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

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

|                                                          |                                 |
|---------------------------------------------------------------|--------------------------------------|
| Kentucky                                                      | 61-1142247                           |
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. Employer Identification No.) |

| 2500 Eastpoint Parkway, Louisville, Kentucky | 40223      |
|----------------------------------------------|------------|
| (Address of principal executive offices)     | (Zip Code) |

|                       |                                      |
|----------------------------|-------------------------------------------|
| Title of each class        | Name of each exchange on which registered |
| Common Stock, no par value | NASDAQ Global Market                      |

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|          |                                                                                                               | Page No. |
|---------------|--------------------------------------------------------------------------------------------------------------------|----------|
| PART I   |                                                                                                               | 1        |   |
| Item 1.  | Business                                                                                                           | 1        |   |
| Item 1A. | Risk Factors                                                                                                       | 11       |   |
| Item 1B. | Unresolved Staff Comments                                                                                          | 20       |   |
| Item 2.  | Properties                                                                                                         | 21       |   |
| Item 3.  | Legal Proceedings                                                                                                  | 21       |   |
| Item 4.  | (Removed and Reserved)                                                                                             | 21       |   |
|          |                                                                                                               |     |   |
| PART II  |                                                                                                               | 22       |   |
| Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 22       |   |
| Item 6.  | Selected Financial Data                                                                                            | 24       |   |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operation                         | 25       |   |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                                                         | 51       |   |
| Item 8.  | Financial Statements and Supplementary Data                                                                        | 53       |   |
| Item 9.  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                               | 91       |   |
| Item 9A. | Controls and Procedures                                                                                            | 91       |   |
| Item 9B. | Other Information                                                                                                  | 91       |   |
|          |                                                                                                               |     |   |
| PART III |                                                                                                               | 91       |   |
| Item 10. | Directors, Executive Officers and Corporate Governance                                                             | 91       |   |
| Item 11. | Executive Compensation                                                                                             | 91       |   |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 91       |   |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence                                          | 91       |   |
| Item 14. | Principal Accounting Fees and Services                                                                             | 91       |   |
|          |                                                                                                               |     |   |
| PART IV  |                                                                                                               | 92       |   |
| Item 15. | Exhibits and Financial Statement Schedules                                                                         | 92       |   |
|          |                                                                                                               |     |   |
|          | Signatures                                                                                                         | 93       |   |
|          |                                                                                                               |     |   |
|          | Index to Exhibits                                                                                                  | 94       |   |

----

PART I

Item 1.     Business

----

|   | § | Louisville/Jefferson, Bullitt and Henry Counties: Our headquarters are in Louisville, the largest city in Kentucky and the twenty-ninth largest city in the United States. The Louisville metropolitan area includes the consolidated Louisville/Jefferson County and 12 surrounding Kentucky and Southern Indiana counties with an estimated 1.3 million residents in 2009. We also have banking offices in Bullitt County, south of Louisville, and Henry County, east of Louisville. Our six banking offices in these counties also serve the contiguous counties of Spencer, Shelby and Oldham to the east and northeast of Louisville. The area’s employers are diversified across many industries and include the air hub for United Parcel Service (“UPS”), two Ford assembly plants, General Electric’s Consumer and Industrial division, Humana, Norton Healthcare, Brown-Forman and YUM! Brands. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Lexington/Fayette County: Lexington, located in Fayette County, is the second largest city in Kentucky with an estimated countywide population of over 296,000 in 2009. Lexington is the financial, educational, retail, healthcare and cultural hub for Central and Eastern Kentucky. It is known worldwide for its Bluegrass horse farms and Keeneland Race Track, and proudly boasts of itself as “The Horse Capital of the World.”  It is also the home of the University of Kentucky and Transylvania University. The area’s employers include Toyota, Lexmark, IBM Global Services and Valvoline. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Owensboro/Daviess County: Owensboro, located on the banks of the Ohio River, is Kentucky’s third largest city. Daviess County had an estimated countywide population of approximately 95,000 in 2009. The city is called a festival city, with over 20 annual community celebrations that attract visitors from around the world, including its world famous Bar-B-Q Festival which attracts over 80,000 visitors giving Owensboro recognition as “The Bar-B-Q Capital of the World”. It is an industrial, medical, retail and cultural hub for Western Kentucky and the area employers include Owensboro Medical System, Texas Gas, US Bank Home Mortgage and Toyotetsu. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Southern Kentucky: This market includes Bowling Green, the fourth largest city in Kentucky, located about 60 miles north of Nashville, Tennessee.  Bowling Green, located in Warren County, is the home of Western Kentucky University and is the economic hub of an estimated countywide population of approximately 109,000 in 2009. This market also includes thriving communities in the contiguous Barren County, including the city of Glasgow.  Major employers in Barren and Warren Counties include GM’s Corvette plant and several other automotive facilities and R.R. Donnelley’s regional printing facility. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | South Central Kentucky: South of the Louisville metropolitan area, we have banking offices in Butler, Edmonson, Green, Hart, and Ohio Counties, which had a combined population of approximately 79,000 in 2009. This region includes stable community markets comprised primarily of agricultural and service-based businesses. Each of our banking offices in these markets has a stable customer base and core deposits that are less sensitive to market competition, which provide us a lower cost source of funds for our lending operations. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | requiring a capital restoration plan; |
|--------|---------|---------------------------------------|

|   | • | placing limits on asset growth and restriction on activities; |
|--------|---------|---------------------------------------------------------------|

|   | • | requiring the bank to issue additional voting or other capital stock or to be acquired; |
|--------|---------|-----------------------------------------------------------------------------------------|

|   | • | placing restrictions on transactions with affiliates; |
|--------|---------|-------------------------------------------------------|

|   | • | restricting the interest rate the bank may pay on deposits; |
|--------|---------|-------------------------------------------------------------|

|   | • | ordering a new election of the bank’s board of directors; |
|--------|---------|-----------------------------------------------------------------|

|   | • | requiring that certain senior executive officers or directors be dismissed; |
|--------|---------|-----------------------------------------------------------------------------|

|   | • | prohibiting the bank from accepting deposits from correspondent banks; |
|--------|---------|------------------------------------------------------------------------|

|   | • | requiring the bank to divest certain subsidiaries; |
|--------|---------|----------------------------------------------------|

|   | • | prohibiting the payment of principal or interest on subordinated debt; and |
|--------|---------|----------------------------------------------------------------------------|

|   | • | ultimately, appointing a receiver for the bank. |
|--------|---------|-------------------------------------------------|

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Item 1A.     Risk Factors

|   | · | A decrease in the demand for loans and other products and services offered by us; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | A decrease in the value of collateral securing our loans; |
|--------|--------|-----------------------------------------------------------|

|   | · | An impairment of certain intangible assets, such as goodwill; and |
|--------|--------|-------------------------------------------------------------------|

|   | · | An increase in the number of customers who become delinquent, file for protection under bankruptcy laws or default on their loans. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | a majority of its board of directors consists of “independent directors,” which the NASDAQ rules define as persons who are not either officers or employees of the company and have no relationships that, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out their responsibilities as directors; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | decisions regarding the compensation paid to executive officers are made either by a compensation committee composed entirely of independent directors or by a majority of the independent directors; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | nominations for election to the board of directors are made either by a nominating committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities or by a majority of the independent directors. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | attracting funding to support additional growth; |
|--------|--------|--------------------------------------------------|

|   | · | maintaining asset quality; |
|--------|--------|----------------------------|

|   | · | attracting and retaining qualified management; and |
|--------|--------|----------------------------------------------------|

|   | · | maintaining adequate regulatory capital. |
|--------|--------|------------------------------------------|

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|   | · | offer higher interest rates on deposits and lower interest rates on loans than we can; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | offer a broader range of services than we do; |
|--------|--------|-----------------------------------------------|

|   | · | maintain more branch locations than we do; and |
|--------|--------|------------------------------------------------|

|   | · | mount extensive promotional and advertising campaigns. |
|--------|--------|--------------------------------------------------------|

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|   | · | new requirements on banking, derivative and investment activities, including the repeal of the prohibition on the payment of interest on business demand accounts, debit card interchange fee requirements, and the “Volcker Rule,” which restricts the sponsorship, or the acquisition or retention of ownership interests, in private equity funds; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the creation of a new Consumer Financial Protection Bureau with supervisory authority, including the power to conduct examinations and take enforcement actions with respect to financial institutions with assets of $10 billion or more; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the creation of a Financial Stability Oversight Council with authority to identify institutions and practices that might pose a systemic risk; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provisions affecting corporate governance and executive compensation of all companies subject to the reporting requirements of the Securities and Exchange Act of 1934, as amended; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a provision that would broaden the base for FDIC insurance assessments; and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | a provision that would require bank regulators to set minimum capital levels for bank holding companies that are as strong as those required for their insured depository subsidiaries, subject to a grandfather clause for holding companies with less than $15 billion in assets as of December 31, 2009. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item 1B.  | Unresolved Staff Comments |
|---------------------|---------------------------|

----

| Item 2. | Properties |
|--------------|------------|

|                                                            |   |                |   |         |
|-----------------------------------------------------------------|--------|---------------------|--------|--------------|
| Markets                                                         |   | Square Footage |   | Owned/Leased |
| Louisville/Jefferson, Bullitt and Henry Counties                |   |                |   |         |
| Main Office: 2500 Eastpoint Parkway, Louisville                 |   |                | 30,000 |         |          Owned |
| Eminence Office: 645 Elm Street, Eminence                       |   |                | 1,500  |         |          Owned |
| Hillview Office: 11998 Preston Highway, Hillview                |   |                | 3,500  |         |          Owned |
| Pleasureville Office: 5440 Castle Highway, Pleasureville        |   |                | 10,000 |         |          Owned |
| Shepherdsville Office: 340 South Buckman Street, Shepherdsville |   |                | 10,000 |         |          Owned |
| Conestoga Office: 155 Conestoga Parkway, Shepherdsville         |   |                | 3,900  |         |          Owned |
|                                                            |   |                |   |         |   |
| Lexington/Fayette County                                        |   |                |   |         |   |
| Lexington Office: 2424 Harrodsburg Road, Suite 100, Lexington   |   |                | 8,500  |         |          Leased |
|                                                            |   |                |   |         |   |
| South Central Kentucky                                          |   |                |   |         |   |
| Brownsville Office: 113 East Main, Brownsville                  |   |                | 8,500  |         |          Owned |
| Greensburg Office: 202-04 North Main Street, Greensburg         |   |                | 11,000 |         |          Owned |
| Horse Cave Office: 210 East Main Street, Horse Cave             |   |                | 5,000  |         |          Owned |
| Morgantown Office: 112 West Logan Street, Morgantown            |   |                | 7,500  |         |          Owned |
| Munfordville Office: 949 South Dixie Highway, Munfordville      |   |                | 9,000  |         |          Owned |
| Northside Office: 1300 North Main Street, Beaver Dam            |   |                | 3,200  |         |          Owned |
| Wal-Mart Office: 1701 North Main Street, Beaver Dam             |   |                | 500    |         |          Leased |
|                                                            |   |                |   |         |   |
| Owensboro/Davies County                                         |   |                |   |         |   |
| Owensboro Office: 1819 Frederica Street, Owensboro              |   |                | 3,000  |         |          Owned |
|                                                            |   |                |   |         |   |
| Southern Kentucky                                               |   |                |   |         |   |
| Fairview Office: 1042 Fairview Avenue, Bowling Green            |   |                | 3,300  |         |          Leased |
| Campbell Lane Office: 751 Campbell Lane, Bowling Green          |   |                | 7,500  |         |          Owned |
| Glasgow Office: 1006 West Main Street, Glasgow                  |   |                | 12,000 |         |          Owned |
|                                                            |   |                |   |         |   |
| Other Properties                                                |   |                |   |         |   |
| Office Building: 701 Columbia Avenue, Glasgow                   |   |                | 19,000 |         |          Owned |
| Canmer Office: 2708 North Jackson Highway, Canmer               |   |                | 5,000  |         |          Owned |

