94,685  |   |                 |   | 0      |                  |   |   | (3,935    | )      |   |   | 90,750 |   |
| Money market investments                        |   |           | 691     |   |                 |   | 0      |                  |   |   | 0         |   |   |   | 691 |   |
| Corporate bonds                                 |   |           | 2,098   |   |                 |   | 1      |                  |   |   | (25       | )      |   |   | 2,074 |   |
| Total                                           |   | $              | 163,695 |   |                 | $      | 350    |                  |   | $      | (8,406    | )      |   | $ | 155,639 |   |

----

|                                            |   | June 30, 2014           |   |
|-------------------------------------------------|--------|-------------------------|--------|
|                                            |   | Less Than Twelve Months |   |   | More Than Twelve Months |   |   | Total |   |
|                                            |   | GrossUnrealizedLosses   |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | NumberofSecurities |   |
|                                            |   | (dollars in thousands)  |   |
| Securities Available-for-Sale                   |   |                         |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Debt securities:                                |   |                         |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Obligations of U.S. Government agencies         |   | $                       | 0      |   |   | $ | 0 |   |   | $ | 285 |   |   | $ | 4,320 |   |   | $ | 285 |   |   | $ | 4,320 |   |   |   | 1 |   |
| Obligations of state and political subdivisions |   |                    | 29     |   |   |   | 4,983 |   |   |   | 1,368 |   |   |   | 27,004 |   |   |   | 1,397 |   |   |   | 31,987 |   |   |   | 55 |   |
| Mortgage-backed securities                      |   |                    | 0      |   |   |   | 0 |   |   |   | 1,627 |   |   |   | 63,446 |   |   |   | 1,627 |   |   |   | 63,446 |   |   |   | 8 |   |
| Corporate bonds                                 |   |                    | 2      |   |   |   | 398 |   |   |   | 9 |   |   |   | 791 |   |   |   | 11 |   |   |   | 1,189 |   |   |   | 10 |   |
| Total debt securities                           |   |                    | 31     |   |   |   | 5,381 |   |   |   | 3,289 |   |   |   | 95,561 |   |   |   | 3,320 |   |   |   | 100,942 |   |   |   | 74 |   |
| Other marketable equity securities              |   |                    | 16     |   |   |   | 84 |   |   |   | 0 |   |   |   | 0 |   |   |   | 16 |   |   |   | 84 |   |   |   | 1 |   |
| Total securities available-for-sale             |   | $                       | 47     |   |   | $ | 5,465 |   |   | $ | 3,289 |   |   | $ | 95,561 |   |   | $ | 3,336 |   |   | $ | 101,026 |   |   |   | 75 |   |
|                                            |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held-to-Maturity                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies         |   | $                       | 0      |   |   | $ | 0 |   |   | $ | 3 |   |   | $ | 97 |   |   | $ | 3 |   |   | $ | 97 |   |   |   | 1 |   |
| Obligations of state and political subdivisions |   |                    | 14     |   |   |   | 3,625 |   |   |   | 64 |   |   |   | 3,213 |   |   |   | 78 |   |   |   | 6,838 |   |   |   | 14 |   |
| Total securities held-to-maturity               |   | $                       | 14     |   |   | $ | 3,625 |   |   | $ | 67 |   |   | $ | 3,310 |   |   | $ | 81 |   |   | $ | 6,935 |   |   |   | 15 |   |
|                                            |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities                                |   | $                       | 61     |   |   | $ | 9,090 |   |   | $ | 3,356 |   |   | $ | 98,871 |   |   | $ | 3,417 |   |   | $ | 107,961 |   |   |   | 90 |   |

----

|                                            |   | December 31, 2013       |   |
|-------------------------------------------------|--------|-------------------------|--------|
|                                            |   | Less Than Twelve Months |   |   | More Than Twelve Months |   |   | Total |   |
|                                            |   | GrossUnrealizedLosses   |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | NumberofSecurities |   |
|                                            |   | (dollars in thousands)  |   |
| Securities Available-for-Sale                   |   |                         |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Debt securities:                                |   |                         |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Obligations of U.S. Government agencies         |   | $                       | 0      |   |   | $ | 0 |   |   | $ | 428 |   |   | $ | 4,403 |   |   | $ | 428 |   |   | $ | 4,403 |   |   |   | 1 |   |
| Obligations of state and political subdivisions |   |                    | 3,246  |   |   |   | 36,235 |   |   |   | 772 |   |   |   | 6,450 |   |   |   | 4,018 |   |   |   | 42,685 |   |   |   | 82 |   |
| Mortgage-backed securities                      |   |                    | 3,321  |   |   |   | 81,664 |   |   |   | 614 |   |   |   | 9,086 |   |   |   | 3,935 |   |   |   | 90,750 |   |   |   | 12 |   |
| Corporate bonds                                 |   |                    | 19     |   |   |   | 1,279 |   |   |   | 6 |   |   |   | 295 |   |   |   | 25 |   |   |   | 1,574 |   |   |   | 12 |   |
| Total securities available-for-sale             |   | $                       | 6,586  |   |   | $ | 119,178 |   |   | $ | 1,820 |   |   | $ | 20,234 |   |   | $ | 8,406 |   |   | $ | 139,412 |   |   |   | 107 |   |
|                                            |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held-to-Maturity                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies         |   | $                       | 0      |   |   | $ | 0 |   |   | $ | 5 |   |   | $ | 95 |   |   | $ | 5 |   |   | $ | 95 |   |   |   | 1 |   |
| Obligations of state and political subdivisions |   |                    | 715    |   |   |   | 23,765 |   |   |   | 0 |   |   |   | 0 |   |   |   | 715 |   |   |   | 23,765 |   |   |   | 50 |   |
| Total securities held-to-maturity               |   | $                       | 715    |   |   | $ | 23,765 |   |   | $ | 5 |   |   | $ | 95 |   |   | $ | 720 |   |   | $ | 23,860 |   |   |   | 51 |   |
|                                            |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities                                |   | $                       | 7,301  |   |   | $ | 142,943 |   |   | $ | 1,825 |   |   | $ | 20,329 |   |   | $ | 9,126 |   |   | $ | 163,272 |   |   |   | 158 |   |

----

|                                      |   | June 30, 2014  |    |   | December 31, 2013 |   |
|-------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                      |   | (in thousands) |    |
| Mortgage loans on real estate:            |   |                |    |   |                   |   |
| Residential 1-4 family                    |   | $              | 85,206  |   |              | $      | 84,500 |   |
| Commercial                                |   |           | 294,298 |   |              |   | 287,071 |   |
| Construction                              |   |           | 14,100  |   |              |   | 14,505 |   |
| Second mortgages                          |   |           | 12,756  |   |              |   | 13,232 |   |
| Equity lines of credit                    |   |           | 38,255  |   |              |   | 32,163 |   |
| Total mortgage loans on real estate       |   |           | 444,615 |   |              |   | 431,471 |   |
| Commercial loans                          |   |           | 34,973  |   |              |   | 30,702 |   |
| Consumer loans                            |   |           | 18,625  |   |              |   | 19,791 |   |
| Other                                     |   |           | 21,449  |   |              |   | 18,735 |   |
| Total loans                               |   |           | 519,662 |   |              |   | 500,699 |   |
| Less: Allowance for loan losses           |   |           | (6,976  | )      |              |   | (6,831 | ) |
| Loans, net of allowance and deferred fees |   | $              | 512,686 |   |              | $      | 493,868 |   |

| · | Pass: Loans are of acceptable risk. |
|--------|-------------------------------------|

| · | Other Assets Especially Mentioned (OAEM): Loans have potential weaknesses that deserve management's close attention. |
|--------|----------------------------------------------------------------------------------------------------------------------|

| · | Substandard: Loans reflect significant deficiencies due to several adverse trends of a financial, economic or managerial nature. |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

| · | Doubtful: Loans have all the weaknesses inherent in a substandard loan with added characteristics that make collection or liquidation in full based on currently existing facts, conditions and values highly questionable or improbable. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Loss: Loans have been charged off because they are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Credit Quality InformationAs of June 30, 2014 |   |
|-----------------------------------------------|--------|
| (in thousands)                                |   |
|                                          |   | Pass |   |   | OAEM |   |   | Substandard |   |   | Total |   |
|                                          |   |  |   |   |  |   |   |  |   |   |  |   |
| Mortgage loans on real estate:                |   |  |   |   |  |   |   |  |   |   |  |   |
| Residential 1-4 family                        |   | $ | 80,378 |   |   | $ | 0 |   |   | $ | 4,828 |   |   | $ | 85,206 |   |
| Commercial                                    |   |   | 285,386 |   |   |   | 4,266 |   |   |   | 4,646 |   |   |   | 294,298 |   |
| Construction                                  |   |   | 11,196 |   |   |   | 456 |   |   |   | 2,448 |   |   |   | 14,100 |   |
| Second mortgages                              |   |   | 12,517 |   |   |   | 0 |   |   |   | 239 |   |   |   | 12,756 |   |
| Equity lines of credit                        |   |   | 37,547 |   |   |   | 0 |   |   |   | 708 |   |   |   | 38,255 |   |
| Total mortgage loans on real estate           |   |   | 427,024 |   |   |   | 4,722 |   |   |   | 12,869 |   |   |   | 444,615 |   |
| Commercial loans                              |   |   | 34,817 |   |   |   | 85 |   |   |   | 71 |   |   |   | 34,973 |   |
| Consumer loans                                |   |   | 18,557 |   |   |   | 0 |   |   |   | 68 |   |   |   | 18,625 |   |
| Other                                         |   |   | 21,449 |   |   |   | 0 |   |   |   | 0 |   |   |   | 21,449 |   |
| Total                                         |   | $ | 501,847 |   |   | $ | 4,807 |   |   | $ | 13,008 |   |   | $ | 519,662 |   |

