##### 



EXHIBIT 13
 SOUTHEAST BANK & TRUST
AND SUBSIDIARY
 CONSOLIDATED FINANCIAL REPORT
 DECEMBER 31, 2006




---



##### 



PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    1FINANCIAL STATEMENTSConsolidated balance sheets
    
    2Consolidated statements of operations
    
    3Consolidated statements of changes in stockholders equity
    
    4Consolidated statements of cash flows
    
    5Notes to consolidated financial statements
    
    6-28




---



##### 



Report of Independent Registered Public Accounting Firm




---



##### 



2006
    
    
    2005ASSETSCash and due from banks
    
    $
    4,311,361
    
    
    $
    3,756,539Federal funds sold
    
    
    4,395,839
    
    
    
    4,570,803Total cash and cash equivalents
    
    
    8,707,200
    
    
    
    8,327,342Securities available for sale
    
    
    17,374,584
    
    
    
    13,646,524Restricted investments
    
    
    808,383
    
    
    
    762,435Loans, net of allowance for loan losses of
$1,644,634 in 2006 and $1,361,567 in 2005
    
    
    144,364,908
    
    
    
    113,834,146Premises and equipment
    
    
    7,569,344
    
    
    
    6,100,026Accrued interest receivable
    
    
    907,644
    
    
    
    644,456Intangible assets
    
    
    946,231
    
    
    
    Cash surrender value of life insurance
    
    
    761,952
    
    
    
    399,614Other assets
    
    
    796,917
    
    
    
    466,495Total assets
    
    $
    182,237,163
    
    
    $
    144,181,038LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest-bearing demand deposits
    
    $
    13,726,850
    
    
    $
    9,010,161Interest-bearing demand deposits
    
    
    20,920,560
    
    
    
    18,558,591Savings and money market accounts
    
    
    32,470,373
    
    
    
    34,982,187Time deposits
    
    
    97,378,299
    
    
    
    63,304,322Total deposits
    
    
    164,496,082
    
    
    
    125,855,261Accrued interest payable
    
    
    576,241
    
    
    
    288,860Federal Home Loan Bank advances
    
    
    3,000,000
    
    
    
    5,700,000Accrued expenses and other liabilities
    
    
    354,930
    
    
    
    289,189Total liabilities
    
    
    168,427,253
    
    
    
    132,133,310Stockholders equity:Common stock, $1.00 par value; 4,000,000 shares
authorized; shares outstanding of 1,284,379
    
    
    1,284,379
    
    
    
    1,284,379Surplus
    
    
    12,224,118
    
    
    
    12,176,118Undivided profits (deficit)
    
    
    336,722
    
    
    
    (1,157,278
    )Accumulated other comprehensive income
    
    
    (35,309
    )
    
    
    (255,491
    )Total stockholders equity
    
    
    13,809,910
    
    
    
    12,047,728Total
liabilities and stockholders equity
    
    $
    182,237,163
    
    
    $
    144,181,038
  -2-




---



##### 



2006
    
    
    2005INTEREST INCOMELoans, including fees
    
    $
    10,203,647
    
    
    $
    7,372,114Securities
    
    
    656,792
    
    
    
    420,563Federal funds sold and other
    
    
    273,959
    
    
    
    181,053Total interest income
    
    
    11,134,398
    
    
    
    7,973,730INTEREST EXPENSEDeposits
    
    
    4,680,331
    
    
    
    2,888,743Federal funds borrowed
    
    
    13,216
    
    
    
    Federal Home Loan Bank advances
    
    
    185,199
    
    
    
    202,271Total interest expense
    
    
    4,878,746
    
    
    
    3,091,014Net interest income
    
    
    6,255,652
    
    
    
    4,882,716Provision for loan losses
    
    
    460,000
    
    
    
    511,175Net interest income after provision for loan losses
    
    
    5,795,652
    
    
    
    4,371,541NONINTEREST INCOMECustomer service fees
    
    
    1,387,184
    
    
    
    1,201,658Loss on sale of premises and equipment
    
    
    
    
    
    
    (17,647
    )Other noninterest income
    
    
    221,223
    
    
    
    152,7271,608,407
    
    
    
    1,336,738NONINTEREST EXPENSESSalaries and employee benefits
    
    
    2,870,927
    
    
    
    2,275,350Occupancy and equipment
    
    
    813,773
    
    
    