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

| Item 4. | (Removed and Reserved) |
|--------------|------------------------|

----

PART II

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

|               |   | 2010              |   |
|--------------------|--------|-------------------|--------|
|               |   | Market Value |   |   |   |   |
| Quarter Ended |   | High              |   |   | Low |   |   | Dividend |   |
| Fourth Quarter     |   | $                 | 10.89  |   |   | $ | 9.94 |   |   | $ | 0.01 |   |
| Third Quarter      |   |              | 11.63  |   |   |   | 9.05 |   |   |   | 0.10 |   |
| Second Quarter     |   |              | 14.02  |   |   |   | 12.02 |   |   |   | 0.19 |   |
| First Quarter      |   |              | 14.30  |   |   |   | 10.21 |   |   |   | 0.19 |   |

|               |   | 2009              |   |
|--------------------|--------|-------------------|--------|
|               |   | Market Value |   |   |   |   |
| Quarter Ended |   | High              |   |   | Low |   |   | Dividend |   |
| Fourth Quarter     |   | $                 | 15.86  |   |   | $ | 12.96 |   |   | $ | 0.19 |   |
| Third Quarter      |   |              | 16.42  |   |   |   | 13.26 |   |   |   | 0.19 |   |
| Second Quarter     |   |              | 14.20  |   |   |   | 10.65 |   |   |   | 0.19 |   |
| First Quarter      |   |              | 14.39  |   |   |   | 8.85 |   |   |   | 0.19 |   |

|   *    | $100 invested on 9/22/06 in stock or 8/31/06 in index, including reinvestment of dividends.  Fiscal year ending December 31. |
|-----------------------|----------------------------------------------------------------------------------------------------------------------------------------|

----

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

|                                                       |   | As of and for the Years Ended December 31, |      |
|------------------------------------------------------------|--------|------------------------------------------------------|-----------|
| (Dollars in thousands except per share data)               |   | 2010                                                 |      |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Income Statement Data:                                     |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                            |   | $                                                    | 86,407    |   |   | $ | 94,466 |   |   | $ | 100,107 |   |   | $ | 91,800 |   |   | $ | 72,863 |   |
| Interest expense                                           |   |                                                 | 28,841    |   |   |   | 40,412 |   |   |   | 52,881 |   |   |   | 49,404 |   |   |   | 35,622 |   |
| Net interest income                                        |   |                                                 | 57,566    |   |   |   | 54,054 |   |   |   | 47,226 |   |   |   | 42,396 |   |   |   | 37,241 |   |
| Provision for loan losses                                  |   |                                                 | 30,100    |   |   |   | 14,200 |   |   |   | 5,400 |   |   |   | 4,025 |   |   |   | 1,405 |   |
| Non-interest income                                        |   |                                                 | 11,582    |   |   |   | 7,094 |   |   |   | 6,868 |   |   |   | 5,556 |   |   |   | 5,196 |   |
| Non-interest expense                                       |   |                                                 | 46,478    |   |   |   | 30,456 |   |   |   | 27,757 |   |   |   | 22,474 |   |   |   | 19,785 |   |
| Income (loss) before income taxes                          |   |                                                 | (7,430    | ) |   |   | 16,492 |   |   |   | 20,937 |   |   |   | 21,453 |   |   |   | 21,247 |   |
| Income tax expense (benefit)                               |   |                                                 | (3,046    | ) |   |   | 5,424 |   |   |   | 6,927 |   |   |   | 7,224 |   |   |   | 6,908 |   |
| Net income (loss)                                          |   |                                                 | (4,384    | ) |   |   | 11,068 |   |   |   | 14,010 |   |   |   | 14,229 |   |   |   | 14,339 |   |
| Less:                                                      |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Dividends on preferred stock                   |   |                                                 | 1,810     |   |   |   | 1,750 |   |   |   | 194 |   |   |   | — |   |   |   | — |   |
|   Accretion on Series A preferred stock          |   |                                                 | 177       |   |   |   | 176 |   |   |   | 20 |   |   |   | — |   |   |   | — |   |
|   Earnings allocated to participating securities |   |                                                 | (184      | ) |   |   | 97 |   |   |   | 94 |   |   |   | — |   |   |   | — |   |
| Net income (loss) available to common                      |   | $                                                    | (6,187    | ) |   | $ | 9,045 |   |   | $ | 13,702 |   |   | $ | 14,229 |   |   | $ | 14,339 |   |
|                                                       |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Share Data (1):                                     |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per common share                     |   | $                                                    | (0.60     | ) |   | $ | 1.00 |   |   | $ | 1.51 |   |   | $ | 1.60 |   |   | $ | 1.85 |   |
| Diluted earnings (loss) per common share                   |   | $                                                    | (0.60     | ) |   |   | 1.00 |   |   |   | 1.51 |   |   |   | 1.60 |   |   |   | 1.85 |   |
| Cash dividends declared per common share                   |   |                                                 | 0.49      |   |   |   | 0.76 |   |   |   | 0.73 |   |   |   | 0.70 |   |   |   | 0.70 |   |
| Book value per common share                                |   |                                                 | 12.76     |   |   |   | 14.61 |   |   |   | 14.14 |   |   |   | 13.40 |   |   |   | 12.28 |   |
| Tangible book value per common share                       |   |                                                 | 10.33     |   |   |   | 11.44 |   |   |   | 11.18 |   |   |   | 11.06 |   |   |   | 10.75 |   |
|                                                       |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data (at period end):                        |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                               |   | $                                                    | 1,723,952 |   |   | $ | 1,835,090 |   |   | $ | 1,647,857 |   |   | $ | 1,456,020 |   |   | $ | 1,051,006 |   |
| Debt obligations:                                          |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB advances                                              |   |                                                 | 15,022    |   |   |   | 82,980 |   |   |   | 142,776 |   |   |   | 121,767 |   |   |   | 47,562 |   |
| Junior subordinated debentures                             |   |                                                 | 25,000    |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |
| Subordinated capital note                                  |   |                                                 | 8,550     |   |   |   | 9,000 |   |   |   | 9,000 |   |   |   | — |   |   |   | — |   |
|                                                       |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average Balance Data:                                      |   |                                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average assets                                             |   | $                                                    | 1,747,648 |   |   | $ | 1,714,131 |   |   | $ | 1,572,599 |   |   | $ | 1,221,649 |   |   | $ | 995,018 |   |
| Average loans                                              |   |                                                 | 1,353,295 |   |   |   | 1,371,034 |   |   |   | 1,324,658 |   |   |   | 1,019,628 |   |   |   | 814,202 |   |
| Average deposits                                           |   |                                                 | 1,459,041 |   |   |   | 1,385,572 |   |   |   | 1,250,614 |   |   |   | 997,287 |   |   |   | 810,419 |   |
| Average FHLB advances                                      |   |                                                 | 47,800    |   |   |   | 106,259 |   |   |   | 138,954 |   |   |   | 69,276 |   |   |   | 57,847 |   |
| Average junior subordinated debentures                     |   |                                                 | 25,000    |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |
| Average subordinated capital note                          |   |                                                 | 8,941     |   |   |   | 9,000 |   |   |   | 4,525 |   |   |   | — |   |   |   | — |   |
| Average notes payable                                      |   |                                                 | —   |   |   |   | — |   |   |   | — |   |   |   | 14 |   |   |   | 7,329 |   |
| Average stockholders’ equity                         |   |                                                 | 188,015   |   |   |   | 168,752 |   |   |   | 131,706 |   |   |   | 114,797 |   |   |   | 83,428 |   |

| (1) | Common share data has been adjusted to reflect a 5% stock dividend effective December 14, 2010, November 19, 2009 and November 10, 2008. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation |
|--------------|--------------------------------------------------------------------------------------------|

----

|   | § | Loans decreased 7.8% to $1.30 billion compared to $1.41 billion at December 31, 2009. |
|--------|--------|---------------------------------------------------------------------------------------|

|   | § | Total assets decreased 6.1% to $1.7 billion since the 2009 year-end. |
|--------|--------|----------------------------------------------------------------------|

|   | § | Deposits declined 4.1% to $1.47 billion compared with $1.53 billion at December 31, 2009. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | § | Our capital ratios were strengthened during 2010 with capital raises of approximately $32 million. At December 31, 2010, our total risk-based capital ratio rose to 16.3% from 13.8% at December 31, 2009, well above the 10.0% requirement for a well-capitalized institution. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Our efficiency ratio was 72.0% for 2010 compared with 50.1% for 2009. |
|--------|--------|-----------------------------------------------------------------------|

|   | § | Net interest margin increased to 3.59% for 2010 compared to 3.33% for 2009 as a result of lower average cost of funds. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | § | Non-performing assets increased from $99.5 million at December 31, 2009, to $128 million at December 31, 2010. The bulk of our non-performing assets are the result of weakness in our construction and land development portfolio. We have made solid progress in reducing our exposure to higher risk construction and land development loans. Since year-end 2008, our construction and land development loans have been reduced by 46.3% and represented only 15.3% of our loan portfolio at year-end 2010. We also continue to be diligent in moving non-performing loans through the system of collection or foreclosure. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Provision for loan losses increased $15.9 million in 2010 compared to 2009 as the result of an increase in non-performing loans, and an increase in net loan charge-offs of $22.2 million, or 1.64% of average loans for 2010, compared with $7.5 million, or 0.54% of average loans for 2009. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Other real estate owned (OREO) expenses increased to $16.3 million for the year ended December 31, 2010, from $1.2 million for the year ended December 31, 2009.  This increase was primarily attributable to $14.1 million in fair value write-downs tied to declining real estate values reflected in new appraisals, as well as the ongoing carrying and maintenance costs for the OREO portfolio. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                           |   | For theYears Ended December 31, |   |   | Change from Prior Period |   |
|------------------------------------------------|--------|------------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                           |   | 2010                                           |   |   | 2009                                    |   |   | Amount |   |   | Percent |   |
|                                           |   | (dollars in thousands)                         |   |
| Gross interest income                          |   | $                                              | 86,407 |   |                                    | $      | 94,466 |   |   | $ | (8,059 | ) |   |   | (8.5 | )% |
| Gross interest expense                         |   |                                           | 28,841 |   |                                    |   | 40,412 |   |   |   | (11,571 | ) |   |   | (28.6 | ) |
| Net interest income                            |   |                                           | 57,566 |   |                                    |   | 54,054 |   |   |   | 3,512 |   |   |   | 6.5 |   |
| Provision for credit losses                    |   |                                           | 30,100 |   |                                    |   | 14,200 |   |   |   | 15,900 |   |   |   | 112.0 |   |
| Non-interest income                            |   |                                           | 7,027  |   |                                    |   | 6,779 |   |   |   | 248 |   |   |   | 3.7 |   |
| Gains on sale of securities, net               |   |                                           | 5,152  |   |                                    |   | 315 |   |   |   | 4,837 |   |   |   | 1535.6 |   |
| Other than temporary impairment on securities  |   |                                           | (597   | )      |                                    |   | – |   |   |   | (597 | ) |   |   | (100.0 | ) |
| Non-interest expense                           |   |                                           | 46,478 |   |                                    |   | 30,456 |   |   |   | 16,022 |   |   |   | 52.6 |   |
| Net income (loss) before taxes                 |   |                                           | (7,430 | )      |                                    |   | 16,492 |   |   |   | (23,922 | ) |   |   | (145.1 | ) |
| Income tax expense (benefit)                   |   |                                           | (3,046 | )      |                                    |   | 5,424 |   |   |   | (8,470 | ) |   |   | (156.2 | ) |
| Net income (loss)                              |   |                                           | (4,384 | )      |                                    |   | 11,068 |   |   |   | (15,452 | ) |   |   | (139.6 | ) |
| Dividends on preferred stock                   |   |                                           | 1,810  |   |                                    |   | 1,750 |   |   |   | 60 |   |   |   | 3.4 |   |
| Accretion on Series A preferred stock          |   |                                           | 177    |   |                                    |   | 176 |   |   |   | 1 |   |   |   | 0.6 |   |
| Earnings allocated to participating securities |   |                                           | (184   | )      |                                    |   | 97 |   |   |   | (281 | ) |   |   | (289.7 | ) |
| Net income (loss) available to common          |   |                                           | (6,187 | )      |                                    |   | 9,045 |   |   |   | (15,232 | ) |   |   | (168.4 | ) |