| Credit Quality InformationAs of December 31, 2013 |   |
|---------------------------------------------------|--------|
| (in thousands)                                    |   |
|                                              |   | Pass |   |   | OAEM |   |   | Substandard |   |   | Total |   |
|                                              |   |  |   |   |  |   |   |  |   |   |  |   |
| Mortgage loans on real estate:                    |   |  |   |   |  |   |   |  |   |   |  |   |
| Residential 1-4 family                            |   | $ | 78,612 |   |   | $ | 1,167 |   |   | $ | 4,721 |   |   | $ | 84,500 |   |
| Commercial                                        |   |   | 274,749 |   |   |   | 5,693 |   |   |   | 6,629 |   |   |   | 287,071 |   |
| Construction                                      |   |   | 10,319 |   |   |   | 640 |   |   |   | 3,546 |   |   |   | 14,505 |   |
| Second mortgages                                  |   |   | 12,994 |   |   |   | 0 |   |   |   | 238 |   |   |   | 13,232 |   |
| Equity lines of credit                            |   |   | 31,690 |   |   |   | 0 |   |   |   | 473 |   |   |   | 32,163 |   |
| Total mortgage loans on real estate               |   |   | 408,364 |   |   |   | 7,500 |   |   |   | 15,607 |   |   |   | 431,471 |   |
| Commercial loans                                  |   |   | 30,164 |   |   |   | 319 |   |   |   | 219 |   |   |   | 30,702 |   |
| Consumer loans                                    |   |   | 19,723 |   |   |   | 0 |   |   |   | 68 |   |   |   | 19,791 |   |
| Other                                             |   |   | 18,735 |   |   |   | 0 |   |   |   | 0 |   |   |   | 18,735 |   |
| Total                                             |   | $ | 476,986 |   |   | $ | 7,819 |   |   | $ | 15,894 |   |   | $ | 500,699 |   |

----

| Age Analysis of Past Due Loans as of June 30, 2014 |   |
|----------------------------------------------------|--------|
|                                               |   | 30 - 59 Days PastDue |   |   | 60 - 89Days PastDue |   |   | 90 or MoreDays PastDue |   |   | Total PastDue |   |   | TotalCurrentLoans (1) |   |   | TotalLoans |   |   | RecordedInvestment> 90 DaysPast DueandAccruing |   |
|                                               |   | (in thousands) |   |
| Mortgage loans on real estate:                     |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Residential 1-4 family                             |   | $ | 534 |   |   | $ | 61 |   |   | $ | 3,460 |   |   | $ | 4,055 |   |   | $ | 81,151 |   |   | $ | 85,206 |   |   | $ | 0 |   |
| Commercial                                         |   |   | 365 |   |   |   | 781 |   |   |   | 53 |   |   |   | 1,199 |   |   |   | 293,099 |   |   |   | 294,298 |   |   |   | 0 |   |
| Construction                                       |   |   | 456 |   |   |   | 0 |   |   |   | 2,448 |   |   |   | 2,904 |   |   |   | 11,196 |   |   |   | 14,100 |   |   |   | 67 |   |
| Second mortgages                                   |   |   | 3 |   |   |   | 5 |   |   |   | 33 |   |   |   | 41 |   |   |   | 12,715 |   |   |   | 12,756 |   |   |   | 33 |   |
| Equity lines of credit                             |   |   | 0 |   |   |   | 0 |   |   |   | 20 |   |   |   | 20 |   |   |   | 38,235 |   |   |   | 38,255 |   |   |   | 20 |   |
| Total mortgage loans on real estate                |   |   | 1,358 |   |   |   | 847 |   |   |   | 6,014 |   |   |   | 8,219 |   |   |   | 436,396 |   |   |   | 444,615 |   |   |   | 120 |   |
| Commercial loans                                   |   |   | 18 |   |   |   | 0 |   |   |   | 10 |   |   |   | 28 |   |   |   | 34,945 |   |   |   | 34,973 |   |   |   | 10 |   |
| Consumer loans                                     |   |   | 461 |   |   |   | 582 |   |   |   | 905 |   |   |   | 1,948 |   |   |   | 16,677 |   |   |   | 18,625 |   |   |   | 861 |   |
| Other                                              |   |   | 41 |   |   |   | 11 |   |   |   | 5 |   |   |   | 57 |   |   |   | 21,392 |   |   |   | 21,449 |   |   |   | 5 |   |
| Total                                              |   | $ | 1,878 |   |   | $ | 1,440 |   |   | $ | 6,934 |   |   | $ | 10,252 |   |   | $ | 509,410 |   |   | $ | 519,662 |   |   | $ | 996 |   |

| Age Analysis of Past Due Loans as of December 31, 2013 |   |
|--------------------------------------------------------|--------|
|                                                   |   | 30 - 59Days PastDue |   |   | 60 - 89Days PastDue |   |   | 90 or MoreDays PastDue |   |   | Total PastDue |   |   | TotalCurrentLoans (1) |   |   | TotalLoans |   |   | RecordedInvestment> 90 DaysPast Due andAccruing |   |
|                                                   |   | (in thousands) |   |
| Mortgage loans on real estate:                         |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Residential 1-4 family                                 |   | $ | 324 |   |   | $ | 82 |   |   | $ | 4,304 |   |   | $ | 4,710 |   |   | $ | 79,790 |   |   | $ | 84,500 |   |   | $ | 493 |   |
| Commercial                                             |   |   | 120 |   |   |   | 704 |   |   |   | 53 |   |   |   | 877 |   |   |   | 286,194 |   |   |   | 287,071 |   |   |   | 0 |   |
| Construction                                           |   |   | 0 |   |   |   | 0 |   |   |   | 2,545 |   |   |   | 2,545 |   |   |   | 11,960 |   |   |   | 14,505 |   |   |   | 0 |   |
| Second mortgages                                       |   |   | 0 |   |   |   | 10 |   |   |   | 34 |   |   |   | 44 |   |   |   | 13,188 |   |   |   | 13,232 |   |   |   | 34 |   |
| Equity lines of credit                                 |   |   | 139 |   |   |   | 0 |   |   |   | 0 |   |   |   | 139 |   |   |   | 32,024 |   |   |   | 32,163 |   |   |   | 0 |   |
| Total mortgage loans on real estate                    |   |   | 583 |   |   |   | 796 |   |   |   | 6,936 |   |   |   | 8,315 |   |   |   | 423,156 |   |   |   | 431,471 |   |   |   | 527 |   |
| Commercial loans                                       |   |   | 15 |   |   |   | 80 |   |   |   | 0 |   |   |   | 95 |   |   |   | 30,607 |   |   |   | 30,702 |   |   |   | 0 |   |
| Consumer loans                                         |   |   | 929 |   |   |   | 5 |   |   |   | 5 |   |   |   | 939 |   |   |   | 18,852 |   |   |   | 19,791 |   |   |   | 5 |   |
| Other                                                  |   |   | 51 |   |   |   | 15 |   |   |   | 14 |   |   |   | 80 |   |   |   | 18,655 |   |   |   | 18,735 |   |   |   | 14 |   |
| Total                                                  |   | $ | 1,578 |   |   | $ | 896 |   |   | $ | 6,955 |   |   | $ | 9,429 |   |   | $ | 491,270 |   |   | $ | 500,699 |   |   | $ | 546 |   |

----

| Nonaccrual Loans by Class           |   |
|-------------------------------------|--------|
|                                |   | June 30, 2014 |   |   | December 31, 2013 |   |
|                                |   | (in thousands) |   |
|                                |   |  |   |
| Mortgage loans on real estate       |   |  |   |   |  |   |
| Residential 1-4 family              |   | $ | 3,717 |   |   | $ | 4,024 |   |
| Commercial                          |   |   | 4,442 |   |   |   | 4,606 |   |
| Construction                        |   |   | 2,382 |   |   |   | 2,545 |   |
| Total mortgage loans on real estate |   |   | 10,541 |   |   |   | 11,175 |   |
| Commercial loans                    |   |   | 0 |   |   |   | 149 |   |
| Consumer loans                      |   |   | 44 |   |   |   | 0 |   |
| Total                               |   | $ | 10,585 |   |   | $ | 11,324 |   |

|                                                                    | Six Months Ended June 30, |   |
|-------------------------------------------------------------------------|---------------------------|--------|
|                                                                    | 2014                      |   |   | 2013 |   |
|                                                                    | (in thousands)            |   |
| Interest income that would have been recorded under original loan terms |                      | $      | 369 |   |   | $ | 275 |   |
| Actual interest income recorded for the period                          |                      |   | 170 |   |   |   | 51 |   |
| Reduction in interest income on nonaccrual loans                        |                      | $      | 199 |   |   | $ | 224 |   |

----

| Troubled Debt Restructurings by ClassFor the Three Months Ended June 30, 2013 |                   |
|-------------------------------------------------------------------------------|------------------------|
| (dollars in thousands)                                                        |                   |
|                                                                          | Number ofModifications |   | RecordedInvestmentPrior toModification |   | RecordedInvestmentAfterModification |   | Current Investment on June 30, 2013 |   |
| Mortgage loans on real estate:                                                |                   |  |   |  |   |  |   |
| Residential 1-4 family                                                        |                   |   | 2 |   |   | $ | $285 |   |   | $ | $285 |   |   | $ | $284 |   |

| Troubled Debt Restructurings by ClassFor the Six Months Ended June 30, 2014 |                   |
|-----------------------------------------------------------------------------|------------------------|
| (dollars in thousands)                                                      |                   |
|                                                                        | Number ofModifications |   | RecordedInvestmentPrior toModification |   | RecordedInvestmentAfterModification |   | CurrentInvestment onJune 30, 2014 |   |
| Mortgage loans on real estate:                                              |                   |  |   |  |   |  |   |
| Residential 1-4 family                                                      |                   |   | 1 |   |   | $ | 276 |   |   | $ | 276 |   |   | $ | 272 |   |
| Construction                                                                |                   |   | 1 |   |   |   | 103 |   |   |   | 103 |   |   |   | 103 |   |
| Second mortgages                                                            |                   |   | 1 |   |   |   | 89 |   |   |   | 89 |   |   |   | 88 |   |
| Total                                                                       |                   |   | 3 |   |   | $ | 468 |   |   | $ | 468 |   |   | $ | 463 |   |

| Troubled Debt Restructurings by ClassFor the Six Months Ended June 30, 2013 |                   |
|-----------------------------------------------------------------------------|------------------------|
| (dollars in thousands)                                                      |                   |
|                                                                        | Number ofModifications |   | RecordedInvestmentPrior toModification |   | RecordedInvestmentAfterModification |   | Current Investment on June 30, 2013 |   |
| Mortgage loans on real estate:                                              |                   |  |   |  |   |  |   |
| Residential 1-4 family                                                      |                   |   | 3 |   |   | $ | 676 |   |   | $ | 676 |   |   | $ | 673 |   |
| Commercial                                                                  |                   |   | 1 |   |   |   | 207 |   |   |   | 207 |   |   |   | 203 |   |
| Total                                                                       |                   |   | 4 |   |   | $ | 883 |   |   | $ | 883 |   |   | $ | 876 |   |