    685,703Data processing
    
    
    334,393
    
    
    
    231,966Other operating expenses
    
    
    1,666,966
    
    
    
    1,169,7755,686,059
    
    
    
    4,362,794Net income before income taxes
    
    
    1,718,000
    
    
    
    1,345,485Provision for income taxes
    
    
    224,000
    
    
    
    Net income
    
    $
    1,494,000
    
    
    $
    1,345,485EARNINGS PER COMMON SHAREBasic
    
    $
    1.16
    
    
    $
    1.07Diluted
    
    
    1.12
    
    
    
    1.03
  -3-




---



##### 



AccumulatedTotal
    
    
    
    
    
    
    
    
    
    
    Undivided
    
    
    OtherComprehensive
    
    
    Stockholders
    
    
    Common
    
    
    
    
    
    
    Profits
    
    
    ComprehensiveIncome
    
    
    Equity
    
    
    Stock
    
    
    Surplus
    
    
    (Deficit)
    
    
    IncomeBALANCE, December 31, 2004
    
    
    
    
    
    $
    9,870,689
    
    
    $
    1,181,728
    
    
    $
    11,252,259
    
    
    $
    (2,502,763
    )
    
    $
    (60,535
    )Issuance of common stock
    
    
    
    
    
    
    1,026,510
    
    
    
    102,651
    
    
    
    923,859
    
    
    
    
    
    
    
    Comprehensive income:Net income
    
    $
    1,345,485
    
    
    
    1,345,485
    
    
    
    
    
    
    
    
    
    
    
    1,345,485
    
    
    
    Other comprehensive income, net of tax:Unrealized holding gains (losses) on
securities available for sale
    
    
    (194,956
    )
    
    
    (194,956
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (194,956
    )Total comprehensive income
    
    $
    1,150,529BALANCE, December 31, 2005
    
    
    
    
    
    
    12,047,728
    
    
    
    1,284,379
    
    
    
    12,176,118
    
    
    
    (1,157,278
    )
    
    
    (255,491
    )Comprehensive income:Net income
    
    $
    1,494,000
    
    
    
    1,494,000
    
    
    
    
    
    
    
    
    
    
    
    1,494,000
    
    
    
    Other comprehensive income, net of tax:Unrealized holding gains (losses) on
securities available for sale
    
    
    220,182
    
    
    
    220,182
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    220,182Total comprehensive income
    
    $
    1,714,182Stock-based compensation, net of tax benefits
    
    
    
    
    
    
    48,000
    
    
    
    
    
    
    
    48,000
    
    
    
    
    
    
    
    BALANCE, December 31, 2006
    
    
    
    
    
    $
    13,809,910
    
    
    $
    1,284,379
    
    
    $
    12,224,118
    
    
    $
    336,722
    
    
    $
    (35,309
    )
  -4-




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##### 



2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    1,494,000
    
    
    $
    1,345,485Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    462,229
    
    
    
    399,739Provision for loan losses
    
    
    460,000
    
    
    
    511,175Stock based compensation
    
    
    48,000
    
    
    
    Deferred income taxes
    
    
    (295,900
    )
    
    
    Loss (gain) on sale of premise and equipment
    
    
    (71
    )
    
    
    17,647Change in operating assets and liabilities:Accrued interest receivable
    
    
    (263,188
    )
    
    
    (221,781
    )Accrued interest payable
    
    
    287,381
    
    
    
    95,395Other assets and liabilities
    
    
    7,466
    
    
    
    (13,078
    )Net cash provided by operating activities
    
    
    2,199,917
    
    
    
    2,134,582CASH FLOWS FROM INVESTING ACTIVITIESLoan originations and principal collections, net
    
    
    (24,170,515
    )
    
    
    (22,067,346
    )Proceeds from sales, maturities, calls and prepayments of
securities available for sale
    
    
    4,534,574
    
    
    
    1,916,571Purchase of securities available for sale
    
    
    (8,043,586
    )
    
    
    (4,477,257
    )Purchase of restricted investments
    
    
    (20,100
    )
    
    
    (74,451
    )Proceeds from sale of other real estate
    
    
    161,808
    
    
    
    299,730Purchase of other real estate
    
    
    
    
    
    
    (43,956
    )Proceeds from branch acquisition
    
    
    11,604,474
    
    
    
    Purchase of life insurance
    
    
    (360,273
    )
    