----

|                                           |   | For theYears Ended December 31, |   |   | Change from Prior Period |   |
|------------------------------------------------|--------|------------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                           |   | 2009                                           |   |   | 2008                                    |   |   | Amount |   |   | Percent |   |
|                                           |   | (dollars in thousands)                         |   |
| Gross interest income                          |   | $                                              | 94,466 |   |                                    | $      | 100,107 |   |   | $ | (5,641 | ) |   |   | (5.6 | )% |
| Gross interest expense                         |   |                                           | 40,412 |   |                                    |   | 52,881 |   |   |   | (12,469 | ) |   |   | (23.6 | ) |
| Net interest income                            |   |                                           | 54,054 |   |                                    |   | 47,226 |   |   |   | 6,828 |   |   |   | 14.5 |   |
| Provision for credit losses                    |   |                                           | 14,200 |   |                                    |   | 5,400 |   |   |   | 8,800 |   |   |   | 163.0 |   |
| Non-interest income                            |   |                                           | 6,779  |   |                                    |   | 7,475 |   |   |   | (696 | ) |   |   | (9.3 | ) |
| Gains (losses) on sale of securities, net      |   |                                           | 315    |   |                                    |   | (136 | ) |   |   | 451 |   |   |   | 331.6 |   |
| Other than temporary impairment on securities  |   |                                           | -      |   |                                    |   | (471 | ) |   |   | 471 |   |   |   | 100.0 |   |
| Non-interest expense                           |   |                                           | 30,456 |   |                                    |   | 27,757 |   |   |   | 2,699 |   |   |   | 9.7 |   |
| Net income before taxes                        |   |                                           | 16,492 |   |                                    |   | 20,937 |   |   |   | (4,445 | ) |   |   | (21.2 | ) |
| Income tax expense                             |   |                                           | 5,424  |   |                                    |   | 6,927 |   |   |   | (1,503 | ) |   |   | (21.7 | ) |
| Net income                                     |   |                                           | 11,068 |   |                                    |   | 14,010 |   |   |   | (2,942 | ) |   |   | (21.0 | ) |
| Dividends on preferred stock                   |   |                                           | 1,750  |   |                                    |   | 194 |   |   |   | 1,556 |   |   |   | 802.1 |   |
| Accretion on Series A preferred stock          |   |                                           | 176    |   |                                    |   | 20 |   |   |   | 156 |   |   |   | 780.0 |   |
| Earnings allocated to participating securities |   |                                           | 97     |   |                                    |   | 94 |   |   |   | 3 |   |   |   | 3.2 |   |
| Net income available to common                 |   |                                           | 9,045  |   |                                    |   | 13,702 |   |   |   | (4,657 | ) |   |   | (34.0 | ) |

----

----

|                                                                             |   | For the Years Ended December 31, |      |
|----------------------------------------------------------------------------------|--------|---------------------------------------|-----------|
|                                                                             |   | 2010                                  |      |   | 2009 |   |
|                                                                             |   | AverageBalance                        |      |   | InterestEarned/Paid |   |   | AverageYield/Cost |   |   | AverageBalance |   |   | InterestEarned/Paid |   |   | AverageYield/Cost |   |
|                                                                             |   | (dollars in thousands)                |      |
| ASSETS                                                                           |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                         |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivables (1)(2)                                                         |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                                                      |   | $                                     | 1,209,125 |   |   | $ | 67,960 |   |   |   | 5.62 | % |   | $ | 1,226,403 |   |   | $ | 73,843 |   |   |   | 6.02 | %  |
| Commercial                                                                       |   |                                  | 84,847    |   |   |   | 5,131 |   |   |   | 6.05 |   |   |   | 89,010 |   |   |   | 5,705 |   |   |   | 6.41 |   |
| Consumer                                                                         |   |                                  | 34,346    |   |   |   | 2,944 |   |   |   | 8.57 |   |   |   | 36,848 |   |   |   | 3,209 |   |   |   | 8.71 |   |
| Agriculture                                                                      |   |                                  | 23,877    |   |   |   | 1,483 |   |   |   | 6.21 |   |   |   | 16,559 |   |   |   | 1,117 |   |   |   | 6.75 |   |
| Other                                                                            |   |                                  | 1,100     |   |   |   | 41 |   |   |   | 3.73 |   |   |   | 2,214 |   |   |   | 96 |   |   |   | 4.34 |   |
| U.S. Treasury and agencies                                                       |   |                                  | 9,674     |   |   |   | 362 |   |   |   | 3.74 |   |   |   | 1,279 |   |   |   | 57 |   |   |   | 4.46 |   |
| Mortgage-backed securities                                                       |   |                                  | 110,718   |   |   |   | 5,846 |   |   |   | 5.28 |   |   |   | 134,779 |   |   |   | 7,978 |   |   |   | 5.92 |   |
| State and political subdivision securities (3)                                   |   |                                  | 21,331    |   |   |   | 854 |   |   |   | 6.16 |   |   |   | 21,813 |   |   |   | 878 |   |   |   | 6.19 |   |
| State and political subdivision securities                                       |   |                                  | 2,947     |   |   |   | 161 |   |   |   | 5.46 |   |   |   | 2,826 |   |   |   | 154 |   |   |   | 5.45 |   |
| Corporate bonds                                                                  |   |                                  | 12,906    |   |   |   | 875 |   |   |   | 6.78 |   |   |   | 10,423 |   |   |   | 681 |   |   |   | 6.53 |   |
| FHLB stock                                                                       |   |                                  | 10,072    |   |   |   | 441 |   |   |   | 4.38 |   |   |   | 10,072 |   |   |   | 466 |   |   |   | 4.63 |   |
| Other debt securities                                                            |   |                                  | 694       |   |   |   | 46 |   |   |   | 6.63 |   |   |   | 704 |   |   |   | 46 |   |   |   | 6.53 |   |
| Other equity securities                                                          |   |                                  | 1,623     |   |   |   | 48 |   |   |   | 2.96 |   |   |   | 1,901 |   |   |   | 55 |   |   |   | 2.89 |   |
| Federal funds sold                                                               |   |                                  | 12,633    |   |   |   | 16 |   |   |   | 0.13 |   |   |   | 21,591 |   |   |   | 18 |   |   |   | 0.08 |   |
| Interest-bearing deposits in other financial institutions                        |   |                                  | 82,648    |   |   |   | 199 |   |   |   | 0.24 |   |   |   | 60,681 |   |   |   | 163 |   |   |   | 0.27 |   |
| Total interest-earning assets                                                    |   |                                  | 1,618,541 |   |   |   | 86,407 |   |   |   | 5.37 | % |   |   | 1,637,103 |   |   |   | 94,466 |   |   |   | 5.80 | %  |
| Less: Allowance for loan losses                                                  |   |                                  | (27,836   | )  |   |   |   |   |   |   |   |   |   |   | (21,130 | ) |   |   |   |   |   |   |   |   |
| Non-interest-earning assets                                                      |   |                                  | 156,943   |   |   |   |   |   |   |   |   |   |   |   | 98,158 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                     |   | $                                     | 1,747,648 |   |   |   |   |   |   |   |   |   |   | $ | 1,714,131 |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                       |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities                                                     |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit and other time deposits                                  |   | $                                     | 1,156,724 |   |   | $ | 23,415 |   |   |   | 2.02 | % |   | $ | 1,089,798 |   |   | $ | 32,816 |   |   |   | 3.01 | %  |
| NOW and money market deposits                                                    |   |                                  | 164,541   |   |   |   | 1,716 |   |   |   | 1.04 |   |   |   | 162,221 |   |   |   | 1,962 |   |   |   | 1.21 |   |
| Savings accounts                                                                 |   |                                  | 35,393    |   |   |   | 261 |   |   |   | 0.74 |   |   |   | 34,386 |   |   |   | 310 |   |   |   | 0.90 |   |
| Federal funds purchased and repurchase agreements                                |   |                                  | 11,734    |   |   |   | 484 |   |   |   | 4.12 |   |   |   | 11,042 |   |   |   | 476 |   |   |   | 4.31 |   |
| FHLB advances                                                                    |   |                                  | 47,800    |   |   |   | 2,015 |   |   |   | 4.22 |   |   |   | 106,259 |   |   |   | 3,691 |   |   |   | 3.47 |   |
| Junior subordinated debentures                                                   |   |                                  | 33,941    |   |   |   | 950 |   |   |   | 2.80 |   |   |   | 34,000 |   |   |   | 1,157 |   |   |   | 3.40 |   |
| Total interest-bearing liabilities                                               |   |                                  | 1,450,133 |   |   |   | 28,841 |   |   |   | 1.99 | % |   |   | 1,437,706 |   |   |   | 40,412 |   |   |   | 2.81 | %  |
| Non-interest-bearing liabilities                                                 |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing deposits                                                    |   |                                  | 102,383   |   |   |   |   |   |   |   |   |   |   |   | 99,167 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                |   |                                  | 7,117     |   |   |   |   |   |   |   |   |   |   |   | 8,506 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                |   |                                  | 1,559,633 |   |   |   |   |   |   |   |   |   |   |   | 1,545,379 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                       |   |                                  | 188,015   |   |   |   |   |   |   |   |   |   |   |   | 168,752 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                                 |   | $                                     | 1,747,648 |   |   |   |   |   |   |   |   |   |   | $ | 1,714,131 |   |   |   |   |   |   |   |   |   |
| Net interest income                                                              |   |                                  |      |   |   | $ | 57,566 |   |   |   |   |   |   |   |   |   |   | $ | 54,054 |   |   |   |   |   |
| Net interest spread                                                              |   |                                  |      |   |   |   |   |   |   |   | 3.38 | % |   |   |   |   |   |   |   |   |   |   | 2.99 | %  |
| Net interest margin                                                              |   |                                  |      |   |   |   |   |   |   |   | 3.59 | % |   |   |   |   |   |   |   |   |   |   | 3.33 | %  |
| Ratio of average interest-earning assets to average interest-bearing liabilities |   |                                  |      |   |   |   |   |   |   |   | 111.61 | % |   |   |   |   |   |   |   |   |   |   | 113.87 | %  |

----

| (1) | Includes loan fees in both interest income and the calculation of yield on loans. |
|-----|-----------------------------------------------------------------------------------|

| (2) | Calculations include non-accruing loans in average loan amounts outstanding. |
|-----|------------------------------------------------------------------------------|

| (3) | Taxable equivalent yields are calculated assuming a 35% federal income tax rate. |
|-----|----------------------------------------------------------------------------------|