----

| Restructurings that Subsequently Defaulted |   |
|--------------------------------------------|--------|
| For the Three Months Ended June 30, 2013   |   |
| (in thousands)                             |   |
|                                       |   | Recorded Investment in Defaulting Loans as of June 30, 2013 |   |
| Mortgage loans on real estate:             |   |  |   |
| Residential 1-4 family                     |   | $ | 210 |   |

| Restructurings that Subsequently Defaulted |   |
|--------------------------------------------|--------|
| For the Six Months Ended June 30, 2014     |   |
| (in thousands)                             |   |
|                                       |   | Recorded Investment in Defaulting Loans as of June 30, 2014 |   |
| Mortgage loans on real estate:             |   |  |   |
| Residential 1-4 family                     |   | $ | 94 |   |

| Restructurings that Subsequently Defaulted |   |
|--------------------------------------------|--------|
| For the Six Months Ended June 30, 2013     |   |
| (in thousands)                             |   |
|                                       |   | Recorded Investment in Defaulting Loans as of June 30, 2013 |   |
| Mortgage loans on real estate:             |   |  |   |
| Residential 1-4 family                     |   | $ | 210 |   |
| Commercial                                 |   |   | 1,843 |   |
| Total                                      |   | $ | 2,053 |   |

----

| Impaired Loans by Class(in thousands) |   |
|---------------------------------------|--------|
|                                  |   | As of June 30, 2014 |   | For the six months ended June 30, 2014 |   |
|                                  |   |  |   | Recorded Investment |   |  |   |  |   |  |   |
|                                  |   | UnpaidPrincipalBalance |   | WithoutValuationAllowance |   | WithValuationAllowance |   | AssociatedAllowance |   | AverageRecordedInvestment |   | InterestIncomeRecognized |   |
| Mortgage loans on real estate:        |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Residential 1-4 family                |   | $ | 5,680 |   |   | $ | 4,464 |   |   | $ | 1,038 |   |   | $ | 137 |   |   | $ | 5,503 |   |   | $ | 60 |   |
| Commercial                            |   |   | 12,650 |   |   |   | 7,561 |   |   |   | 3,373 |   |   |   | 186 |   |   |   | 10,817 |   |   |   | 215 |   |
| Construction                          |   |   | 3,706 |   |   |   | 0 |   |   |   | 2,941 |   |   |   | 380 |   |   |   | 2,778 |   |   |   | 21 |   |
| Second mortgages                      |   |   | 455 |   |   |   | 271 |   |   |   | 153 |   |   |   | 117 |   |   |   | 460 |   |   |   | 11 |   |
| Total mortgage loans on real estate   |   | $ | 22,491 |   |   | $ | 12,296 |   |   | $ | 7,505 |   |   | $ | 820 |   |   | $ | 19,558 |   |   | $ | 307 |   |
| Commercial loans                      |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 74 |   |   |   | 0 |   |
| Consumer loans                        |   |   | 59 |   |   |   | 59 |   |   |   | 0 |   |   |   | 0 |   |   |   | 37 |   |   |   | 1 |   |
| Total                                 |   | $ | 22,550 |   |   | $ | 12,355 |   |   | $ | 7,505 |   |   | $ | 820 |   |   | $ | 19,669 |   |   | $ | 308 |   |

| Impaired Loans by Class(in thousands) |   |
|---------------------------------------|--------|
|                                  |   | As of December 31, 2013 |   | For the year endedDecember 31, 2013 |   |
|                                  |   |  |   | Recorded Investment |   |  |   |  |   |  |   |
|                                  |   | UnpaidPrincipalBalance |   | WithoutValuationAllowance |   | WithValuationAllowance |   | AssociatedAllowance |   | AverageRecordedInvestment |   | InterestIncomeRecognized |   |
| Mortgage loans on real estate:        |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Residential 1-4 family                |   | $ | 5,713 |   |   | $ | 1,542 |   |   | $ | 4,009 |   |   | $ | 1,383 |   |   | $ | 5,152 |   |   | $ | 102 |   |
| Commercial                            |   |   | 12,905 |   |   |   | 6,882 |   |   |   | 4,300 |   |   |   | 307 |   |   |   | 10,631 |   |   |   | 591 |   |
| Construction                          |   |   | 3,309 |   |   |   | 2,545 |   |   |   | 0 |   |   |   | 0 |   |   |   | 2,798 |   |   |   | 0 |   |
| Second mortgages                      |   |   | 374 |   |   |   | 296 |   |   |   | 47 |   |   |   | 3 |   |   |   | 462 |   |   |   | (19 | ) |
| Equity lines of credit                |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 97 |   |   |   | 0 |   |
| Total mortgage loans on real estate   |   | $ | 22,301 |   |   | $ | 11,265 |   |   | $ | 8,356 |   |   | $ | 1,693 |   |   | $ | 19,140 |   |   | $ | 674 |   |
| Commercial loans                      |   |   | 150 |   |   |   | 149 |   |   |   | 0 |   |   |   | 0 |   |   |   | 44 |   |   |   | 6 |   |
| Consumer loans                        |   |   | 15 |   |   |   | 0 |   |   |   | 15 |   |   |   | 0 |   |   |   | 17 |   |   |   | 1 |   |
| Total                                 |   | $ | 22,466 |   |   | $ | 11,414 |   |   | $ | 8,371 |   |   | $ | 1,693 |   |   | $ | 19,201 |   |   | $ | 681 |   |

----

| · | Commercial: Commercial loans carry risks associated with the successful operation of a business or project, in addition to other risks associated with the ownership of a business. The repayment of these loans may be dependent upon the profitability and cash flows of the business. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Real estate-construction: Construction loans carry risks that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may at any point in time be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be the loan customer, may be unable to finish the construction project as planned because of financial pressure unrelated to the project. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Real estate-mortgage: Residential mortgage loans and equity lines of credit carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. Commercial real estate loans carry risks associated with the successful operation of a business if owner occupied. If non-owner occupied, the repayment of these loans may be dependent upon the profitability and cash flow from rent receipts. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Consumer loans: Consumer loans carry risks associated with the continued credit-worthiness of the borrowers and the value of the collateral. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Other loans: Other loans are loans to mortgage companies, loans for purchasing or carrying securities, and loans to insurance, investment and finance companies. These loans carry risks associated with the successful operation of a business. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time, depend on interest rates or fluctuate in active trading markets. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ALLOWANCE FOR LOAN LOSSES AND RECORDED INVESTMENT IN LOANS |   |
|------------------------------------------------------------|--------|
| (in thousands)                                             |   |
| For the Six Months EndedJune 30, 2014                      |   | Commercial |   |   | Real Estate -Construction |   |   | Real Estate -Mortgage |   |   | Consumer |   |   | Other |   |   | Total |   |
| Allowance for Loan Losses:                                 |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Balance at the beginning of period                         |   | $ | 350 |   |   | $ | 662 |   |   | $ | 5,357 |   |   | $ | 294 |   |   | $ | 168 |   |   | $ | 6,831 |   |
| Charge-offs                                                |   |   | (139 | ) |   |   | 0 |   |   |   | (249 | ) |   |   | (93 | ) |   |   | (77 | ) |   |   | (558 | ) |
| Recoveries                                                 |   |   | 28 |   |   |   | 5 |   |   |   | 253 |   |   |   | 35 |   |   |   | 32 |   |   |   | 353 |   |
| Provision for loan losses                                  |   |   | 260 |   |   |   | 483 |   |   |   | (502 | ) |   |   | (1 | ) |   |   | 110 |   |   |   | 350 |   |
| Ending balance                                             |   | $ | 499 |   |   | $ | 1,150 |   |   | $ | 4,859 |   |   | $ | 235 |   |   | $ | 233 |   |   | $ | 6,976 |   |
| Ending balance individually evaluated for impairment       |   | $ | 0 |   |   | $ | 380 |   |   | $ | 440 |   |   | $ | 0 |   |   | $ | 0 |   |   | $ | 820 |   |
| Ending balance collectively evaluated for impairment       |   |   | 499 |   |   |   | 770 |   |   |   | 4,419 |   |   |   | 235 |   |   |   | 233 |   |   |   | 6,156 |   |
| Ending balance                                             |   | $ | 499 |   |   | $ | 1,150 |   |   | $ | 4,859 |   |   | $ | 235 |   |   | $ | 233 |   |   | $ | 6,976 |   |
| Loan Balances:                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance individually evaluated for impairment       |   | $ | 0 |   |   | $ | 2,941 |   |   | $ | 16,860 |   |   | $ | 59 |   |   | $ | 0 |   |   | $ | 19,860 |   |
| Ending balance collectively evaluated for impairment       |   |   | 34,973 |   |   |   | 11,159 |   |   |   | 413,655 |   |   |   | 18,566 |   |   |   | 21,449 |   |   |   | 499,802 |   |
| Ending balance                                             |   | $ | 34,973 |   |   | $ | 14,100 |   |   | $ | 430,515 |   |   | $ | 18,625 |   |   | $ | 21,449 |   |   | $ | 519,662 |   |