    
    (396,000
    )Proceeds from sale of premises and equipment
    
    
    331,032
    
    
    
    Purchase of premises and equipment
    
    
    (929,170
    )
    
    
    (634,730
    )Net cash used in investing activities
    
    
    (16,891,756
    )
    
    
    (25,477,439
    )CASH FLOWS FROM FINANCING ACTIVITIESNet increase in deposits
    
    
    17,771,697
    
    
    
    24,945,796Proceeds from Federal Home Loan Bank advances, net
    
    
    (2,700,000
    )
    
    
    (1,500,000
    )Proceeds from issuance of common stock
    
    
    
    
    
    
    1,026,510Net cash provided by financing activities
    
    
    15,071,697
    
    
    
    24,472,306NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    379,858
    
    
    
    1,129,449CASH AND CASH EQUIVALENTS, beginning of year
    
    
    8,327,342
    
    
    
    7,197,893CASH AND CASH EQUIVALENTS, end of year
    
    $
    8,707,200
    
    
    $
    8,327,342SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATIONCash paid during the year for:Interest
    
    $
    4,615,558
    
    
    $
    2,995,619Income taxes
    
    
    349,150
    
    
    
    Branch acquisition :Loans
    
    $
    (7,023,119
    )
    
    $
    Premise and equipment
    
    
    (1,307,167
    )
    
    
    Deposits
    
    
    20,869,124
    
    
    
    Deposit premium
    
    
    (970,495
    )
    
    
    Other assets and liabilities
    
    
    36,131
    
    
    
    Cash received from acquisition
    
    $
    11,604,474
    
    
    $
    NONCASH INVESTING ACTIVITIESProperty acquired in settlement of loans
    
    $
    202,872
    
    
    $
    318,148
  -5-




---



##### 



Note 1.
    
    Summary of Significant Accounting Policies
          -6-




---



##### 



Note 1.
    
    Summary of Significant Accounting Policies (continued)
          -7-




---



##### 



Note 1.
    
    Summary of Significant Accounting Policies (continued)
      -8-




---



##### 



Note 1.
    
    Summary of Significant Accounting Policies (continued)
          -9-




---



##### 



Note 1.
    
    Summary of Significant Accounting Policies (continued)
         -10-




---



##### 



Note 1.
    
    Summary of Significant Accounting Policies (continued)
     Note 2.
    
    Securities
  2006Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueSecurities of U.S.
Government agencies
    
    $
    9,037,784
    
    
    $
    6,855
    
    
    $
    (72,665
    )
    
    $
    8,971,974Mortgage-backed securities
    
    
    7,236,430
    
    
    
    48,153
    
    
    
    (54,638
    )
    
    
    7,229,945State and municipal
securities
    
    
    1,159,178
    
    
    
    15,639
    
    
    
    (2,152
    )
    
    
    1,172,665$
    17,433,392
    
    
    $
    70,647
    
    
    $
    (129,455
    )
    
    $
    17,374,584
 -11-




---



##### 



Note 2.
    
    Securities (continued)
 2005Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueSecurities of U.S.
Government agencies
    
    $
    10,834,824
    
    
    $
    
    
    
    $
    (188,839
    )
    
    $
    10,645,985Mortgage-backed securities
    
    
    3,028,168
    
    
    
    
    
    
    
    (70,860
    )
    
    
    2,957,308State and municipal
securities
    
    
    39,023
    
    
    
    4,208
    
    
    
    
    
    
    
    43,231$
    13,902,015
    
    
    $
    4,208
    
    
    $
    (259,699
    )
    
    $
    13,646,524
   Amortized
    
    
    MarketCost
    
    
    ValueDue in one year or less
    
    $
    4,549,981
    
    
    $
    4,510,429Due from one to five years
    
    
    4,487,802
    
    
    
    4,461,545Due from five to ten years
    
    
    1,112,683
    
    
    
    1,100,209Due after ten years
    
    
    7,282,926
    
    
    
    7,302,401$
    17,433,392
    
    
    $
    17,374,584
   -12-




---



##### 



Note 3.
    
    Restricted Investments
  Note 4.
    