----

|                                                                                                                                            |   | For the Years Ended December 31, |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-----------|
|                                                                                                                                            |   | 2009                                  |      |   | 2008 |   |
|                                                                                                                                            |   | AverageBalance                        |      |   | InterestEarned/Paid |   |   | AverageYield/Cost |   |   | AverageBalance |   |   | InterestEarned/Paid |   |   | AverageYield/Cost |   |
|                                                                                                                                            |   | (dollars in thousands)                |      |
| ASSETS                                                                                                                                          |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                                                                                        |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivables (1)(2)                                                                                                                        |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                                                                                                                     |   | $                                     | 1,226,403 |   |   | $ | 73,843 |   |   |   | 6.02 | % |   | $ | 1,164,892 |   |   | $ | 81,125 |   |   |   | 6.96 | % |
| Commercial                                                                                                                                      |   |                                  | 89,010    |   |   |   | 5,705 |   |   |   | 6.41 |   |   |   | 102,726 |   |   |   | 7,238 |   |   |   | 7.05 |   |
| Consumer                                                                                                                                        |   |                                  | 36,848    |   |   |   | 3,209 |   |   |   | 8.71 |   |   |   | 38,786 |   |   |   | 3,637 |   |   |   | 9.38 |   |
| Agriculture                                                                                                                                     |   |                                  | 16,559    |   |   |   | 1,117 |   |   |   | 6.75 |   |   |   | 15,555 |   |   |   | 1,181 |   |   |   | 7.59 |   |
| Other                                                                                                                                           |   |                                  | 2,214     |   |   |   | 96 |   |   |   | 4.34 |   |   |   | 2,699 |   |   |   | 36 |   |   |   | 1.33 |   |
| U.S. Treasury and agencies                                                                                                                      |   |                                  | 1,279     |   |   |   | 57 |   |   |   | 4.46 |   |   |   | 11,000 |   |   |   | 482 |   |   |   | 4.38 |   |
| Mortgage-backed securities                                                                                                                      |   |                                  | 134,779   |   |   |   | 7,978 |   |   |   | 5.92 |   |   |   | 76,227 |   |   |   | 3,828 |   |   |   | 5.02 |   |
| State and political subdivision securities (3)                                                                                                  |   |                                  | 21,813    |   |   |   | 878 |   |   |   | 6.19 |   |   |   | 20,272 |   |   |   | 818 |   |   |   | 6.21 |   |
| State and political subdivision securities                                                                                                      |   |                                  | 2,826     |   |   |   | 154 |   |   |   | 5.45 |   |   |   | 2,455 |   |   |   | 133 |   |   |   | 5.42 |   |
| Corporate bonds                                                                                                                                 |   |                                  | 10,423    |   |   |   | 681 |   |   |   | 6.53 |   |   |   | 6,499 |   |   |   | 382 |   |   |   | 5.88 |   |
| FHLB stock                                                                                                                                      |   |                                  | 10,072    |   |   |   | 466 |   |   |   | 4.63 |   |   |   | 9,876 |   |   |   | 518 |   |   |   | 5.25 |   |
| Other debt securities                                                                                                                           |   |                                  | 704       |   |   |   | 46 |   |   |   | 6.53 |   |   |   | 704 |   |   |   | 46 |   |   |   | 6.53 |   |
| Other equity securities                                                                                                                         |   |                                  | 1,901     |   |   |   | 55 |   |   |   | 2.89 |   |   |   | 3,474 |   |   |   | 112 |   |   |   | 3.22 |   |
| Federal funds sold                                                                                                                              |   |                                  | 21,591    |   |   |   | 18 |   |   |   | 0.08 |   |   |   | 21,138 |   |   |   | 405 |   |   |   | 1.92 |   |
| Interest-bearing deposits in other financial institutions                                                                                       |   |                                  | 60,681    |   |   |   | 163 |   |   |   | 0.27 |   |   |   | 14,853 |   |   |   | 166 |   |   |   | 1.12 |   |
|                    Total interest-earning assets |   |                                  | 1,637,103 |   |   |   | 94,466 |   |   |   | 5.80 | % |   |   | 1,491,156 |   |   |   | 100,107 |   |   |   | 6.74 | % |
| Less: Allowance for loan losses                                                                                                                 |   |                                  | (21,130   | ) |   |   |   |   |   |   |   |   |   |   | (18,087 | ) |   |   |   |   |   |   |   |   |
| Non-interest-earning assets                                                                                                                     |   |                                  | 98,158    |   |   |   |   |   |   |   |   |   |   |   | 99,530 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                                                                                    |   | $                                     | 1,714,131 |   |   |   |   |   |   |   |   |   |   | $ | 1,572,599 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                            |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                            |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                      |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities                                                                                                                    |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit and other time deposits                                                                                                 |   | $                                     | 1,089,798 |   |   | $ | 32,816 |   |   |   | 3.01 | % |   | $ | 946,477 |   |   | $ | 40,811 |   |   |   | 4.31 | % |
| NOW and money market deposits                                                                                                                   |   |                                  | 162,221   |   |   |   | 1,962 |   |   |   | 1.21 |   |   |   | 176,812 |   |   |   | 3,822 |   |   |   | 2.16 |   |
| Savings accounts                                                                                                                                |   |                                  | 34,386    |   |   |   | 310 |   |   |   | 0.90 |   |   |   | 33,969 |   |   |   | 440 |   |   |   | 1.30 |   |
| Federal funds purchased and repurchase agreements                                                                                               |   |                                  | 11,042    |   |   |   | 476 |   |   |   | 4.31 |   |   |   | 14,045 |   |   |   | 555 |   |   |   | 3.95 |   |
| FHLB advances                                                                                                                                   |   |                                  | 106,259   |   |   |   | 3,691 |   |   |   | 3.47 |   |   |   | 138,954 |   |   |   | 5,589 |   |   |   | 4.02 |   |
| Junior subordinated debentures                                                                                                                  |   |                                  | 34,000    |   |   |   | 1,157 |   |   |   | 3.40 |   |   |   | 29,525 |   |   |   | 1,664 |   |   |   | 5.64 |   |
| Total interest-bearing liabilities                                                                                                              |   |                                  | 1,437,706 |   |   |   | 40,412 |   |   |   | 2.81 | % |   |   | 1,339,782 |   |   |   | 52,881 |   |   |   | 3.95 | % |
| Non-interest-bearing liabilities                                                                                                                |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing deposits                                                                                                                   |   |                                  | 99,167    |   |   |   |   |   |   |   |   |   |   |   | 93,356 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                                                               |   |                                  | 8,506     |   |   |   |   |   |   |   |   |   |   |   | 7,755 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                                                                               |   |                                  | 1,545,379 |   |   |   |   |   |   |   |   |   |   |   | 1,440,893 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                                                                                      |   |                                  | 168,752   |   |   |   |   |   |   |   |   |   |   |   | 131,706 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                                                                                                |   | $                                     | 1,714,131 |   |   |   |   |   |   |   |   |   |   | $ | 1,572,599 |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                                                                             |   |                                  |      |   |   | $ | 54,054 |   |   |   |   |   |   |   |   |   |   | $ | 47,226 |   |   |   |   |   |
| Net interest spread                                                                                                                             |   |                                  |      |   |   |   |   |   |   |   | 2.99 | % |   |   |   |   |   |   |   |   |   |   | 2.79 | % |
| Net interest margin                                                                                                                             |   |                                  |      |   |   |   |   |   |   |   | 3.33 | % |   |   |   |   |   |   |   |   |   |   | 3.20 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities                                                                |   |                                  |      |   |   |   |   |   |   |   | 113.87 | % |   |   |   |   |   |   |   |   |   |   | 111.30 | % |

----

| (1) | Includes loan fees in both interest income and the calculation of yield on loans. |
|-----|-----------------------------------------------------------------------------------|

| (2) | Calculations include non-accruing loans in average loan amounts outstanding. |
|-----|------------------------------------------------------------------------------|

| (3) | Taxable equivalent yields are calculated assuming a 35% federal income tax rate. |
|-----|----------------------------------------------------------------------------------|

----

|                                                      |                | Year Ended December 31, 2010 vs. 2009 |    |                            | Year Ended December 31, 2009 vs. 2008 |   |
|-----------------------------------------------------------|---------------------|---------------------------------------------------------------------|---------|---------------------------------|---------------------------------------------------------------------|--------|
|                                                      |                | Increase (decrease)due to change in                            |    |                            | Increase (decrease)due to change in                                 |   |
|                                                      |                |   Rate                                                         |    |                            |   Volume                                                       |   |   | NetChange |   |   |   Rate |   |   |   Volume |   |   | NetChange |   |
|                                                      | (in thousands) |
| Interest-earning assets:                                  |                |                                                                |    |                            |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan receivables                                          |                | $                                                                   | (5,337  | )      |                                                                | $      | (1,074 | ) |   | $ | (6,411 | ) |   | $ | (12,421 | ) |   | $ | 3,174 |   |   | $ | (9,247 | ) |
| U.S. Treasury and agencies                                |                |                                                                | (10     | )                               |                                                                |   | 315 |   |   |   | 305 |   |   |   | 8 |   |   |   | (433 | )  |   |   | (425 | ) |
| Mortgage-backed securities                                |                |                                                                | (804    | )                               |                                                                |   | (1,328 | ) |   |   | (2,132 | ) |   |   | 525 |   |   |   | 3,625 |   |   |   | 4,150 |   |
| State and political subdivision securities                |                |                                                                | (2      | )                               |                                                                |   | (15 | ) |   |   | (17 | ) |   |   | 1 |   |   |   | 80 |   |   |   | 81 |   |
| Corporate bonds                                           |                |                                                                | 27      |                            |                                                                |   | 167 |   |   |   | 194 |   |   |   | 37 |   |   |   | 262 |   |   |   | 299 |   |
| FHLB stock                                                |                |                                                                | (25     | )                               |                                                                |   | — |   |   |   | (25 | ) |   |   | (62 | ) |   |   | 10 |   |   |   | (52 | ) |
| Other debt securities                                     |                |                                                                | 1       |                            |                                                                |   | (1 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Other equity securities                                   |                |                                                                | 1       |                            |                                                                |   | (8 | ) |   |   | (7 | ) |   |   | (10 | ) |   |   | (47 | )   |   |   | (57 | ) |
| Federal funds sold                                        |                |                                                                | 7       |                            |                                                                |   | (9 | ) |   |   | (2 | ) |   |   | (396 | ) |   |   | 9 |   |   |   | (387 | ) |
| Interest-bearing deposits in other financial institutions |                |                                                                | (18     | )                               |                                                                |   | 54 |   |   |   | 36 |   |   |   | (203 | ) |   |   | 200 |   |   |   | (3 | ) |
| Total increase (decrease) in interest income              |                |                                                                | (6,160  | )                               |                                                                |   | (1,899 | ) |   |   | (8,059 | ) |   |   | (12,521 | ) |   |   | 6,880 |   |   |   | (5,641 | ) |
| Interest-bearing liabilities:                             |                |                                                                |    |                            |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit and other time deposits      |                |                                                                | (11,295 | )                               |                                                                |   | 1,894 |   |   |   | (9,401 | ) |   |   | (13,552 | ) |   |   | 5,557 |   |   |   | (7,995 | ) |
| NOW and money market accounts                             |                |                                                                | (281    | )                               |                                                                |   | 35 |   |   |   | (246 | ) |   |   | (1,513 | ) |   |   | (347 | )   |   |   | (1,860 | ) |
| Savings accounts                                          |                |                                                                | (58     | )                               |                                                                |   | 9 |   |   |   | (49 | ) |   |   | (135 | ) |   |   | 5 |   |   |   | (130 | ) |
| Federal funds purchased and repurchase agreements         |                |                                                                | (21     | )      |                                                                |   | 29 |   |   |   | 8 |   |   |   | 47 |   |   |   | (126 | )      |   |   | (79 | ) |
| FHLB advances                                             |                |                                                                | 667     |                            |                                                                |   | (2,343 | ) |   |   | (1,676 | ) |   |   | (1,009 | ) |   |   | (889 | )   |   |   | (1,898 | ) |
| Junior subordinated debentures                            |                |                                                                | (205    | )      |                                                                |   | (2 | ) |   |   | (207 | ) |   |   | (731 | ) |   |   | 224 |   |   |   | (507 | ) |
| Total increase (decrease) in interest expense             |                |                                                                | (11,193 | )      |                                                                |   | (378 | ) |   |   | (11,571 | ) |   |   | (16,893 | ) |   |   | 4,424 |   |   |   | (12,469 | ) |
| Increase (decrease) in net interest income                |                | $                                                                   | 5,033   |                            |                                                                | $      | (1,521 | ) |   | $ | 3,512 |   |   | $ | 4,372 |   |   | $ | 2,456 |   |   | $ | 6,828 |   |

|                                                  |   | For the Years EndedDecember 31, |    |
|-------------------------------------------------------|--------|--------------------------------------|---------|
|                                                  |   | 2010                                 |    |   | 2009 |   |   | 2008 |   |
|                                                  |   | (in thousands)                       |    |
| Service charges on deposit accounts                   |   | $                                    | 2,984   |   |   | $ | 3,112 |   |   | $ | 3,424 |   |
| Income from fiduciary activities                      |   |                                 | 987     |   |   |   | 875 |   |   |   | 1,079 |   |
| Secondary market brokerage fees                       |   |                                 | 327     |   |   |   | 235 |   |   |   | 365 |   |
| Title insurance commissions                           |   |                                 | 160     |   |   |   | 130 |   |   |   | 157 |   |
| Gains on sales of loans originated for sale           |   |                                 | 554     |   |   |   | 411 |   |   |   | — |   |
| Gains (losses) on sales of investment securities, net |   |                                 | 5,152   |   |   |   | 315 |   |   |   | (136 | )  |
| Other than temporary impairment on securities         |   |                                 | (597    | )  |   |   | — |   |   |   | (471 | )  |
| Gain on sale of branch                                |   |                                 | — |   |   |   | — |   |   |   | 410 |   |
| Other                                                 |   |                                 | 2,015   |   |   |   | 2,016 |   |   |   | 2,040 |   |
| Total non-interest income                             |   | $                                    | 11,582  |   |   | $ | 7,094 |   |   | $ | 6,868 |   |

----

|                            |   | For the Years EndedDecember 31, |   |
|---------------------------------|--------|--------------------------------------|--------|
|                            |   | 2010                                 |   |   | 2009 |   |   | 2008 |   |
|                            |   | (in thousands)                       |   |
| Salary and employee benefits    |   | $                                    | 14,903 |   |   | $ | 15,009 |   |   | $ | 14,792 |   |
| Occupancy and equipment         |   |                                 | 4,095  |   |   |   | 3,918 |   |   |   | 3,587 |   |
| Other real estate owned expense |   |                                 | 16,254 |   |   |   | 1,155 |   |   |   | 881 |   |
| FDIC insurance                  |   |                                 | 2,971  |   |   |   | 2,984 |   |   |   | 1,051 |   |
| State franchise tax             |   |                                 | 2,172  |   |   |   | 1,800 |   |   |   | 1,740 |   |
| Professional fees               |   |                                 | 1,067  |   |   |   | 901 |   |   |   | 787 |   |
| Communications                  |   |                                 | 737    |   |   |   | 729 |   |   |   | 711 |   |
| Postage and delivery            |   |                                 | 722    |   |   |   | 752 |   |   |   | 748 |   |
| Advertising                     |   |                                 | 408    |   |   |   | 492 |   |   |   | 463 |   |
| Office supplies                 |   |                                 | 388    |   |   |   | 429 |   |   |   | 569 |   |
| Other                           |   |                                 | 2,761  |   |   |   | 2,287 |   |   |   | 2,428 |   |
| Total non-interest expense      |   | $                                    | 46,478 |   |   | $ | 30,456 |   |   | $ | 27,757 |   |