----

| For the Year EndedDecember 31, 2013                  |   | Commercial |   |   | Real Estate -Construction |   |   | Real Estate -Mortgage |   |   | Consumer |   |   | Other  |   |   | Total  |   |
|------------------------------------------------------|--------|------------|--------|--------|---------------------------|--------|--------|-----------------------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|
| Allowance for Loan Losses:                           |   |            |   |   |                           |   |   |                       |   |   |          |   |   |        |   |   |        |   |
| Balance at the beginning of period                   |   | $          | 677    |   |                      | $      | 187    |                  |   | $      | 6,179    |   |   | $      | 204    |   |   | $      | 77 |   |   | $ | 7,324 |   |
| Charge-offs                                          |   |       | (200   | )      |                      |   | (501   | )                     |   |   | (1,548   | )      |   |   | (141   | )      |   |   | (316 | ) |   |   | (2,706 | ) |
| Recoveries                                           |   |       | 76     |   |                      |   | 6      |                  |   |   | 513      |   |   |   | 111    |   |   |   | 207 |   |   |   | 913 |   |
| Provision for loan losses                            |   |       | (203   | )      |                      |   | 970    |                  |   |   | 213      |   |   |   | 120    |   |   |   | 200 |   |   |   | 1,300 |   |
| Ending balance                                       |   | $          | 350    |   |                      | $      | 662    |                  |   | $      | 5,357    |   |   | $      | 294    |   |   | $      | 168 |   |   | $ | 6,831 |   |
| Ending balance individually evaluated for impairment |   | $          | 0      |   |                      | $      | 0      |                  |   | $      | 1,693    |   |   | $      | 0      |   |   | $      | 0 |   |   | $ | 1,693 |   |
| Ending balance collectively evaluated for impairment |   |       | 350    |   |                      |   | 662    |                  |   |   | 3,664    |   |   |   | 294    |   |   |   | 168 |   |   |   | 5,138 |   |
| Ending balance                                       |   | $          | 350    |   |                      | $      | 662    |                  |   | $      | 5,357    |   |   | $      | 294    |   |   | $      | 168 |   |   | $ | 6,831 |   |
| Loan Balances:                                       |   |       |   |   |                      |   |   |                  |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance individually evaluated for impairment |   | $          | 149    |   |                      | $      | 2,545  |                  |   | $      | 17,076   |   |   | $      | 15     |   |   | $      | 0 |   |   | $ | 19,785 |   |
| Ending balance collectively evaluated for impairment |   |       | 30,553 |   |                      |   | 11,960 |                  |   |   | 399,890  |   |   |   | 19,776 |   |   |   | 18,735 |   |   |   | 480,914 |   |
| Ending balance                                       |   | $          | 30,702 |   |                      | $      | 14,505 |                  |   | $      | 416,966  |   |   | $      | 19,791 |   |   | $      | 18,735 |   |   | $ | 500,699 |   |

|                                 |   | Shares |    |   | WeightedAverageExercisePrice |   | WeightedAverageRemainingContractualLife(in years) |   | AggregateIntrinsicValue(in thousands) |   |
|--------------------------------------|--------|--------|---------|--------|------------------------------|--------|---------------------------------------------------|--------|---------------------------------------|--------|
| Options outstanding, January 1, 2014 |   |   | 151,335 |   |                         | $      | 21.66                                             |   |                                       |   |  |   |
| Granted                              |   |   | 0       |   |                         |   | 0                                                 |   |                                       |   |  |   |
| Exercised                            |   |   | 0       |   |                         |   | 0                                                 |   |                                       |   |  |   |
| Canceled or expired                  |   |   | (1,250  | )      |                         |   | 20.05                                             |   |                                       |   |  |   |
| Options outstanding, June 30, 2014   |   |   | 150,085 |   |                         | $      | 21.68                                             |   |                                  |   | 1.93 |   |   | $ | 0 |   |
| Options exercisable, June 30, 2014   |   |   | 150,085 |   |                         | $      | 21.68                                             |   |                                  |   | 1.93 |   |   | $ | 0 |   |

----

| Three months ended June 30,    |   | 2014           |   |   | 2013   |   |
|--------------------------------|--------|----------------|--------|--------|--------|--------|
|                           |   | (in thousands) |   |
| Interest cost                  |   | $              | 69     |   |   | $      | 63 |   |
| Expected return on plan assets |   |           | (91    | )      |   |   | (89 | ) |
| Amortization of net loss       |   |           | 55     |   |   |   | 75 |   |
| Net periodic pension plan cost |   | $              | 33     |   |   | $      | 49 |   |

| Six months ended June 30,      |   | 2014           |   |   | 2013   |   |
|--------------------------------|--------|----------------|--------|--------|--------|--------|
|                           |   | (in thousands) |   |
| Interest cost                  |   | $              | 137    |   |   | $      | 126 |   |
| Expected return on plan assets |   |           | (182   | )      |   |   | (177 | ) |
| Amortization of net loss       |   |           | 110    |   |   |   | 149 |   |
| Net periodic pension plan cost |   | $              | 65     |   |   | $      | 98 |   |

|                                   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |   | Affected Line Item on |
|----------------------------------------|----------------------------|--------|--------------------------|--------|-----------------------|
|                                   | 2014                       |   | 2013                     |   | 2014                  |   | 2013 |   | Consolidated Statements of Income |
|                                   | (in thousands)             |   |                     |
| Available-for-sale securities          |                            |   |                          |   |                       |   |  |   |          |
| Realized losses on sales of securities |                       | $      | (7                       | )      |                  | $ | (21 | ) |   | $ | (7 | ) |   | $ | (21 | ) | Loss on sale of available-for-sale securities, net |
| Tax benefit                            |                       |   | (2                       | )      |                  |   | (7 | ) |   |   | (2 | ) |   |   | (7 | ) | Income tax benefit |
|                                   |                       | $      | (5                       | )      |                  | $ | (14 | ) |   | $ | (5 | ) |   | $ | (14 | ) | Net of tax |

----

|                           |   | Unrealized Gains (Losses) on Securities |   |   | Unrealized Losses on Securities Transferred to Held-to-Maturity |   |   | Defined Benefit Pension Plans |   |   | Accumulated Other Comprehensive Loss |   |
|--------------------------------|--------|-----------------------------------------|--------|--------|-----------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|--------------------------------------|--------|
|                           |   | (in thousands)                          |   |
|                           |   |                                         |   |   |                                                                 |   |   |                               |   |   |                                      |   |
| Six Months Ended June 30, 2014 |   |                                         |   |   |                                                                 |   |   |                               |   |   |                                      |   |
|                           |   |                                         |   |   |                                                                 |   |   |                               |   |   |                                      |   |
| Balance at beginning of period |   | $                                       | (5,317 | )      |                                                            | $      | (3,937 | )                             |   | $      | (1,548                               | )      |   | $ | (10,802 | ) |
| Net change for the period      |   |                                    | 3,484  |   |                                                            |   | 259    |                          |   |   | 0                                    |   |   |   | 3,743 |   |
| Balance at end of period       |   | $                                       | (1,833 | )      |                                                            | $      | (3,678 | )                             |   | $      | (1,548                               | )      |   | $ | (7,059 | ) |
|                           |   |                                    |   |   |                                                            |   |   |                          |   |   |                                 |   |   |   |   |   |
|                           |   |                                    |   |   |                                                            |   |   |                          |   |   |                                 |   |   |   |   |   |
| Six Months Ended June 30, 2013 |   |                                    |   |   |                                                            |   |   |                          |   |   |                                 |   |   |   |   |   |
|                           |   |                                    |   |   |                                                            |   |   |                          |   |   |                                 |   |   |   |   |   |
| Balance at beginning of period |   | $                                       | 1,992  |   |                                                            | $      | 0      |                          |   | $      | (2,184                               | )      |   | $ | (192 | ) |
| Net change for the period      |   |                                    | (8,223 | )      |                                                            |   | 0      |                          |   |   | 0                                    |   |   |   | (8,223 | ) |
| Balance at end of period       |   | $                                       | (6,231 | )      |                                                            | $      | 0      |                          |   | $      | (2,184                               | )      |   | $ | (8,415 | ) |

|                                                             |   | Six Months Ended June 30, 2014 |   |
|------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                             |   | Pretax                         |   |   | Tax Expense (Benefit) |   |   | Net-of-Tax |   |
|                                                             |   | (in thousands)                 |   |
| Unrealized gains on available-for-sale securities                |   |                                |   |   |  |   |   |  |   |
| Unrealized holding gains arising during the period               |   | $                              | 5,271  |   |   | $ | 1,792 |   |   | $ | 3,479 |   |
| Less reclassification adjustment for losses recognized in income |   |                           | (7     | ) |   |   | (2 | ) |   |   | (5 | ) |
| Net unrealized gains on securities                               |   |                           | 5,278  |   |   |   | 1,794 |   |   |   | 3,484 |   |
|                                                             |   |                           |   |   |   |   |   |   |   |   |   |   |
| Market adjustment on securities transferred to held-to-maturity  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Amortization                                                     |   |                           | 392    |   |   |   | 133 |   |   |   | 259 |   |
|                                                             |   |                           |   |   |   |   |   |   |   |   |   |   |
| Total change in accumulated other comprehensive loss             |   | $                              | 5,670  |   |   | $ | 1,927 |   |   | $ | 3,743 |   |

|                                                             | Six Months Ended June 30, 2013 |   |
|------------------------------------------------------------------|--------------------------------|--------|
|                                                             | Pretax                         |   | Tax Expense(Benefit) |   | Net-of-Tax |   |
|                                                             | (in thousands)                 |   |
| Unrealized losses on available-for-sale securities               |                                |   |  |   |  |   |
| Unrealized holding losses arising during the period              |                           | $      | (12,480 | ) |   | $ | (4,243 | ) |   | $ | (8,237 | ) |
| Less reclassification adjustment for losses recognized in income |                           |   | (21 | ) |   |   | (7 | ) |   |   | (14 | ) |
| Net unrealized losses on securities                              |                           |   | (12,459 | ) |   |   | (4,236 | ) |   |   | (8,223 | ) |
|                                                             |                           |   |   |   |   |   |   |   |   |   |   |   |
| Total change in accumulated other comprehensive loss             |                           | $      | (12,459 | ) |   | $ | (4,236 | ) |   | $ | (8,223 | ) |