    Loans and Allowance for Loan Losses
  2006
    
    
    2005(in thousands)Real estate loans:Residential 1-4 family
    
    $
    58,489
    
    
    $
    47,224Commercial
    
    
    34,754
    
    
    
    25,905Construction
    
    
    12,836
    
    
    
    7,058Other
    
    
    5,424
    
    
    
    4,671Total mortgage loans on real estate
    
    
    111,503
    
    
    
    84,858Commercial and industrial loans
    
    
    18,302
    
    
    
    15,977Consumer loans
    
    
    13,078
    
    
    
    11,817Other
    
    
    3,157
    
    
    
    2,568Total loans
    
    
    146,040
    
    
    
    115,220Less  Allowance for loan losses
    
    
    (1,645
    )
    
    
    (1,362
    )Less  Deferred loan fees
    
    
    (30
    )
    
    
    (24
    )Net loans
    
    $
    144,365
    
    
    $
    113,834
  2006
    
    
    2005Balance, beginning of year
    
    $
    1,361,567
    
    
    $
    1,172,129Provision charged to operating expense
    
    
    460,000
    
    
    
    511,175Recoveries of loans charged off
    
    
    66,963
    
    
    
    37,206Loans charged off
    
    
    (243,896
    )
    
    
    (358,943
    )Balance, end of year
    
    $
    1,644,634
    
    
    $
    1,361,567
 -13-




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##### 



Note 4.
    
    Loans and Allowance for Loan Losses (continued)
    Note 5.
    
    Premises and Equipment
  2006
    
    
    2005Land
    
    $
    2,055,002
    
    
    $
    1,877,570Buildings and improvements
    
    
    4,770,462
    
    
    
    3,439,157Furniture, fixtures and equipment
    
    
    2,110,479
    
    
    
    1,719,365Vehicles
    
    
    23,928
    
    
    
    23,9288,959,871
    
    
    
    7,060,020Accumulated depreciation
    
    
    (1,390,527
    )
    
    
    (959,994
    )$
    7,569,344
    
    
    $
    6,100,026
  Note 6.
    
    Time Deposits
  Less than one year
    
    $
    86,7451 through 3 years
    
    
    8,0683 through 5 years
    
    
    2,565$
    97,378
 -14-




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##### 



Note 7.
    
    Federal Home Loan Bank Advances
   2006
    
    
    2005Long-term advance dated May 19, 2004,
requiring monthly interest payments, fixed
at 4.66%, principal due in May 2009
    
    $
    1,000,000
    
    
    $
    1,000,000Long-term advance dated August 5, 2004,
requiring monthly interest payments, fixed
at 2.92%, principal due in February 2006
    
    
    
    
    
    
    2,000,000Long-term advance dated August 5, 2004,
requiring monthly interest payments, fixed
at 3.30%, principal due in November 2006
    
    
    
    
    
    
    700,000Long-term advance dated July 21, 2005,
requiring monthly interest payments, fixed
at 4.62%, principal due in July 2010
    
    
    2,000,000
    
    
    
    2,000,000$
    3,000,000
    
    
    $
    5,700,000
  2009
    
    $
    1,000,0002010
    
    
    2,000,000$
    3,000,000
 Note 8.
    
    Stock Option Plan and Stock Warrants
   -15-




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##### 



Note 8.
    
    Stock Option Plan and Stock Warrants (continued)
    Net income, as reported
    
    $
    1,345,485Effect of stock-based employee compensation
expense determined under fair value method
for all awards, net of related tax effects
    
    
    (19,483
    )Pro forma net income
    
    $
    1,326,002Earnings per share:Basic  as reported
    
    $
    1.07Basic  pro forma
    
    $
    1.05Diluted  as reported
    
    $
    1.03Diluted  pro forma
    
    $
    1.01
 -16-




---



##### 



Note 8.
    
    Stock Option Plan and Stock Warrants (continued)
  2006
    
    2005Dividend yield
    
    
    2.5
    %
    
    
    Expected life
    
    10
    years
    
    10
    yearsExpected volatility
    
    
    9.7
    %
    
    
    10.0
    %Risk-free interest rate
    
    
    5.0
    %
    
    
    4.5
    %
   2006
    
    2005Number
    
    Weighted Average
    
    Number
    
    Weighted Averageof Shares
    
    Exercise Price
    
    of Shares
    
    Exercise PriceOutstanding at beginning of year
    
    
    155,000
    
    
    $
    10.07
    
    
    
    151,500
    
    
    $
    10.00Options granted
    
    
    14,500
    
    
    
    17.00
    
    
    
    3,500
    
    
    
    13.00Options exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at end of year
    
    
    169,500
    
    
    $
    10.66
    
    
    
    155,000
    
    
    $
    10.07
   -17-




---



##### 



Note 8.
    