----

|                     |   | As of December 31, |      |
|--------------------------|--------|-------------------------|-----------|
|                     |   | 2010                    |      |   | 2009 |   |
|                     |   | Amount                  |      |   | Percent |   |   | Amount |   |   | Percent |   |
|                     |   | (dollars in thousands)  |      |
|                     |   |                    |      |   |   |   |   |   |   |   |   |   |
| Commercial               |   | $                       | 90,290    |   |   |   | 6.93 | % |   | $ | 89,903 |   |   |   | 6.36 | % |
| Commercial Real Estate:  |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction             |   |                    | 199,524   |   |   |   | 15.32 |   |   |   | 304,230 |   |   |   | 21.53 |   |
| Farmland                 |   |                    | 85,523    |   |   |   | 6.56 |   |   |   | 83,898 |   |   |   | 5.94 |   |
| Other                    |   |                    | 441,844   |   |   |   | 33.92 |   |   |   | 451,945 |   |   |   | 31.99 |   |
| Residential Real Estate: |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family             |   |                    | 74,919    |   |   |   | 5.75 |   |   |   | 65,043 |   |   |   | 4.60 |   |
| Other                    |   |                    | 353,418   |   |   |   | 27.13 |   |   |   | 354,358 |   |   |   | 25.08 |   |
| Consumer                 |   |                    | 31,913    |   |   |   | 2.45 |   |   |   | 36,989 |   |   |   | 2.62 |   |
| Agriculture              |   |                    | 24,177    |   |   |   | 1.86 |   |   |   | 25,064 |   |   |   | 1.77 |   |
| Other                    |   |                    | 1,060     |   |   |   | 0.08 |   |   |   | 1,488 |   |   |   | 0.11 |   |
| Total loans              |   | $                       | 1,302,668 |   |   |   | 100.00 | % |   | $ | 1,412,918 |   |   |   | 100.00 | % |
|                     |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                     |   | As of December 31, |      |
|--------------------------|--------|-------------------------|-----------|
|                     |   | 2008                    |      |   | 2007 |   |   | 2006 |   |
|                     |   | Amount                  |      |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                     |   | (dollars in thousands)  |      |
|                     |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial               |   | $                       | 90,978    |   |   |   | 6.74 | % |   | $ | 108,619 |   |   |   | 8.92 | % |   | $ | 59,113 |   |   |   | 6.92 | % |
| Commercial Real Estate:  |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction             |   |                    | 371,301   |   |   |   | 27.50 |   |   |   | 318,462 |   |   |   | 26.15 |   |   |   | 211,973 |   |   |   | 24.81 |   |
| Farmland                 |   |                    | 77,504    |   |   |   | 5.74 |   |   |   | 69,831 |   |   |   | 5.74 |   |   |   | 47,325 |   |   |   | 5.54 |   |
| Other                    |   |                    | 377,130   |   |   |   | 27.94 |   |   |   | 352,574 |   |   |   | 28.95 |   |   |   | 277,029 |   |   |   | 32.42 |   |
| Residential Real Estate: |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family             |   |                    | 56,350    |   |   |   | 4.17 |   |   |   | 45,207 |   |   |   | 3.71 |   |   |   | 29,819 |   |   |   | 3.49 |   |
| Other                    |   |                    | 319,734   |   |   |   | 23.68 |   |   |   | 268,878 |   |   |   | 22.08 |   |   |   | 184,871 |   |   |   | 21.64 |   |
| Consumer                 |   |                    | 37,783    |   |   |   | 2.80 |   |   |   | 38,061 |   |   |   | 3.13 |   |   |   | 29,709 |   |   |   | 3.48 |   |
| Agriculture              |   |                    | 16,181    |   |   |   | 1.20 |   |   |   | 14,855 |   |   |   | 1.22 |   |   |   | 13,436 |   |   |   | 1.57 |   |
| Other                    |   |                    | 3,145     |   |   |   | 0.23 |   |   |   | 1,211 |   |   |   | 0.10 |   |   |   | 1,092 |   |   |   | 0.13 |   |
| Total loans              |   | $                       | 1,350,106 |   |   |   | 100.00 | % |   | $ | 1,217,698 |   |   |   | 100.00 | % |   | $ | 854,367 |   |   |   | 100.00 | % |

----

|                       |   | As of December 31, 2010 |    |
|----------------------------|--------|------------------------------|---------|
|                       |   | MaturingWithinOne Year       |    |   | Maturing1 through5 Years |   |   | MaturingOver 5Years |   |   | TotalLoans |   |
|                       |   | (dollars in thousands)       |    |
| Loans with fixed rates:    |   |                         |    |   |   |   |   |   |   |   |   |   |
| Commercial                 |   | $                            | 30,261  |   |   | $ | 21,992 |   |   | $ | 640 |   |   | $ | 52,893 |   |
| Commercial Real Estate:    |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction               |   |                         | 39,601  |   |   |   | 14,006 |   |   |   | 10,144 |   |   |   | 63,751 |   |
| Farmland                   |   |                         | 18,220  |   |   |   | 26,822 |   |   |   | 5,397 |   |   |   | 50,439 |   |
| Other                      |   |                         | 108,798 |   |   |   | 162,191 |   |   |   | 23,954 |   |   |   | 294,943 |   |
| Residential Real Estate:   |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family               |   |                         | 21,053  |   |   |   | 38,835 |   |   |   | 8,089 |   |   |   | 67,977 |   |
| Other                      |   |                         | 62,967  |   |   |   | 132,520 |   |   |   | 72,636 |   |   |   | 268,123 |   |
| Consumer                   |   |                         | 7,154   |   |   |   | 19,684 |   |   |   | 2,117 |   |   |   | 28,955 |   |
| Agriculture                |   |                         | 6,809   |   |   |   | 2,748 |   |   |   | 162 |   |   |   | 9,719 |   |
| Other                      |   |                         | 622     |   |   |   | 4 |   |   |   | — |   |   |   | 626 |   |
| Total fixed rate loans     |   | $                            | 295,485 |   |   | $ | 418,802 |   |   | $ | 123,139 |   |   | $ | 837,426 |   |
|                       |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans with floating rates: |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                 |   | $                            | 23,546  |   |   | $ | 6,850 |   |   | $ | 7,001 |   |   | $ | 37,397 |   |
| Commercial Real Estate:    |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction               |   |                         | 96,889  |   |   |   | 36,462 |   |   |   | 2,422 |   |   |   | 135,773 |   |
| Farmland                   |   |                         | 8,616   |   |   |   | 6,096 |   |   |   | 20,372 |   |   |   | 35,084 |   |
| Other                      |   |                         | 45,312  |   |   |   | 78,533 |   |   |   | 23,056 |   |   |   | 146,901 |   |
| Residential Real Estate:   |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family               |   |                         | 2,136   |   |   |   | 2,330 |   |   |   | 2,476 |   |   |   | 6,942 |   |
| Other                      |   |                         | 25,704  |   |   |   | 19,279 |   |   |   | 40,312 |   |   |   | 85,295 |   |
| Consumer                   |   |                         | 1,766   |   |   |   | 753 |   |   |   | 439 |   |   |   | 2,958 |   |
| Agriculture                |   |                         | 12,556  |   |   |   | 1,407 |   |   |   | 495 |   |   |   | 14,458 |   |
| Other                      |   |                         | 400     |   |   |   | — |   |   |   | 34 |   |   |   | 434 |   |
| Total floating rate loans  |   | $                            | 216,925 |   |   | $ | 151,710 |   |   | $ | 96,607 |   |   | $ | 465,242 |   |

----

|                                                       |   |   | As of December 31, |
|------------------------------------------------------------|--------|--------|-------------------------|
|                                                       |   |   | 2010                    |   |   |   | 2009 |   |   |   | 2008 |   |   |   | 2007 |   |   |   | 2006 |   |
|                                                       |   |   | (dollars in thousands)  |
| Past due 90 days or more still on accrual                  |   | $      | 594                     |   |   | $ | 5,968 |   |   | $ | 11,598 |   |   | $ | 2,145 |   |   | $ | 2,010 |   |
| Loans on non-accrual status                                |   |   | 59,799                  |   |   |   | 78,888 |   |   |   | 9,725 |   |   |   | 10,524 |   |   |   | 6,930 |   |
| Total non-performing loans                                 |   |   | 60,393                  |   |   |   | 84,856 |   |   |   | 21,323 |   |   |   | 12,669 |   |   |   | 8,940 |   |
| Real estate acquired through foreclosure                   |   |   | 67,635                  |   |   |   | 14,548 |   |   |   | 7,839 |   |   |   | 4,309 |   |   |   | 2,415 |   |
| Other repossessed assets                                   |   |   | 52                      |   |   |   | 80 |   |   |   | 96 |   |   |   | 30 |   |   |   | 9 |   |
| Total non-performing assets                                |   | $      | 128,080                 |   |   | $ | 99,484 |   |   | $ | 29,258 |   |   | $ | 17,008 |   |   | $ | 11,364 |   |
| Non-performing loans to total loans                        |   |   | 4.63                    | % |   |   | 6.00 | % |   |   | 1.58 | % |   |   | 1.04 | % |   |   | 1.05 | % |
| Non-performing assets to total assets                      |   |   | 7.43                    | % |   |   | 5.42 | % |   |   | 1.78 | % |   |   | 1.17 | % |   |   | 1.08 | % |
| Allowance for non-performing loans                         |   | $      | 7,977                   |   |   | $ | 7,266 |   |   | $ | 2,363 |   |   | $ | 1,443 |   |   | $ | 1,772 |   |
| Allowance for non-performing loans to non-performing loans |   |   | 13.2                    | % |   |   | 8.6 | % |   |   | 11.1 | % |   |   | 11.4 | % |   |   | 19.8 | % |

----

|                     |   | 2010           |   |   | 2009   |   |
|--------------------------|--------|----------------|--------|--------|--------|--------|
|                     |   | (in thousands) |   |
| Commercial Real Estate:  |   |           |   |   |   |   |
| Construction             |   | $              | 50,491 |   |   | $      | 7,526 |   |
| Farmland                 |   |           | 1,904  |   |   |   | 442 |   |
| Other                    |   |           | 6,504  |   |   |   | 1,938 |   |
| Residential Real Estate: |   |           |   |   |   |   |   |   |
| Multi-family             |   |           | 823    |   |   |   | – |   |
| Other                    |   |           | 7,913  |   |   |   | 4,642 |   |
|                     |   | $              | 67,635 |   |   | $      | 14,548 |   |