----

----

----

| Level 1 – | Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 2 – | Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 3 – | Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                            |         |   | Fair Value Measurements at June 30, 2014 Using             |   |
|-------------------------------------------------|---------|--------|------------------------------------------------------------|--------|
|                                            |         |   | (in thousands)                                             |   |
| Description                                     | Balance |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |   |
| Available-for-sale securities                   |         |   |                                                            |   |  |   |  |   |
| Obligations of  U.S. Government agencies   |    | $      | 14,931                                                     |   |   | $ | 0 |   |   | $ | 14,931 |   |   | $ | 0 |   |
| Obligations of state and political subdivisions |    |   | 49,495                                                     |   |   |   | 0 |   |   |   | 49,495 |   |   |   | 0 |   |
| Mortgage-backed securities                      |    |   | 76,625                                                     |   |   |   | 0 |   |   |   | 76,625 |   |   |   | 0 |   |
| Money market investments                        |    |   | 614                                                        |   |   |   | 0 |   |   |   | 614 |   |   |   | 0 |   |
| Corporate bonds                                 |    |   | 2,291                                                      |   |   |   | 0 |   |   |   | 2,291 |   |   |   | 0 |   |
| Other marketable equity securities              |    |   | 84                                                         |   |   |   | 0 |   |   |   | 84 |   |   |   | 0 |   |
| Total available-for-sale securities             |    | $      | 144,040                                                    |   |   | $ | 0 |   |   | $ | 144,040 |   |   | $ | 0 |   |

|                                            |         |   | Fair Value Measurements at December 31, 2013 Using         |   |
|-------------------------------------------------|---------|--------|------------------------------------------------------------|--------|
|                                            |         |   | (in thousands)                                             |   |
| Description                                     | Balance |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |   |
| Available-for-sale securities                   |         |   |                                                            |   |  |   |  |   |
| Obligations of  U.S. Government agencies   |    | $      | 15,024                                                     |   |   | $ | 0 |   |   | $ | 15,024 |   |   | $ | 0 |   |
| Obligations of state and political subdivisions |    |   | 47,100                                                     |   |   |   | 0 |   |   |   | 47,100 |   |   |   | 0 |   |
| Mortgage-backed securities                      |    |   | 90,750                                                     |   |   |   | 0 |   |   |   | 90,750 |   |   |   | 0 |   |
| Money market investments                        |    |   | 691                                                        |   |   |   | 0 |   |   |   | 691 |   |   |   | 0 |   |
| Corporate bonds                                 |    |   | 2,074                                                      |   |   |   | 0 |   |   |   | 2,074 |   |   |   | 0 |   |
| Total available-for-sale securities             |    | $      | 155,639                                                    |   |   | $ | 0 |   |   | $ | 155,639 |   |   | $ | 0 |   |

----

----

|                           |   |            |   |   | Carrying Value at June 30, 2014 Using                      |   |
|--------------------------------|--------|------------|--------|--------|------------------------------------------------------------|--------|
|                           |   |            |   |   | (in thousands)                                             |   |
|                           |   | Fair Value |   |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Impaired loans                 |   |            |   |   |                                                            |   |   |  |   |   |  |   |
| Mortgage loans on real estate: |   |            |   |   |                                                            |   |   |  |   |   |  |   |
| Residential 1-4 family         |   | $          | 744    |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 744 |   |
| Construction                   |   |       | 2,561  |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 2,561 |   |
| Second mortgages               |   |       | 37     |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 37 |   |
| Total                          |   | $          | 3,342  |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 3,342 |   |
|                           |   |       |   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned        |   |       |   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Residential 1-4 family         |   | $          | 1,261  |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 1,261 |   |
| Commercial                     |   |       | 1,735  |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 1,735 |   |
| Construction                   |   |       | 2,670  |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 2,670 |   |
| Total                          |   | $          | 5,666  |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 5,666 |   |

|                           |   |            |   |   | Carrying Value at December 31, 2013 Using                  |   |
|--------------------------------|--------|------------|--------|--------|------------------------------------------------------------|--------|
|                           |   |            |   |   | (in thousands)                                             |   |
|                           |   | Fair Value |   |   | Quoted Prices inActive Markets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Impaired loans                 |   |            |   |   |                                                            |   |   |  |   |   |  |   |
| Mortgage loans on real estate: |   |            |   |   |                                                            |   |   |  |   |   |  |   |
| Residential 1-4 family         |   | $          | 2,455  |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 2,455 |   |
| Commercial                     |   |       | 800    |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 800 |   |
| Second mortgages               |   |       | 44     |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 44 |   |
| Total                          |   | $          | 3,299  |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 3,299 |   |
|                           |   |       |   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned        |   |       |   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Residential 1-4 family         |   | $          | 457    |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 457 |   |
| Commercial                     |   |       | 2,290  |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 2,290 |   |
| Construction                   |   |       | 2,783  |   |                                                       |   | 0 |   |   |   | 0 |   |   |   | 2,783 |   |
| Total                          |   | $          | 5,530  |   |                                                       | $      | 0 |   |   | $ | 0 |   |   | $ | 5,530 |   |

----

|                               |   |                                                    |   | Quantitative Information About Level 3 Fair Value Measurements |                 |
|------------------------------------|--------|----------------------------------------------------|--------|----------------------------------------------------------------|----------------------|
| Description                        |   | Fair Value at June 30, 2014 (dollars in thousands) |   | Valuation Techniques                                           | Unobservable Input   |   | Range (Average) |   |
| Impaired loans                     |   |                                                    |   |                                                           |                 |   |  |   |
| Residential 1-4 family real estate |   | $                                                  | 744    |                                                           | Market comparables   | Selling costs |   |   | 0.00% - 7.25% (1.81 | %) |
|                               |   |                                               |   |                                                           |       | Liquidation discount |   |   | 0.00% - 10.00% (3.75 | %) |
| Construction                       |   | $                                                  | 2,561  |                                                           | Market comparables   | Selling costs |   |   | 0.00% - 11.25% (3.75 | %) |
| Second mortgages                   |   | $                                                  | 37     |                                                           | Market comparables   | Selling costs |   |   | 0.00 | % |
|                               |   |                                               |   |                                                           |                 |   |   |   |   |   |
| Other real estate owned            |   |                                               |   |                                                           |                 |   |   |   |   |   |
| Residential 1-4 family             |   | $                                                  | 1,261  |                                                           | Market comparables   | Selling costs |   |   | 6.00% - 10.00% (6.00 | %) |
| Commercial                         |   | $                                                  | 1,735  |                                                           | Market comparables   | Selling costs |   |   | 6.00% - 10.00% (6.00 | %) |
| Construction                       |   | $                                                  | 2,670  |                                                           | Market comparables   | Selling costs |   |   | 6.00% - 10.00% (6.00 | %) |

|                               |   |                                                        |   | Quantitative Information About Level 3 Fair Value Measurements |               |
|------------------------------------|--------|--------------------------------------------------------|--------|----------------------------------------------------------------|--------------------|
| Description                        |   | Fair Value at December 31, 2013 (dollars in thousands) |   | Valuation Techniques                                           | Unobservable Input |   | Range (Average) |   |
| Impaired loans                     |   |                                                        |   |                                                           |               |   |  |   |
| Residential 1-4 family real estate |   | $                                                      | 2,455  |                                                           | Market comparables | Selling costs |   |   | 3.00% - 7.25% (6.39 | %) |
|                               |   |                                                   |   |                                                           |     | Liquidation discount |   |   | 0.00% - 90.00% (15.56 | %) |
| Commercial real estate             |   | $                                                      | 800    |                                                           | Market comparables | Selling costs |   |   | 7.25 | % |
| Second mortgages                   |   | $                                                      | 44     |                                                           | Market comparables | Selling costs |   |   | 7.25 | % |
|                               |   |                                                   |   |                                                           |               |   |   |   |   |   |
| Other real estate owned            |   |                                                   |   |                                                           |               |   |   |   |   |   |
| Residential 1-4 family             |   | $                                                      | 457    |                                                           | Market comparables | Selling costs |   |   | 6.00% - 10.00% (6.00 | %) |
| Commercial                         |   | $                                                      | 2,290  |                                                           | Market comparables | Selling costs |   |   | 6.00% - 10.00% (6.00 | %) |
| Construction                       |   | $                                                      | 2,783  |                                                           | Market comparables | Selling costs |   |   | 6.00% - 10.00% (6.00 | %) |