    Stock Option Plan and Stock Warrants (continued)
  Options Outstanding
    
    Options ExercisableWeighted
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    Average
    
    
    
    
    
    AverageExercise
    
    Number
    
    Remaining
    
    Exercise
    
    Number
    
    ExercisePrice
    
    Outstanding
    
    Life
    
    Price
    
    Exercisable
    
    Price$  10.00
    
    
    151,500
    
    
    5.3 Years
    
    $
    10.00
    
    
    
    151,500
    
    
    $
    10.0013.00
    
    
    3,500
    
    
    8.4 Years
    
    
    13.00
    
    
    
    3,500
    
    
    
    13.0017.00
    
    
    14,500
    
    
    9.4 Years
    
    
    17.00
    
    
    
    14,500
    
    
    
    17.00Outstanding at end of year
    
    
    169,500
    
    
    5.7 Years
    
    
    10.66
    
    
    
    169,500
    
    
    
    10.66
  Note 9.
    
    Income Taxes
  2006
    
    
    2005Current tax expense:Federal
    
    $
    415,200
    
    
    $
    State
    
    
    104,700
    
    
    
    Deferred tax expense (benefit) related to:Net operating loss carryforward
    
    
    248,700
    
    
    
    557,000Amortization of start-up costs
    
    
    54,300
    
    
    
    54,300Provision for loan losses
    
    
    (104,800
    )
    
    
    (108,600
    )Depreciation
    
    
    (12,800
    )
    
    
    (600
    )Other
    
    
    (36,700
    )
    
    
    (1,600
    )Change in deferred tax asset valuation allowance
    
    
    (444,600
    )
    
    
    (500,500
    )Total income tax expense
    
    $
    224,000
    
    
    $
    
 -18-




---



##### 



Note 9.
    
    Income Taxes (continued)
  2006
    
    
    2005Federal income tax computed at the statutory rate
    
    $
    584,000
    
    
    $
    457,000State income taxes, net of federal tax benefit
    
    
    73,700
    
    
    
    57,800Change in deferred tax asset valuation allowance
    
    
    (444,600
    )
    
    
    (500,500
    )Other
    
    
    10,900
    
    
    
    (14,300
    )Total income tax expense
    
    $
    224,000
    
    
    $
    
  2006
    
    
    2005Deferred tax assets:Net operating loss carryforward
    
    $
    
    
    
    $
    248,700Amortization of start-up costs
    
    
    18,100
    
    
    
    72,300Provision for loan losses
    
    
    521,400
    
    
    
    416,500Other
    
    
    32,600
    
    
    
    16,500572,100
    
    
    
    754,000Valuation allowance
    
    
    
    
    
    
    (444,600
    )$
    572,100
    
    
    $
    309,400Deferred tax liabilities:Depreciation
    
    $
    255,300
    
    
    $
    268,100Other
    
    
    59,300
    
    
    
    41,300$
    314,600
    
    
    $
    309,400
 -19-




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##### 



Note 10.
    
    Financial Instruments With Off-Balance-Sheet Risk
      -20-




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##### 



Note 11.
    
    Regulatory Matters
     Minimum to be WellCapitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAt December 31, 2006:Total capital
(to risk-weighted assets)
    
    $
    14,415
    
    
    
    10.23
    %
    
    $
    11,275
    
    
    
    8.00
    %
    
    $
    14,093
    
    
    
    10.00
    %Tier I capital

(to risk-weighted assets)
    
    
    12,770
    
    
    
    9.06
    %
    
    
    5,637
    
    
    
    4.00
    %
    
    
    8,456
    
    
    
    6.00
    %Tier I capital

(to average assets)
    
    
    12,770
    
    
    
    7.09
    %
    
    
    7,209
    
    
    
    4.00
    %
    
    
    9,012
    
    
    
    5.00
    %
 -21-




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##### 



Note 11.
    