----

| OREO Activity (in thousands) |   |   |    |
|------------------------------|--------|--------|---------|
| OREO as of January 1, 2010   |   | $      | 14,548  |   |
| Real estate acquired         |   |   | 90,787  |   |
| Valuation adjustments        |   |   | (14,062 | ) |
| Improvements                 |   |   | 1,947   |   |
| Properties sold              |   |   | (25,585 | ) |
| OREO as of December 31, 2010 |   | $      | 67,635  |   |

|                                              |   | As of December 31, |    |
|---------------------------------------------------|--------|-------------------------|---------|
|                                              |   | 2010                    |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                              |   | (dollars in thousands)  |    |
| Balances at beginning of period                   |   | $                       | 26,392  |   |   | $ | 19,652 |   |   | $ | 16,342 |   |   | $ | 12,832 |   |   | $ | 12,197 |   |
|                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans charged-off:                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                       |   |                    | 19,261  |   |   |   | 6,519 |   |   |   | 2,711 |   |   |   | 1,777 |   |   |   | 467 |   |
| Commercial                                        |   |                    | 2,675   |   |   |   | 301 |   |   |   | 347 |   |   |   | 299 |   |   |   | 132 |   |
| Consumer                                          |   |                    | 496     |   |   |   | 875 |   |   |   | 749 |   |   |   | 267 |   |   |   | 436 |   |
| Agriculture                                       |   |                    | 29      |   |   |   | 36 |   |   |   | 27 |   |   |   | 31 |   |   |   | 1 |   |
| Total charge-offs                                 |   |                    | 22,461  |   |   |   | 7,731 |   |   |   | 3,834 |   |   |   | 2,374 |   |   |   | 1,036 |   |
|                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                       |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                       |   |                    | 114     |   |   |   | 133 |   |   |   | 145 |   |   |   | 84 |   |   |   | 59 |   |
| Commercial                                        |   |                    | 28      |   |   |   | 55 |   |   |   | 85 |   |   |   | 54 |   |   |   | 121 |   |
| Consumer                                          |   |                    | 104     |   |   |   | 76 |   |   |   | 85 |   |   |   | 88 |   |   |   | 83 |   |
| Agriculture                                       |   |                    | 8       |   |   |   | 7 |   |   |   | 8 |   |   |   | 8 |   |   |   | 3 |   |
| Total recoveries                                  |   |                    | 254     |   |   |   | 271 |   |   |   | 323 |   |   |   | 234 |   |   |   | 266 |   |
| Net charge-offs                                   |   |                    | 22,207  |   |   |   | 7,460 |   |   |   | 3,511 |   |   |   | 2,140 |   |   |   | 770 |   |
| Provision for loan losses                         |   |                    | 30,100  |   |   |   | 14,200 |   |   |   | 5,400 |   |   |   | 4,025 |   |   |   | 1,405 |   |
| Balance acquired in bank acquisition              |   |                    | — |   |   |   | — |   |   |   | 1,421 |   |   |   | 1,625 |   |   |   | — |   |
| Balance at end of period                          |   | $                       | 34,285  |   |   | $ | 26,392 |   |   | $ | 19,652 |   |   | $ | 16,342 |   |   | $ | 12,832 |   |
| Allowance for loan losses to period-end loans     |   |                    | 2.63    | % |   |   | 1.87 | % |   |   | 1.46 | % |   |   | 1.34 | % |   |   | 1.50 | % |
| Net charge-offs to average loans                  |   |                    | 1.64    | % |   |   | 0.54 | % |   |   | 0.27 | % |   |   | 0.21 | % |   |   | 0.09 | % |
| Allowance for loan losses to non-performing loans |   |                    | 56.77   | % |   |   | 31.10 | % |   |   | 92.16 | % |   |   | 128.99 | % |   |   | 143.53 | % |

----

----

----

|                     |   | As of December 31, |    |
|--------------------------|--------|-------------------------|---------|
|                     |   | 2010                    |    |   | 2009 |   |
|                     |   | Amount ofAllowance |    |   | Percent of Loans to TotalLoans |   |   | Amount ofAllowance |   |   | Percent of Loans to TotalLoans |   |
|                     |   |                    |    |
|                     |   |                    |    |   |   |   |   |   |   |   |   |   |
| Commercial               |   | $                       | 2,147   |   |   |   | 6.93 | % |   | $ | 2,040 |   |   |   | 6.36 | % |
| Commercial Real Estate:  |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction             |   |                    | 11,164  |   |   |   | 15.32 |   |   |   | 8,215 |   |   |   | 21.53 |   |
| Farmland                 |   |                    | 702     |   |   |   | 6.56 |   |   |   | 643 |   |   |   | 5.94 |   |
| Other                    |   |                    | 12,209  |   |   |   | 33.92 |   |   |   | 9,266 |   |   |   | 31.99 |   |
| Residential Real Estate: |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family             |   |                    | 517     |   |   |   | 5.75 |   |   |   | 578 |   |   |   | 4.60 |   |
| Other                    |   |                    | 6,707   |   |   |   | 27.13 |   |   |   | 4,662 |   |   |   | 25.08 |   |
| Consumer                 |   |                    | 701     |   |   |   | 2.45 |   |   |   | 538 |   |   |   | 2.62 |   |
| Agriculture              |   |                    | 134     |   |   |   | 1.86 |   |   |   | 163 |   |   |   | 1.77 |   |
| Other                    |   |                    | 4       |   |   |   | 0.08 |   |   |   | 5 |   |   |   | 0.11 |   |
| Unallocated              |   |                    | — |   |   |   | — |   |   |   | 282 |   |   |   | — |   |
| Total                    |   | $                       | 34,285  |   |   |   | 100.00 | % |   | $ | 26,392 |   |   |   | 100.00 | % |

|                     |   | As of December 31, |   |
|--------------------------|--------|-------------------------|--------|
|                     |   | 2008                    |   |   | 2007 |   |   | 2006 |   |
|                     |   | Amount ofAllowance |   |   | Percent of Loans to TotalLoans |   |   | Amount ofAllowance |   |   | Percent of Loans to TotalLoans |   |   | Amount ofAllowance |   |   | Percent of Loans to TotalLoans |   |
|                     |   | (dollars in thousands)  |   |
|                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial               |   | $                       | 1,623  |   |   |   | 6.74 | % |   | $ | 1,655 |   |   |   | 8.92 | % |   | $ | 896 |   |   |   | 6.92 | % |
| Commercial Real Estate:  |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction             |   |                    | 5,907  |   |   |   | 27.50 |   |   |   | 3,654 |   |   |   | 26.15 |   |   |   | 2,000 |   |   |   | 24.81 |   |
| Farmland                 |   |                    | 882    |   |   |   | 5.74 |   |   |   | 903 |   |   |   | 5.74 |   |   |   | 649 |   |   |   | 5.54 |   |
| Other                    |   |                    | 6,770  |   |   |   | 27.94 |   |   |   | 6,606 |   |   |   | 28.95 |   |   |   | 6,519 |   |   |   | 32.42 |   |
| Residential Real Estate: |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family             |   |                    | 590    |   |   |   | 4.17 |   |   |   | 629 |   |   |   | 3.71 |   |   |   | 396 |   |   |   | 3.49 |   |
| Other                    |   |                    | 2,271  |   |   |   | 23.68 |   |   |   | 1,580 |   |   |   | 22.08 |   |   |   | 1,103 |   |   |   | 21.64 |   |
| Consumer                 |   |                    | 603    |   |   |   | 2.80 |   |   |   | 574 |   |   |   | 3.13 |   |   |   | 462 |   |   |   | 3.48 |   |
| Agriculture              |   |                    | 238    |   |   |   | 1.20 |   |   |   | 192 |   |   |   | 1.22 |   |   |   | 195 |   |   |   | 1.57 |   |
| Other                    |   |                    | 26     |   |   |   | 0.23 |   |   |   | 6 |   |   |   | 0.10 |   |   |   | 3 |   |   |   | 0.13 |   |
| Unallocated              |   |                    | 742    |   |   |   | — |   |   |   | 543 |   |   |   | — |   |   |   | 609 |   |   |   | — |   |
| Total                    |   | $                       | 19,652 |   |   |   | 100.00 | % |   | $ | 16,342 |   |   |   | 100.00 | % |   | $ | 12,832 |   |   |   | 100.00 | % |
|                     |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                       |   | December 31, 2010 |    |   | December 31, 2009 |   |
|--------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                       |   | AmortizedCost          |    |   | GrossUnrealizedGains   |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | AmortizedCost |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | Fair Value |   |
|                                       |   | (dollars in thousands) |    |
| Securities available-for-sale              |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and agencies                 |   | $                      | 5,973   |   |                   | $      | 37 |   |   | $ | — |   |   | $ | 6,010 |   |   | $ | 586 |   |   | $ | 33 |   |   | $ | — |   |   | $ | 619 |   |
| Agency mortgage-backed: residential        |   |                   | 60,270  |   |                   |   | 1,590 |   |   |   | (5 | ) |   |   | 61,855 |   |   |   | 91,127 |   |   |   | 4,028 |   |   |   | — |   |   |   | 95,155 |   |
| Private label mortgage-backed: residential |   |                   | — |   |                   |   | — |   |   |   | — |   |   |   | — |   |   |   | 33,516 |   |   |   | 279 |   |   |   | (2,156 | ) |   |   | 31,639 |   |
| State and municipal                        |   |                   | 26,039  |   |                   |   | 995 |   |   |   | (32 | ) |   |   | 27,002 |   |   |   | 24,537 |   |   |   | 955 |   |   |   | (37 | ) |   |   | 25,455 |   |
| Corporate                                  |   |                   | 8,744   |   |                   |   | 507 |   |   |   | (32 | ) |   |   | 9,219 |   |   |   | 13,054 |   |   |   | 760 |   |   |   | (49 | ) |   |   | 13,765 |   |
| Other debt                                 |   |                   | 572     |   |                   |   | — |   |   |   | — |   |   |   | 572 |   |   |   | 704 |   |   |   | — |   |   |   | (175 | ) |   |   | 529 |   |
| Equity                                     |   |                   | 1,400   |   |                   |   | 254 |   |   |   | (3 | ) |   |   | 1,651 |   |   |   | 1,885 |   |   |   | 75 |   |   |   | (401 | ) |   |   | 1,559 |   |
| Total                                      |   | $                      | 102,998 |   |                   | $      | 3,383 |   |   | $ | (72 | ) |   | $ | 106,309 |   |   | $ | 165,409 |   |   | $ | 6,130 |   |   | $ | (2,818 | ) |   | $ | 168,721 |   |

|                       |   | Due WithinOne Year |    |   | After One YearBut WithinFive Years |   |    | After Five YearsBut WithinTen Years |   |   | After Ten Years |   |   | Total  |    |
|----------------------------|--------|--------------------|---------|--------|------------------------------------|--------|---------|-------------------------------------|--------|--------|-----------------|--------|--------|--------|---------|
|                       |   | Amount             |    |   | Yield                              |   |    | Amount                              |   |   | Yield           |   |   | Amount |    |   | Yield |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
| U.S. Treasury and agencies |   | $                  | — |   |                               |   | — | %                                   |   | $      | 1,989           |   |   |   | 2.99    | % |   | $ | 2,625 |   |   |   | 2.81 | % |   | $ | 1,396 |   |   |   | 3.39 | % |   | $ | 6,010 |   |   |   | 3.01 | % |
| Agency mortgage-backed     |   |               | — |   |                               |   | — |                                |   |   | 1,183           |   |   |   | 4.41    |   |   |   | 6,903 |   |   |   | 5.08 |   |   |   | 53,769 |   |   |   | 4.02 |   |   |   | 61,855 |   |   |   | 4.14 |   |
| State and municipal        |   |               | 367     |   |                               |   | 6.96    |                                |   |   | 5,965           |   |   |   | 5.51    |   |   |   | 13,216 |   |   |   | 5.64 |   |   |   | 7,454 |   |   |   | 6.31 |   |   |   | 27,002 |   |   |   | 5.82 |   |
| Corporate bonds            |   |               | 1,503   |   |                               |   | 6.81    |                                |   |   | 1,319           |   |   |   | 8.14    |   |   |   | 6,397 |   |   |   | 5.66 |   |   |   | — |   |   |   | — |   |   |   | 9,219 |   |   |   | 6.18 |   |
| Other debt                 |   |               | — |   |                               |   | — |                                |   |   | —         |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 572 |   |   |   | 8.00 |   |   |   | 572 |   |   |   | 8.00 |   |
| Total                      |   | $                  | 1,870   |   |                               |   | 6.84    | %                                   |   | $      | 10,456          |   |   |   | 5.18    | % |   | $ | 29,141 |   |   |   | 5.25 | % |   | $ | 63,191 |   |   |   | 4.31 | % |   | $ | 104,658 |   |   |   | 4.70 | % |
| Equity                     |   |               |    |   |                               |   |    |                                |   |   |            |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,651 |   |   |   |   |   |
| Total                      |   |               |    |   |                               |   |    |                                |   |   |            |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 106,309 |   |   |   |   |   |