----

----

----

|                                     |   |                |    |   | Fair Value Measurements at June 30, 2014 Using (in thousands) |   |
|------------------------------------------|--------|----------------|---------|--------|---------------------------------------------------------------|--------|
|                                     |   | Carrying Value |    |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets                                   |   |                |    |   |                                                               |   |   |  |   |   |  |   |
| Cash and cash equivalents                |   | $              | 22,533  |   |                                                          | $      | 22,533 |   |   | $ | 0 |   |   | $ | 0 |   |
| Securities available-for-sale            |   |           | 144,040 |   |                                                          |   | 0 |   |   |   | 144,040 |   |   |   | 0 |   |
| Securities held-to-maturity              |   |           | 93,990  |   |                                                          |   | 0 |   |   |   | 97,091 |   |   |   | 0 |   |
| Restricted securities                    |   |           | 2,293   |   |                                                          |   | 0 |   |   |   | 2,293 |   |   |   | 0 |   |
| Loans, net of allowances for loan losses |   |           | 512,686 |   |                                                          |   | 0 |   |   |   | 0 |   |   |   | 512,268 |   |
| Bank owned life insurance                |   |           | 23,107  |   |                                                          |   | 0 |   |   |   | 23,107 |   |   |   | 0 |   |
| Accrued interest receivable              |   |           | 2,768   |   |                                                          |   | 0 |   |   |   | 2,768 |   |   |   | 0 |   |
|                                     |   |           |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                              |   |           |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                 |   | $              | 716,528 |   |                                                          | $      | 0 |   |   | $ | 717,631 |   |   | $ | 0 |   |
| Overnight repurchase agreements          |   |           | 25,677  |   |                                                          |   | 0 |   |   |   | 25,677 |   |   |   | 0 |   |
| Term repurchase agreements               |   |           | 412     |   |                                                          |   | 0 |   |   |   | 411 |   |   |   | 0 |   |
| Federal Home Loan Bank advances          |   |           | 30,000  |   |                                                          |   | 0 |   |   |   | 32,092 |   |   |   | 0 |   |
| Accrued interest payable                 |   |           | 266     |   |                                                          |   | 0 |   |   |   | 266 |   |   |   | 0 |   |

|                                     |   |               |    |   | Fair Value Measurements at December 31, 2013 Using(in thousands) |   |
|------------------------------------------|--------|---------------|---------|--------|------------------------------------------------------------------|--------|
|                                     |   | CarryingValue |    |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1)       |   |   | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Assets                                   |   |               |    |   |                                                                  |   |   |  |   |   |  |   |
| Cash and cash equivalents                |   | $             | 31,325  |   |                                                             | $      | 31,325 |   |   | $ | 0 |   |   | $ | 0 |   |
| Securities available-for-sale            |   |          | 155,639 |   |                                                             |   | 0 |   |   |   | 155,639 |   |   |   | 0 |   |
| Securities held-to-maturity              |   |          | 96,847  |   |                                                             |   | 0 |   |   |   | 97,453 |   |   |   | 0 |   |
| Restricted securities                    |   |          | 2,378   |   |                                                             |   | 0 |   |   |   | 2,378 |   |   |   | 0 |   |
| Loans, net of allowances for loan losses |   |          | 493,868 |   |                                                             |   | 0 |   |   |   | 0 |   |   |   | 494,714 |   |
| Bank owned life insurance                |   |          | 22,673  |   |                                                             |   | 0 |   |   |   | 22,673 |   |   |   | 0 |   |
| Accrued interest receivable              |   |          | 2,754   |   |                                                             |   | 0 |   |   |   | 2,754 |   |   |   | 0 |   |
|                                     |   |          |    |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                              |   |          |    |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                 |   | $             | 725,405 |   |                                                             | $      | 0 |   |   | $ | 728,011 |   |   | $ | 0 |   |
| Overnight repurchase agreements          |   |          | 31,175  |   |                                                             |   | 0 |   |   |   | 31,175 |   |   |   | 0 |   |
| Term repurchase agreements               |   |          | 411     |   |                                                             |   | 0 |   |   |   | 410 |   |   |   | 0 |   |
| Federal Home Loan Bank advances          |   |          | 25,000  |   |                                                             |   | 0 |   |   |   | 27,567 |   |   |   | 0 |   |
| Accrued interest payable                 |   |          | 327     |   |                                                             |   | 0 |   |   |   | 327 |   |   |   | 0 |   |

----

|                             |   | Three Months Ended June 30, 2014 |    |
|----------------------------------|--------|----------------------------------|---------|
|                             |   | Bank                             |    |   | Trust |   |   | UnconsolidatedParent |   |   | Eliminations |   |   | Consolidated |   |
| Revenues                         |   |                                  |    |   |  |   |   |  |   |   |  |   |   |  |   |
| Interest and dividend income     |   | $                                | 7,523   |   |   | $ | 13 |   |   | $ | 1,100 |   |   | $ | (1,100 | ) |   | $ | 7,536 |   |
| Income from fiduciary activities |   |                             | 0       |   |   |   | 793 |   |   |   | 0 |   |   |   | 0 |   |   |   | 793 |   |
| Other income                     |   |                             | 2,126   |   |   |   | 250 |   |   |   | 50 |   |   |   | (66 | ) |   |   | 2,360 |   |
| Total operating income           |   |                             | 9,649   |   |   |   | 1,056 |   |   |   | 1,150 |   |   |   | (1,166 | ) |   |   | 10,689 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                         |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                 |   |                             | 962     |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 962 |   |
| Provision for loan losses        |   |                             | 100     |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 100 |   |
| Salaries and employee benefits   |   |                             | 4,192   |   |   |   | 680 |   |   |   | 109 |   |   |   | 0 |   |   |   | 4,981 |   |
| Other expenses                   |   |                             | 3,347   |   |   |   | 265 |   |   |   | (60 | ) |   |   | (66 | ) |   |   | 3,486 |   |
| Total operating expenses         |   |                             | 8,601   |   |   |   | 945 |   |   |   | 49 |   |   |   | (66 | ) |   |   | 9,529 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before taxes              |   |                             | 1,048   |   |   |   | 111 |   |   |   | 1,101 |   |   |   | (1,100 | ) |   |   | 1,160 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)     |   |                             | 20      |   |   |   | 39 |   |   |   | 0 |   |   |   | 0 |   |   |   | 59 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                       |   | $                                | 1,028   |   |   | $ | 72 |   |   | $ | 1,101 |   |   | $ | (1,100 | ) |   | $ | 1,101 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                     |   | $                                | 855,989 |   |   | $ | 5,740 |   |   | $ | 85,989 |   |   | $ | (86,817 | ) |   | $ | 860,901 |   |

|                             |   | Three Months Ended June 30, 2013 |    |
|----------------------------------|--------|----------------------------------|---------|
|                             |   | Bank                             |    |   | Trust |   |   | UnconsolidatedParent |   |   | Eliminations |   |   | Consolidated |   |
| Revenues                         |   |                                  |    |   |  |   |   |  |   |   |  |   |   |  |   |
| Interest and dividend income     |   | $                                | 7,467   |   |   | $ | 10 |   |   | $ | 1,095 |   |   | $ | (1,096 | ) |   | $ | 7,476 |   |
| Income from fiduciary activities |   |                             | 0       |   |   |   | 866 |   |   |   | 0 |   |   |   | 0 |   |   |   | 866 |   |
| Other income                     |   |                             | 2,300   |   |   |   | 134 |   |   |   | 50 |   |   |   | (65 | ) |   |   | 2,419 |   |
| Total operating income           |   |                             | 9,767   |   |   |   | 1,010 |   |   |   | 1,145 |   |   |   | (1,161 | ) |   |   | 10,761 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                         |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                 |   |                             | 1,177   |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 1,177 |   |
| Provision for loan losses        |   |                             | 300     |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 300 |   |
| Salaries and employee benefits   |   |                             | 4,144   |   |   |   | 553 |   |   |   | 108 |   |   |   | 0 |   |   |   | 4,805 |   |
| Other expenses                   |   |                             | 3,021   |   |   |   | 226 |   |   |   | 64 |   |   |   | (66 | ) |   |   | 3,245 |   |
| Total operating expenses         |   |                             | 8,642   |   |   |   | 779 |   |   |   | 172 |   |   |   | (66 | ) |   |   | 9,527 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before taxes              |   |                             | 1,125   |   |   |   | 231 |   |   |   | 973 |   |   |   | (1,095 | ) |   |   | 1,234 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)     |   |                             | 182     |   |   |   | 79 |   |   |   | (42 | ) |   |   | 0 |   |   |   | 219 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                       |   | $                                | 943     |   |   | $ | 152 |   |   | $ | 1,015 |   |   | $ | (1,095 | ) |   | $ | 1,015 |   |
|                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                     |   | $                                | 862,066 |   |   | $ | 5,502 |   |   | $ | 82,500 |   |   | $ | (83,187 | ) |   | $ | 866,881 |   |

----

|                             |   | Six Months Ended June 30, 2014 |    |
|----------------------------------|--------|--------------------------------|---------|
|                             |   | Bank                           |    |   | Trust |   |   | UnconsolidatedParent |   |   | Eliminations |   |   | Consolidated |   |
| Revenues                         |   |                                |    |   |  |   |   |  |   |   |  |   |   |  |   |
| Interest and dividend income     |   | $                              | 14,977  |   |   | $ | 25 |   |   | $ | 2,152 |   |   | $ | (2,152 | ) |   | $ | 15,002 |   |
| Income from fiduciary activities |   |                           | 0       |   |   |   | 1,748 |   |   |   | 0 |   |   |   | 0 |   |   |   | 1,748 |   |
| Other income                     |   |                           | 4,112   |   |   |   | 486 |   |   |   | 100 |   |   |   | (131 | ) |   |   | 4,567 |   |
| Total operating income           |   |                           | 19,089  |   |   |   | 2,259 |   |   |   | 2,252 |   |   |   | (2,283 | ) |   |   | 21,317 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                         |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                 |   |                           | 1,993   |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 1,993 |   |
| Provision for loan losses        |   |                           | 350     |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 350 |   |
| Salaries and employee benefits   |   |                           | 8,290   |   |   |   | 1,325 |   |   |   | 219 |   |   |   | 0 |   |   |   | 9,834 |   |
| Other expenses                   |   |                           | 6,512   |   |   |   | 522 |   |   |   | (7 | ) |   |   | (131 | ) |   |   | 6,896 |   |
| Total operating expenses         |   |                           | 17,145  |   |   |   | 1,847 |   |   |   | 212 |   |   |   | (131 | ) |   |   | 19,073 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before taxes              |   |                           | 1,944   |   |   |   | 412 |   |   |   | 2,040 |   |   |   | (2,152 | ) |   |   | 2,244 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)     |   |                           | 63      |   |   |   | 141 |   |   |   | (38 | ) |   |   | 0 |   |   |   | 166 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                       |   | $                              | 1,881   |   |   | $ | 271 |   |   | $ | 2,078 |   |   | $ | (2,152 | ) |   | $ | 2,078 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                     |   | $                              | 855,989 |   |   | $ | 5,740 |   |   | $ | 85,989 |   |   | $ | (86,817 | ) |   | $ | 860,901 |   |