    Regulatory Matters (continued)
 Minimum to be WellCapitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    

Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAt December 31, 2005:Total capital

(to risk-weighted assets)
    
    $
    13,623
    
    
    
    12.45
    %
    
    $
    8,755
    
    
    
    8.00
    %
    
    $
    10,944
    
    
    
    10.00
    %Tier I capital

(to risk-weighted assets)
    
    
    12,262
    
    
    
    11.20
    %
    
    
    4,378
    
    
    
    4.00
    %
    
    
    6,567
    
    
    
    6.00
    %Tier I capital

(to average assets)
    
    
    12,262
    
    
    
    8.77
    %
    
    
    5,594
    
    
    
    4.00
    %
    
    
    6,993
    
    
    
    5.00
    %
 Note 12.
    
    Other Comprehensive Income
  TaxBefore-Tax
    
    
    (Expense)
    
    
    Net-of-TaxAmount
    
    
    Benefit
    
    
    AmountYear ended December 31, 2006:Unrealized holding gains and losses
arising during the period
    
    $
    366,095
    
    
    $
    (140,178
    )
    
    $
    225,917Less reclassification adjustment for
gains realized in net income
    
    
    9,294
    
    
    
    (3,559
    )
    
    
    5,735$
    356,801
    
    
    $
    (136,319
    )
    
    $
    220,182Year ended December 31, 2005:Unrealized holding gains and losses
arising during the period
    
    $
    (315,923
    )
    
    $
    120,967
    
    
    $
    (194,956
    )Less reclassification adjustment for
gains realized in net income
    
    
    
    
    
    
    
    
    
    
    $
    (315,923
    )
    
    $
    120,967
    
    
    $
    (194,956
    )
 -22-




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##### 



Note 13.
    
    Earnings Per Common Share
    2006
    
    
    2005Net income
    
    $
    1,494,000
    
    
    $
    1,345,485Average number of common shares outstanding
    
    
    1,284,379
    
    
    
    1,257,856Effect of dilutive stock options and warrants
    
    
    48,426
    
    
    
    50,967Average number of common shares outstanding used
to calculate diluted earnings per common share
    
    
    1,332,805
    
    
    
    1,308,823
 Note 14.
    
    Fair Value of Financial Instruments
     -23-




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##### 



Note 14.
    
    Fair Value of Financial Instruments (continued)
               -24-




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##### 



Note 14.
    
    Fair Value of Financial Instruments (continued)
  2006
    
    2005Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair ValueAssets:Cash and due from banks
    
    $
    4,311
    
    
    $
    4,311
    
    
    $
    3,757
    
    
    $
    3,757Federal funds sold
    
    
    4,396
    
    
    
    4,396
    
    
    
    4,571
    
    
    
    4,571Securities
    
    
    17,375
    
    
    
    17,375
    
    
    
    13,647
    
    
    
    13,647Restricted investments
    
    
    808
    
    
    
    808
    
    
    
    762
    
    
    
    762Net loans
    
    
    144,365
    
    
    
    144,041
    
    
    
    113,834
    
    
    
    112,918Cash surrender value of life insurance
    
    
    762
    
    
    
    762
    
    
    
    400
    
    
    
    400Liabilities:Noninterest-bearing demand deposits
    
    
    13,727
    
    
    
    13,727
    
    
    
    9,010
    
    
    
    9,010Interest-bearing demand deposits
    
    
    20,921
    
    
    
    20,921
    
    
    
    18,559
    
    
    
    18,559Savings deposits and money market
accounts
    
    
    32,470
    
    
    
    34,470
    
    
    
    34,982
    
    
    
    34,982Time deposits
    
    
    97,378
    
    
    
    97,231
    
    
    
    63,304
    
    
    
    62,755Federal Home Loan Bank advances
    
    
    3,000
    
    
    
    3,000
    
    
    
    5,700
    
    
    
    5,700Unrecognized financial instruments
(net of contract amount):Commitments to extend credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Letters of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lines of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Note 15.
    
    Related Party Transactions
  Balances outstanding, December 31, 2005
    
    $
    3,029,600New loans
    
    
    2,515,900Repayments
    
    
    (1,920,500
    )Balances outstanding, December 31, 2006
    
    $
    3,625,000
  -25-




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##### 



Note 16.
    
    Employee Benefit Plan
  Note 17.
    
    Acquisition
   Note 18.
    
    Recent Accounting Pronouncements
  -26-




---



##### 



Note 18.
    
    Recent Accounting Pronouncements (continued)
    -27-




---



##### 



Note 19.
    
    Share Exchange
  -28-