----

----

|                    |   | For the Years Ended December 31, |      |
|-------------------------|--------|---------------------------------------|-----------|
|                    |   | 2010                                  |      |   | 2009 |   |   | 2008 |   |
|                    |   | AverageBalance                        |      |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |
|                    |   | (dollars in thousands)                |      |
| Demand                  |   | $                                     | 102,383   |   |   |   |   |   | $ | 99,167 |   |   |   |   |   | $ | 93,356 |   |   |   |   |
| Interest Checking       |   |                                  | 83,111    |   |   |   | 0.85 | % |   |   | 75,602 |   |   |   | 0.84 | % |   |   | 92,496 |   |   |   | 1.71 | % |
| Money Market            |   |                                  | 81,430    |   |   |   | 1.24 |   |   |   | 86,619 |   |   |   | 1.53 |   |   |   | 84,316 |   |   |   | 2.66 |   |
| Savings                 |   |                                  | 35,393    |   |   |   | 0.74 |   |   |   | 34,386 |   |   |   | 0.90 |   |   |   | 33,969 |   |   |   | 1.30 |   |
| Certificates of Deposit |   |                                  | 1,156,724 |   |   |   | 2.02 |   |   |   | 1,089,798 |   |   |   | 3.01 |   |   |   | 946,477 |   |   |   | 4.31 |   |
| Total Deposits          |   | $                                     | 1,459,041 |   |   |   |   |   |   | $ | 1,385,572 |   |   |   |   |   |   | $ | 1,250,614 |   |   |   |   |   |
| Weighted Average Rate   |   |                                  |      |   |   |   | 1.74 | % |   |   |   |   |   |   | 2.53 | % |   |   |   |   |   |   | 3.60 | % |

|                    |   | For the Years Ended December 31, |      |
|-------------------------|--------|---------------------------------------|-----------|
|                    |   | 2010                                  |      |   | 2009 |   |   | 2008 |   |
|                    |   | AverageBalance                        |      |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |
|                    |   | (dollars in thousands)                |      |
| Certificates of Deposit |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less than $100,000      |   | $                                     | 579,978   |   |   |   | 2.00 | % |   | $ | 611,011 |   |   |   | 3.03 | % |   | $ | 607,420 |   |   |   | 4.28 | % |
| $100,000 or more        |   |                                  | 576,746   |   |   |   | 2.05 |   |   |   | 478,787 |   |   |   | 2.98 |   |   |   | 339,057 |   |   |   | 4.36 |   |
| Total                   |   | $                                     | 1,156,724 |   |   |   | 2.02 | % |   | $ | 1,089,798 |   |   |   | 3.01 | % |   | $ | 946,477 |   |   |   | 4.31 | % |

| Maturity Period                  |   | Amount                           |    |
|----------------------------------|--------|----------------------------------|---------|
|                             |   | (dollars in thousands) |    |
| Three months or less             |   | $                                | 88,778  |   |
| Three months through six months  |   |                             | 84,908  |   |
| Six months through twelve months |   |                             | 117,405 |   |
| Over twelve months               |   |                             | 306,781 |   |
| Total                            |   | $                                | 597,872 |   |

----

|                                                          |   | December 31,      |    |
|---------------------------------------------------------------|--------|------------------------|---------|
|                                                          |   | 2010                   |    |   | 2009 |   |   | 2008 |   |
|                                                          |   | (dollars in thousands) |    |
| Average balance outstanding                                   |   | $                      | 47,800  |   |   | $ | 106,259 |   |   | $ | 138,954 |   |
| Maximum amount outstanding at any month-end during the period |   |                   | 110,763 |   |   |   | 142,583 |   |   |   | 146,021 |   |
| End of period balance                                         |   |                   | 15,022  |   |   |   | 82,980 |   |   |   | 142,776 |   |
| Weighted average interest rate:                               |   |                   |    |   |   |   |   |   |   |   |   |   |
| At end of period                                              |   |                   | 3.87    | % |   |   | 3.46 | % |   |   | 3.31 | % |
| During the period                                             |   |                   | 4.22    | % |   |   | 3.47 | % |   |   | 4.02 | % |

|        Description |   | Liquidation AmountTrust PreferredSecurities |   |   | Issuance Date |                   | Optional PrepaymentDate (2) |   | Interest Rate (1) |   | Junior SubordinatedDebt and Investment in Trust |   |   |    Maturity Date |
|-------------------------------------------------------|--------|---------------------------------------------|--------|--------|---------------|------------------------|-----------------------------|--------|-------------------|--------|------------------------------------------------------|--------|--------|---------------------------------|
|    (dollars in thousands)                   |   |                                        |   |   |          | (dollars in thousands) |                        |   |              |
| Porter Statutory Trust II                             |   |                                        | $      | 5,000  |          |                   | 2/13/2004                   |   | 3/17/2009         |   | 3-month LIBOR + 2.85%                 |   | $      | 5,155                           |   |   | 2/13/2034 |
| Porter Statutory Trust III                            |   |                                        |   | 3,000  |          |                   | 4/15/2004                   |   | 6/17/2009         |   | 3-month LIBOR + 2.79%                 |   |   | 3,093                           |   |   | 4/15/2034 |
| Porter Statutory Trust IV                             |   |                                        |   | 14,000 |          |                   | 12/14/2006                  |   | 3/1/2012          |   | 3-month LIBOR + 1.67%                 |   |   | 14,434                          |   |   | 3/1/2037 |
| Asencia Statutory Trust I                             |   |                                        |   | 3,000  |          |                   | 2/13/2004                   |   | 3/17/2009         |   | 3-month LIBOR + 2.85%                 |   |   | 3,093                           |   |   | 2/13/2034 |
|                                                  |   |                                        | $      | 25,000 |          |                   |                        |   |              |   |                                                 |   | $      | 25,775                          |   |   |   |

----

| (1) | As of December 31, 2010, the 3-month LIBOR was 0.30%. |
|-----|------------------------------------------------------------|

| (2) | The debentures are callable on or after the optional prepayment date at their principal amount plus accrued interest. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

----

----

----

|                     |   | RegulatoryMinimums |   |   | Well-CapitalizedMinimums |   |   | PorterBancorp |   |   | PBIBank |   |
|--------------------------|--------|--------------------|--------|--------|--------------------------|--------|--------|---------------|--------|--------|---------|--------|
| Tier 1 capital           |   |               | 4.0    | %      |                     |   | 6.0    | %             |   |   | 14.4    | %      |   |   | 12.8 | % |
| Total risk-based capital |   |               | 8.0    |   |                     |   | 10.0   |          |   |   | 16.3    |   |   |   | 14.7 |   |
| Tier 1 leverage ratio    |   |               | 4.0    |   |                     |   | 5.0    |          |   |   | 11.1    |   |   |   | 9.9 |   |

|                         |   | One yearor less        |   |   | More than 1year but lessthan 3 years |   |   | 3 years ormore but lessthan 5 years |   |   | 5 yearsor more |   |   | Total  |    |
|------------------------------|--------|------------------------|--------|--------|----------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|--------|----------------|--------|--------|--------|---------|
|                         |   | (dollars in thousands) |   |
| Commitments to extend credit |   | $                      | 53,244 |   |                                                     | $      | 27,267 |                                                    |   | $      | 4,902          |   |   | $      | 20,069  |   |   | $ | 105,482 |   |
| Standby letters of credit    |   |                   | 3,795  |   |                                                     |   | 27     |                                                    |   |   | —        |   |   |   | — |   |   |   | 3,822 |   |
| Total                        |   | $                      | 57,039 |   |                                                     | $      | 27,294 |                                                    |   | $      | 4,902          |   |   | $      | 20,069  |   |   | $ | 109,304 |   |

|                           |   | One year orless |    |   | More than 1year but lessthan 3 years |   |    | 3 years ormore but lessthan 5 years |   |   | 5 years ormore |   |   | Total  |    |
|--------------------------------|--------|---------------------------|---------|--------|----------------------------------------------------------|--------|---------|---------------------------------------------------------|--------|--------|--------------------------|--------|--------|--------|---------|
|                           |   | (dollars in thousands)    |    |
| Time deposits                  |   | $                         | 638,962 |   |                                                     | $      | 193,275 |                                                    |   | $      | 334,383                  |   |   | $      | 200     |   |   | $ | 1,166,820 |   |
| FHLB advances (1)              |   |                      | — |   |                                                     |   | 5,000   |                                                    |   |   | —                  |   |   |   | — |   |   |   | 5,000 |   |
| FHLB borrowing (2)             |   |                      | 2,256   |   |                                                     |   | 2,788   |                                                    |   |   | 1,527                    |   |   |   | 3,451   |   |   |   | 10,022 |   |
| Subordinated capital note      |   |                      | 900     |   |                                                     |   | 1,800   |                                                    |   |   | 1,800                    |   |   |   | 4,050   |   |   |   | 8,550 |   |
| Junior subordinated debentures |   |                      | — |   |                                                     |   | — |                                                    |   |   | —                  |   |   |   | 25,000  |   |   |   | 25,000 |   |
| Total                          |   | $                         | 642,118 |   |                                                     | $      | 202,863 |                                                    |   | $      | 337,710                  |   |   | $      | 32,701  |   |   | $ | 1,215,392 |   |

----

| (1) | Single maturity fixed rate advance with a rate of 4.48%. |
|-----|----------------------------------------------------------|

| (2) | Fixed rate mortgage-matched borrowings with rates ranging from 0% to 6.49%, and maturities ranging from 2011 through 2035, averaging 3.56%. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
|---------------|------------------------------------------------------------|

|                     |   | Change in FutureNet Interest Income |   |
|--------------------------|--------|-------------------------------------|--------|
| Change in Interest Rates |   | Dollar Change                  |   |   | Percentage Change |   |
|                     |   | (dollars in thousands)              |   |
| + 200 basis points       |   | $                                   | 8,997  |   |   |   | 15.81 | % |
| + 100 basis points       |   |                                | 4,445  |   |   |   | 7.81 |   |

----

|                                                                          |   |   | Volume Subject to Repricing Within |
|-------------------------------------------------------------------------------|--------|--------|------------------------------------|
|                                                                          |   |   | 0 – 90Days                   |   |   |   | 91 – 181Days |   |   |   | 182 – 365Days |   |   |   | 1 – 5Years |   |   |   | Over 5Years |   |   |   | Non-InterestSensitive |   |   |   | Total |   |
|                                                                          |   |   | (dollars in thousands)             |
| Assets:                                                                       |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds sold and short-term investments                                 |   | $      | 137,429                            |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   |   | — |   |   | $ | 137,429 |   |
| Investment securities                                                         |   |   | 5,849                              |   |   |   | 4,506 |   |   |   | 9,307 |   |   |   | 48,473 |   |   |   | 35,951 |   |   |   | 2,223 |   |   |   | 106,309 |   |
| FHLB stock                                                                    |   |   | 10,072                             |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 10,072 |   |
| Loans held for sale                                                           |   |   | 345                                |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 345 |   |
| Loans, net of allowance                                                       |   |   | 696,222                            |   |   |   | 123,809 |   |   |   | 179,294 |   |   |   | 276,104 |   |   |   | 27,239 |   |   |   | (34,285 | ) |   |   | 1,268,383 |   |
| Fixed and other assets                                                        |   |   | —                            |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 201,414 |   |   |   | 201,414 |   |
| Total assets                                                                  |   | $      | 849,917                            |   |   | $ | 128,315 |   |   | $ | 188,601 |   |   | $ | 324,577 |   |   | $ | 63,190 |   |   | $ | 169,352 |   |   | $ | 1,723,952 |   |
|                                                                          |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders’ Equity                                    |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing checking, savings, and money market accounts                 |   | $      | 202,450                            |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | 202,450 |   |
| Certificates of deposit                                                       |   |   | 182,054                            |   |   |   | 183,472 |   |   |   | 271,604 |   |   |   | 528,075 |   |   |   | 1,615 |   |   |   | — |   |   |   | 1,166,820 |   |
| Borrowed funds                                                                |   |   | 35,600                             |   |   |   | 437 |   |   |   | 886 |   |   |   | 19,657 |   |   |   | 3,608 |   |   |   | — |   |   |   | 60,188 |   |
| Other liabilities                                                             |   |   | —                            |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 105,079 |   |   |   | 105,079 |   |
| Stockholders’ equity                                                    |   |   | —                            |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 189,415 |   |   |   | 189,415 |   |
| Total liabilities and stockholders’ equity                              |   | $      | 420,104                            |   |   | $ | 183,909 |   |   | $ | 272,490 |   |   | $ | 547,732 |   |   | $ | 5,223 |   |   | $ | 294,494 |   |   | $ | 1,723,952 |   |
| Period gap                                                                    |   | $      | 429,813                            |   |   | $ | (55,594 | )   |   | $ | (83,889 | )  |   | $ | (223,155 | ) |   | $ | 57,967 |   |   |   |   |   |   |   |   |   |
| Cumulative gap                                                                |   | $      | 429,813                            |   |   | $ | 374,219 |   |   | $ | 290,330 |   |   | $ | 67,175 |   |   | $ | 125,142 |   |   |   |   |   |   |   |   |   |
| Period gap to total assets                                                    |   |   | 24.93                              | % |   |   | (3.22 | %) |   |   | (4.87 | %) |   |   | (12.94 | %) |   |   | 3.36 | % |   |   |   |   |   |   |   |   |
| Cumulative gap to total assets                                                |   |   | 24.93                              | % |   |   | 21.71 | %   |   |   | 16.84 | %    |   |   | 3.90 | % |   |   | 7.26 | % |   |   |   |   |   |   |   |   |
| Cumulative interest-earning assets to cumulative interest-bearing liabilities |   |   | 202.31                             | % |   |   | 161.96 | %   |   |   | 133.12 | %    |   |   | 104.72 | % |   |   | 108.75 | % |   |   |   |   |   |   |   |   |