|                             |   | Six Months Ended June 30, 2013 |    |
|----------------------------------|--------|--------------------------------|---------|
|                             |   | Bank                           |    |   | Trust |   |   | UnconsolidatedParent |   |   | Eliminations |   |   | Consolidated |   |
| Revenues                         |   |                                |    |   |  |   |   |  |   |   |  |   |   |  |   |
| Interest and dividend income     |   | $                              | 15,087  |   |   | $ | 19 |   |   | $ | 2,057 |   |   | $ | (2,058 | ) |   | $ | 15,105 |   |
| Income from fiduciary activities |   |                           | 0       |   |   |   | 1,766 |   |   |   | 0 |   |   |   | 0 |   |   |   | 1,766 |   |
| Other income                     |   |                           | 4,418   |   |   |   | 245 |   |   |   | 100 |   |   |   | (131 | ) |   |   | 4,632 |   |
| Total operating income           |   |                           | 19,505  |   |   |   | 2,030 |   |   |   | 2,157 |   |   |   | (2,189 | ) |   |   | 21,503 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                         |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                 |   |                           | 2,433   |   |   |   | 0 |   |   |   | 0 |   |   |   | (1 | ) |   |   | 2,432 |   |
| Provision for loan losses        |   |                           | 500     |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 500 |   |
| Salaries and employee benefits   |   |                           | 8,438   |   |   |   | 1,069 |   |   |   | 219 |   |   |   | 0 |   |   |   | 9,726 |   |
| Other expenses                   |   |                           | 6,142   |   |   |   | 444 |   |   |   | 94 |   |   |   | (131 | ) |   |   | 6,549 |   |
| Total operating expenses         |   |                           | 17,513  |   |   |   | 1,513 |   |   |   | 313 |   |   |   | (132 | ) |   |   | 19,207 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before taxes              |   |                           | 1,992   |   |   |   | 517 |   |   |   | 1,844 |   |   |   | (2,057 | ) |   |   | 2,296 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)     |   |                           | 277     |   |   |   | 175 |   |   |   | (72 | ) |   |   | 0 |   |   |   | 380 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                       |   | $                              | 1,715   |   |   | $ | 342 |   |   | $ | 1,916 |   |   | $ | (2,057 | ) |   | $ | 1,916 |   |
|                             |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                     |   | $                              | 862,066 |   |   | $ | 5,502 |   |   | $ | 82,500 |   |   | $ | (83,187 | ) |   | $ | 866,881 |   |

----

----

----

----

| AVERAGE BALANCE SHEETS, NET INTEREST INCOME* AND RATES*    |   |
|------------------------------------------------------------|--------|
|                                                       |   | For the three months ended June 30, |   |
|                                                       |   | 2014 |   |   | 2013 |   |
|                                                       |   |  |   |   | Interest |   |   |  |   |   |  |   |   | Interest |   |   |  |   |
|                                                       |   | Average |   |   | Income/ |   |   | Yield/ |   |   | Average |   |   | Income/ |   |   | Yield/ |   |
|                                                       |   | Balance |   |   | Expense |   |   | Rate** |   |   | Balance |   |   | Expense |   |   | Rate** |   |
|                                                       |   |  |   |   |  |   |   | (dollars in thousands) |   |   |  |   |   |  |   |   |  |   |
| ASSETS                                                     |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Loans*                                                     |   | $ | 512,702 |   |   | $ | 6,130 |   |   |   | 4.78 | % |   | $ | 462,256 |   |   | $ | 5,899 |   |   |   | 5.10 | % |
| Investment securities:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                    |   |   | 178,479 |   |   |   | 962 |   |   |   | 2.16 | % |   |   | 265,181 |   |   |   | 1,253 |   |   |   | 1.89 | % |
| Tax-exempt*                                                |   |   | 74,258 |   |   |   | 645 |   |   |   | 3.47 | % |   |   | 45,720 |   |   |   | 435 |   |   |   | 3.81 | % |
| Total investment securities                                |   |   | 252,737 |   |   |   | 1,607 |   |   |   | 2.54 | % |   |   | 310,901 |   |   |   | 1,688 |   |   |   | 2.17 | % |
| Interest-bearing due from banks                            |   |   | 1,119 |   |   |   | 0 |   |   |   | 0.00 | % |   |   | 28,995 |   |   |   | 19 |   |   |   | 0.26 | % |
| Federal funds sold                                         |   |   | 1,296 |   |   |   | 0 |   |   |   | 0.00 | % |   |   | 1,784 |   |   |   | 1 |   |   |   | 0.22 | % |
| Other investments                                          |   |   | 2,977 |   |   |   | 26 |   |   |   | 3.49 | % |   |   | 3,411 |   |   |   | 26 |   |   |   | 3.05 | % |
| Total earning assets                                       |   |   | 770,831 |   |   | $ | 7,763 |   |   |   | 4.03 | % |   |   | 807,347 |   |   | $ | 7,633 |   |   |   | 3.78 | % |
| Allowance for loan losses                                  |   |   | (6,935 | ) |   |   |   |   |   |   |   |   |   |   | (7,417 | ) |   |   |   |   |   |   |   |   |
| Other nonearning assets                                    |   |   | 102,709 |   |   |   |   |   |   |   |   |   |   |   | 85,479 |   |   |   |   |   |   |   |   |   |
| Total assets                                               |   | $ | 866,605 |   |   |   |   |   |   |   |   |   |   | $ | 885,409 |   |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Time and savings deposits:                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing transaction accounts                      |   | $ | 12,270 |   |   | $ | 2 |   |   |   | 0.07 | % |   | $ | 11,700 |   |   | $ | 1 |   |   |   | 0.03 | % |
| Money market deposit accounts                              |   |   | 213,141 |   |   |   | 41 |   |   |   | 0.08 | % |   |   | 194,811 |   |   |   | 53 |   |   |   | 0.11 | % |
| Savings accounts                                           |   |   | 71,788 |   |   |   | 9 |   |   |   | 0.05 | % |   |   | 61,731 |   |   |   | 15 |   |   |   | 0.10 | % |
| Time deposits, $100,000 or more                            |   |   | 108,862 |   |   |   | 274 |   |   |   | 1.01 | % |   |   | 128,465 |   |   |   | 369 |   |   |   | 1.15 | % |
| Other time deposits                                        |   |   | 130,023 |   |   |   | 321 |   |   |   | 0.99 | % |   |   | 160,595 |   |   |   | 427 |   |   |   | 1.06 | % |
| Total time and savings deposits                            |   |   | 536,084 |   |   |   | 647 |   |   |   | 0.48 | % |   |   | 557,302 |   |   |   | 865 |   |   |   | 0.62 | % |
| Federal funds purchased, repurchase                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| agreements and other borrowings                            |   |   | 31,036 |   |   |   | 8 |   |   |   | 0.10 | % |   |   | 30,860 |   |   |   | 7 |   |   |   | 0.09 | % |
| Federal Home Loan Bank advances                            |   |   | 28,956 |   |   |   | 307 |   |   |   | 4.24 | % |   |   | 25,000 |   |   |   | 305 |   |   |   | 4.88 | % |
| Total interest-bearing liabilities                         |   |   | 596,076 |   |   |   | 962 |   |   |   | 0.65 | % |   |   | 613,162 |   |   |   | 1,177 |   |   |   | 0.77 | % |
| Demand deposits                                            |   |   | 183,227 |   |   |   |   |   |   |   |   |   |   |   | 180,838 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                          |   |   | 2,437 |   |   |   |   |   |   |   |   |   |   |   | 3,095 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                       |   |   | 84,865 |   |   |   |   |   |   |   |   |   |   |   | 88,314 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                 |   | $ | 866,605 |   |   |   |   |   |   |   |   |   |   | $ | 885,409 |   |   |   |   |   |   |   |   |   |
| Net interest margin                                        |   |   |   |   |   | $ | 6,801 |   |   |   | 3.53 | % |   |   |   |   |   | $ | 6,456 |   |   |   | 3.20 | % |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Computed on a fully tax-equivalent basis using a 34% rate |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Annualized                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                       |   | For the six months ended June 30, |    |
|------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                       |   | 2014                              |    |   | 2013 |   |
|                                                       |   |                                   |    |   | Interest |   |   |  |   |   |  |   |   | Interest |   |   |  |   |
|                                                       |   | Average                           |    |   | Income/ |   |   | Yield/ |   |   | Average |   |   | Income/ |   |   | Yield/ |   |
|                                                       |   | Balance                           |    |   | Expense |   |   | Rate** |   |   | Balance |   |   | Expense |   |   | Rate** |   |
|                                                       |   |                                   |    |   |  |   |   | (dollars in thousands) |   |   |  |   |   |  |   |   |  |   |
| ASSETS                                                     |   |                                   |    |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Loans*                                                     |   | $                                 | 506,997 |   |   | $ | 12,130 |   |   |   | 4.79 | % |   | $ | 462,759 |   |   | $ | 11,916 |   |   |   | 5.15 | % |
| Investment securities:                                     |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                    |   |                              | 181,255 |   |   |   | 1,967 |   |   |   | 2.17 | % |   |   | 275,152 |   |   |   | 2,577 |   |   |   | 1.87 | % |
| Tax-exempt*                                                |   |                              | 74,440  |   |   |   | 1,295 |   |   |   | 3.48 | % |   |   | 42,919 |   |   |   | 836 |   |   |   | 3.90 | % |
| Total investment securities                                |   |                              | 255,695 |   |   |   | 3,262 |   |   |   | 2.55 | % |   |   | 318,071 |   |   |   | 3,413 |   |   |   | 2.15 | % |
| Interest-bearing due from banks                            |   |                              | 2,859   |   |   |   | 3 |   |   |   | 0.21 | % |   |   | 26,467 |   |   |   | 33 |   |   |   | 0.25 | % |
| Federal funds sold                                         |   |                              | 5,283   |   |   |   | 5 |   |   |   | 0.19 | % |   |   | 1,857 |   |   |   | 1 |   |   |   | 0.11 | % |
| Other investments                                          |   |                              | 3,022   |   |   |   | 57 |   |   |   | 3.77 | % |   |   | 3,492 |   |   |   | 44 |   |   |   | 2.52 | % |
| Total earning assets                                       |   |                              | 773,856 |   |   | $ | 15,457 |   |   |   | 3.99 | % |   |   | 812,646 |   |   | $ | 15,407 |   |   |   | 3.79 | % |
| Allowance for loan losses                                  |   |                              | (6,966  | ) |   |   |   |   |   |   |   |   |   |   | (7,414 | ) |   |   |   |   |   |   |   |   |
| Other nonearning assets                                    |   |                              | 101,324 |   |   |   |   |   |   |   |   |   |   |   | 84,136 |   |   |   |   |   |   |   |   |   |
| Total assets                                               |   | $                                 | 868,214 |   |   |   |   |   |   |   |   |   |   | $ | 889,368 |   |   |   |   |   |   |   |   |   |
|                                                       |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                       |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Time and savings deposits:                                 |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing transaction accounts                      |   | $                                 | 12,053  |   |   | $ | 3 |   |   |   | 0.05 | % |   | $ | 11,370 |   |   | $ | 3 |   |   |   | 0.05 | % |
| Money market deposit accounts                              |   |                              | 211,931 |   |   |   | 95 |   |   |   | 0.09 | % |   |   | 194,956 |   |   |   | 124 |   |   |   | 0.13 | % |
| Savings accounts                                           |   |                              | 69,760  |   |   |   | 25 |   |   |   | 0.07 | % |   |   | 59,885 |   |   |   | 29 |   |   |   | 0.10 | % |
| Time deposits, $100,000 or more                            |   |                              | 110,802 |   |   |   | 595 |   |   |   | 1.07 | % |   |   | 131,712 |   |   |   | 765 |   |   |   | 1.16 | % |
| Other time deposits                                        |   |                              | 134,044 |   |   |   | 649 |   |   |   | 0.97 | % |   |   | 164,847 |   |   |   | 885 |   |   |   | 1.07 | % |
| Total time and savings deposits                            |   |                              | 538,590 |   |   |   | 1,367 |   |   |   | 0.51 | % |   |   | 562,770 |   |   |   | 1,806 |   |   |   | 0.64 | % |
| Federal funds purchased, repurchase                        |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| agreements and other borrowings                            |   |                              | 33,806  |   |   |   | 17 |   |   |   | 0.10 | % |   |   | 31,628 |   |   |   | 19 |   |   |   | 0.12 | % |
| Federal Home Loan Bank advances                            |   |                              | 26,989  |   |   |   | 609 |   |   |   | 4.51 | % |   |   | 25,000 |   |   |   | 607 |   |   |   | 4.86 | % |
| Total interest-bearing liabilities                         |   |                              | 599,385 |   |   |   | 1,993 |   |   |   | 0.67 | % |   |   | 619,398 |   |   |   | 2,432 |   |   |   | 0.79 | % |
| Demand deposits                                            |   |                              | 183,048 |   |   |   |   |   |   |   |   |   |   |   | 178,556 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                          |   |                              | 2,297   |   |   |   |   |   |   |   |   |   |   |   | 2,993 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                       |   |                              | 83,484  |   |   |   |   |   |   |   |   |   |   |   | 88,421 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                 |   | $                                 | 868,214 |   |   |   |   |   |   |   |   |   |   | $ | 889,368 |   |   |   |   |   |   |   |   |   |
| Net interest margin                                        |   |                              |    |   |   | $ | 13,464 |   |   |   | 3.48 | % |   |   |   |   |   | $ | 12,975 |   |   |   | 3.19 | % |
|                                                       |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Computed on a fully tax-equivalent basis using a 34% rate |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Annualized                                               |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

| NONPERFORMING ASSETS                                                                                                                                     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                     |   | June 30, |   |   | December 31, |   |   | Increase |   |
|                                                                                                                                                     |   | 2014 |   |   | 2013 |   |   | (Decrease) |   |
|                                                                                                                                                     |   | (in thousands) |   |
| Nonaccrual loans                                                                                                                                         |   |  |   |   |  |   |   |  |   |
| Commercial                                                                                                                                               |   | $ | 0 |   |   | $ | 149 |   |   | $ | (149 | ) |
| Real estate-construction                                                                                                                                 |   |   | 2,382 |   |   |   | 2,545 |   |   |   | (163 | ) |
| Real estate-mortgage (1)                                                                                                                                 |   |   | 8,159 |   |   |   | 8,630 |   |   |   | (471 | ) |
| Consumer loans                                                                                                                                           |   |   | 44 |   |   |   | 0 |   |   |   | 44 |   |
| Total nonaccrual loans                                                                                                                                   |   | $ | 10,585 |   |   | $ | 11,324 |   |   | $ | (739 | ) |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans past due 90 days or more and accruing interest                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                                                                               |   | $ | 10 |   |   | $ | 0 |   |   | $ | 10 |   |
| Real estate-construction                                                                                                                                 |   |   | 67 |   |   |   | 0 |   |   |   | 67 |   |
| Real estate-mortgage (1)                                                                                                                                 |   |   | 53 |   |   |   | 527 |   |   |   | (474 | ) |
| Consumer loans                                                                                                                                           |   |   | 861 |   |   |   | 5 |   |   |   | 856 |   |
| Other                                                                                                                                                    |   |   | 5 |   |   |   | 14 |   |   |   | (9 | ) |
| Total loans past due 90 days or more and accruing interest                                                                                               |   | $ | 996 |   |   | $ | 546 |   |   | $ | 450 |   |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Restructured loans                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate-construction                                                                                                                                 |   |   | 103 |   |   |   | 0 |   |   |   | 103 |   |
| Real estate-mortgage (1)                                                                                                                                 |   | $ | 12,328 |   |   | $ | 12,076 |   |   | $ | 252 |   |
| Consumer loans                                                                                                                                           |   |   | 14 |   |   |   | 15 |   |   |   | (1 | ) |
| Total restructured loans                                                                                                                            |   | $ | 12,445 |   |   | $ | 12,091 |   |   | $ | 354 |   |
| Less nonaccrual restructured loans (included above)                                                                                                      |   |   | 3,628 |   |   |   | 3,630 |   |   |   | (2 | ) |
| Less restructured loans currently in compliance (2)                                                                                                      |   |   | 8,817 |   |   |   | 8,461 |   |   |   | 356 |   |
|       Net nonperforming, accruing restructured loans                                                                            |   | $ | 0 |   |   | $ | 0 |   |   | $ | 0 |   |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land development, and other land                                                                                                           |   | $ | 2,670 |   |   |   | 2,783 |   |   | $ | (113 | ) |
| 1-4 family residential properties                                                                                                                        |   |   | 1,259 |   |   |   | 457 |   |   |   | 802 |   |
| Nonfarm nonresidential properties                                                                                                                        |   |   | 1,734 |   |   |   | 2,289 |   |   |   | (555 | ) |
| Former branch sites                                                                                                                                      |   |   | 886 |   |   |   | 886 |   |   |   | - |   |
|                                                                                                                                                     |   | $ | 6,549 |   |   | $ | 6,415 |   |   | $ | 134 |   |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total nonperforming assets                                                                                                                               |   | $ | 18,130 |   |   | $ | 18,285 |   |   | $ | (155 | ) |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) The real estate-mortgage segment includes residential 1 – 4 family, commercial real estate, second mortgages and equity lines of credit.       |   |
| (2) As of June 30, 2014 and December 31, 2013, all of the Company's restructured accruing loans were performing in compliance with their modified terms. |   |

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| Loans Secured by 1 - 4 Family First Mortgages,                  |   |
|-----------------------------------------------------------------|--------|
| 1 - 4 Family Open-end and 1 - 4 Family Junior Liens             |   |
| As of June 30, 2014                                             |   |
| (dollars in thousands)                                          |   |
|                                                            |   |  |   |   |  |   |
|                                                            |   | Amount |   |   | Percent |   |
| Subprime                                                        |   | $ | 20,366 |   |   |   | 17.14 | % |
| Non-subprime                                                    |   |   | 98,477 |   |   |   | 82.86 | % |
|                                                            |   | $ | 118,843 |   |   |   | 100.00 | % |
|                                                            |   |   |   |   |   |   |   |   |
| Total loans                                                     |   | $ | 519,662 |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
| Percentage of Real Estate-Secured Subprime Loans to Total Loans |   |   |   |   |   |
|                                                            |   | 3.92 | % |

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|            | 2014       |          |
|-----------------|------------|---------------|
|            | Regulatory | June 30, 2014 |
|            | Minimums   |          |
| Tier 1 Leverage | 4.00%      | 10.69%        |
| Tier 1          | 4.00%      | 14.27%        |
| Total Capital   | 8.00%      | 15.34%        |

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| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1         |   | Articles of Incorporation of Old Point Financial Corporation, as amended effective June 22, 2000 (incorporated by reference to Exhibit 3.1 to Form 10-K filed March 12, 2009)                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.2         |   | Bylaws of Old Point Financial Corporation, as amended and restated March 8, 2011 (incorporated by reference to Exhibit 3.2 to Form 8-K filed March 10, 2011)                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.1        |   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.2        |   | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 32.1        |   | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101         |   | The following materials from Old Point Financial Corporation's quarterly report on Form 10-Q for the quarter ended June 30, 2014, formatted in XBRL (Extensible Business Reporting Language), filed herewith: (i) Consolidated Balance Sheets (unaudited for June 30, 2014), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited), (iv) Consolidated Statements of Changes in Stockholders' Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited) |

|            |   | OLD POINT FINANCIAL CORPORATION                             |
|-----------------|--------|-------------------------------------------------------------|
|            |   |                                                        |   |
| August 12, 2014 |   | /s/Robert F. Shuford, Sr.                                   |   |
|            |   | Robert F. Shuford, Sr.                                      |   |
|            |   | Chairman, President & Chief Executive Officer           |   |
|            |   | (Principal Executive Officer)                               |   |
|            |   |                                                        |   |
| August 12, 2014 |   | /s/Laurie D. Grabow                                         |   |
|            |   | Laurie D. Grabow                                            |   |
|            |   | Chief Financial Officer & Senior Vice President/Finance |   |
|            |   | (Principal Financial & Accounting Officer)              |   |