----

| Item 8. | Financial Statements and Supplementary Data |
|--------------|---------------------------------------------|

----

|  /s/ Maria L. Bouvette                                             |   |   |   |  /s/ David B. Pierce                          |
|-------------------------------------------------------------------------|--------|--------|--------|----------------------------------------------------|
|  Maria L. Bouvette President and Chief Executive Officer |   |   |   |  David B. Pierce Chief Financial Officer |

----

----

|                                                                                                                                                     |   | 2010   |      |   | 2009   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Assets                                                                                                                                                   |   |   |      |   |   |   |
| Cash and due from financial institutions                                                                                                                 |   | $      | 178,693   |   |   | $      | 169,328 |   |
| Federal funds sold                                                                                                                                       |   |   | 6,742     |   |   |   | 2,845 |   |
| Cash and cash equivalents                                                                                                                                |   |   | 185,435   |   |   |   | 172,173 |   |
| Securities available for sale                                                                                                                            |   |   | 106,309   |   |   |   | 168,721 |   |
| Mortgage loans held for sale                                                                                                                             |   |   | 345       |   |   |   | 334 |   |
| Loans, net of allowance of $34,285 and $26,392, respectively                                                                                             |   |   | 1,268,383 |   |   |   | 1,386,526 |   |
| Premises and equipment                                                                                                                                   |   |   | 22,468    |   |   |   | 23,610 |   |
| Other real estate owned                                                                                                                                  |   |   | 67,635    |   |   |   | 14,548 |   |
| Goodwill                                                                                                                                                 |   |   | 23,794    |   |   |   | 23,794 |   |
| Accrued interest receivable and other assets                                                                                                             |   |   | 49,583    |   |   |   | 45,384 |   |
| Total assets                                                                                                                                             |   | $      | 1,723,952 |   |   | $      | 1,835,090 |   |
|                                                                                                                                                     |   |   |      |   |   |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                                               |   |   |      |   |   |   |   |   |
| Deposits                                                                                                                                                 |   |   |      |   |   |   |   |   |
| Non-interest bearing                                                                                                                                     |   | $      | 98,398    |   |   | $      | 97,263 |   |
| Interest bearing                                                                                                                                         |   |   | 1,369,270 |   |   |   | 1,432,833 |   |
| Total deposits                                                                                                                                           |   |   | 1,467,668 |   |   |   | 1,530,096 |   |
| Repurchase agreements                                                                                                                                    |   |   | 11,616    |   |   |   | 11,517 |   |
| Federal Home Loan Bank advances                                                                                                                          |   |   | 15,022    |   |   |   | 82,980 |   |
| Accrued interest payable and other liabilities                                                                                                           |   |   | 6,681     |   |   |   | 7,163 |   |
| Subordinated capital note                                                                                                                                |   |   | 8,550     |   |   |   | 9,000 |   |
| Junior subordinated debentures                                                                                                                           |   |   | 25,000    |   |   |   | 25,000 |   |
| Total liabilities                                                                                                                                        |   |   | 1,534,537 |   |   |   | 1,665,756 |   |
| Commitments and contingent liabilities (Note 18)                                                                                                         |   |   | —   |   |   |   | — |   |
| Stockholders’ equity                                                                                                                               |   |   |      |   |   |   |   |   |
| Preferred stock, no par, 1,000,000 shares authorizedSeries A - 35,000 issued and outstanding; Liquidation preference of $35 million at December 31, 2010 |   |   | 34,484    |   |   |   | 34,307 |   |
| Series C – 317,042 issued and outstanding; Liquidation preference of $3.6 million at December 31, 2010                                             |   |   | 3,283     |   |   |   | — |   |
| Common stock, no par, 19,000,000 shares authorized, 11,846,107 and 8,756,440 shares issued and outstanding, respectively                                 |   |   | 112,236   |   |   |   | 83,104 |   |
| Additional paid-in capital                                                                                                                               |   |   | 19,438    |   |   |   | 14,959 |   |
| Retained earnings                                                                                                                                        |   |   | 17,822    |   |   |   | 34,811 |   |
| Accumulated other comprehensive income                                                                                                                   |   |   | 2,152     |   |   |   | 2,153 |   |
| Total stockholders' equity                                                                                                                               |   |   | 189,415   |   |   |   | 169,334 |   |
| Total liabilities and stockholders’ equity                                                                                                         |   | $      | 1,723,952 |   |   | $      | 1,835,090 |   |

----

|                                                  |   | 2010   |    |                                        | 2009   |   |    | 2008   |   |
|-------------------------------------------------------|--------|--------|---------|---------------------------------------------|--------|--------|---------|--------|--------|
| Interest income                                       |   |   |    |                                        |   |   |    |   |   |
| Loans, including fees                                 |   | $      | 77,559  |                                        |   | $      | 83,970  |   |   | $ | 93,217 |   |
| Taxable securities                                    |   |   | 7,338   |                                        |   |   | 8,971   |   |   |   | 4,983 |   |
| Tax exempt securities                                 |   |   | 854     |                                        |   |   | 878     |   |   |   | 818 |   |
| Federal funds sold and other                          |   |   | 656     |                                        |   |   | 647     |   |   |   | 1,089 |   |
|                                                  |   |   | 86,407  |                                        |   |   | 94,466  |   |   |   | 100,107 |   |
|                                                  |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Interest expense                                      |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Deposits                                              |   |   | 25,392  |                                        |   |   | 35,088  |   |   |   | 45,073 |   |
| Federal Home Loan Bank advances                       |   |   | 2,015   |                                        |   |   | 3,691   |   |   |   | 5,589 |   |
| Junior subordinated debentures                        |   |   | 639     |                                        |   |   | 795     |   |   |   | 1,368 |   |
| Subordinated capital note                             |   |   | 311     |                                        |   |   | 362     |   |   |   | 296 |   |
| Federal funds purchased and other                     |   |   | 484     |                                        |   |   | 476     |   |   |   | 555 |   |
|                                                  |   |   | 28,841  |                                        |   |   | 40,412  |   |   |   | 52,881 |   |
| Net interest income                                   |   |   | 57,566  |                                        |   |   | 54,054  |   |   |   | 47,226 |   |
| Provision for loan losses                             |   |   | 30,100  |                                        |   |   | 14,200  |   |   |   | 5,400 |   |
| Net interest income after provision for loan losses   |   |   | 27,466  |                                        |   |   | 39,854  |   |   |   | 41,826 |   |
|                                                  |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Non-interest income                                   |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Service charges on deposit accounts                   |   |   | 2,984   |                                        |   |   | 3,112   |   |   |   | 3,424 |   |
| Income from fiduciary activities                      |   |   | 987     |                                        |   |   | 875     |   |   |   | 1,079 |   |
| Secondary market brokerage fees                       |   |   | 327     |                                        |   |   | 235     |   |   |   | 365 |   |
| Title insurance commissions                           |   |   | 160     |                                        |   |   | 130     |   |   |   | 157 |   |
| Net gain on sales of loans originated for sale        |   |   | 554     |                                        |   |   | 411     |   |   |   | — |   |
| Net (loss) gain on sales of securities                |   |   | 5,152   |                                        |   |   | 315     |   |   |   | (136 | )   |
| Other-than-temporary impairment loss                  |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Total impairment loss                                 |   |   | (597    | )                                      |   |   | — |   |   |   | (471 | )         |
| Loss recognized in other comprehensive income         |   |   | — |                                        |   |   | — |   |   |   | — |   |
| Net impairment loss recognized in earnings            |   |   | (597    | )                                      |   |   | — |   |   |   | (471 | )         |
| Gain on sale of branch                                |   |   | — |                                        |   |   | — |   |   |   | 410 |   |
| Other                                                 |   |   | 2,015   |                                        |   |   | 2,016   |   |   |   | 2,040 |   |
|                                                  |   |   | 11,582  |                                        |   |   | 7,094   |   |   |   | 6,868 |   |
|                                                  |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Non-interest expense                                  |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Salaries and employee benefits                        |   |   | 14,903  |                                        |   |   | 15,009  |   |   |   | 14,792 |   |
| Occupancy and equipment                               |   |   | 4,095   |                                        |   |   | 3,918   |   |   |   | 3,587 |   |
| Other real estate owned expense                       |   |   | 16,254  |                                        |   |   | 1,155   |   |   |   | 881 |   |
| FDIC insurance                                        |   |   | 2,971   |                                        |   |   | 2,984   |   |   |   | 1,051 |   |
| State franchise tax                                   |   |   | 2,172   |                                        |   |   | 1,800   |   |   |   | 1,740 |   |
| Professional fees                                     |   |   | 1,067   |                                        |   |   | 901     |   |   |   | 787 |   |
| Communications                                        |   |   | 737     |                                        |   |   | 729     |   |   |   | 711 |   |
| Postage and delivery                                  |   |   | 722     |                                        |   |   | 752     |   |   |   | 748 |   |
| Advertising                                           |   |   | 408     |                                        |   |   | 492     |   |   |   | 463 |   |
| Other                                                 |   |   | 3,149   |                                        |   |   | 2,716   |   |   |   | 2,997 |   |
|                                                  |   |   | 46,478  |                                        |   |   | 30,456  |   |   |   | 27,757 |   |
| Income (loss) before income taxes                     |   |   | (7,430  | )                                           |   |   | 16,492  |   |   |   | 20,937 |   |
| Income tax expense (benefit)                          |   |   | (3,046  | )                                           |   |   | 5,424   |   |   |   | 6,927 |   |
| Net income (loss)                                     |   |   | (4,384  | )                                           |   |   | 11,068  |   |   |   | 14,010 |   |
| Less:                                                 |   |   |    |                                        |   |   |    |   |   |   |   |   |
| Dividends on preferred stock                          |   |   | (1,810  | )                                           |   |   | (1,750  | )      |   |   | (194 | )   |
| Accretion on Series A preferred stock                 |   |   | (177    | )                                           |   |   | (176    | )      |   |   | (20 | )   |
| (Earnings) loss allocated to participating securities |   |   | 184     |                                        |   |   | (97     | )      |   |   | (94 | )   |
| Net income (loss) available to common shareholders    |   | $      | (6,187  | )        |   | $      | 9,045   |   |   | $ | 13,702 |   |
| Basic earnings (loss) per common share                |   | $      | (0.60   | )                                           |   | $      | 1.00    |   |   | $ | 1.51 |   |
| Diluted earnings (loss) per common share              |   | $      | (0.60   | )                                           |   | $      | 1.00    |   |   | $ | 1.51 |   |

----

|                                                                                                                                                                                                                                                                   |   | Shares                   |      |   | Amount                        |   |    |                          |   |   |                          |   |   |                     |    |   |                          |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-----------|--------|-------------------------------|--------|---------|-------------------------------|--------|--------|-------------------------------|--------|--------|--------------------------|---------|--------|-------------------------------|--------|
|                                                                                                                                                                                                                                                                   |   |                     |      |   |                          |   |    |                          |   |   |                          |   |   |                     |    |   |                          |   |
|                                                                                                                                                                                                                                                                   |   |    Common |      |   |   Series APreferred |   |    |   Series BPreferred |   |   |   Series CPreferred |   |   |    Common |    |   |   Series APreferred |   |   |   Series BPreferred |   |   |   Series CPreferred |   |   | AdditionalPaid-InCapital |   |   |  RetainedEarnings |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   |    Total |   |
| Balances, January 1, 2008                                                                                                                                                                                                                                              |   |                     | 7,881,206 |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          | $      | 70,747 |   |   |   | — |   |   |   | — |   |   |   | — |   |   | $ | 11,270 |   |   | $ | 40,351 |   |   | $ | (79 | ) |   | $ | 122,289 |   |
| Issuance of preferred stock and a common stock warrant                                                                                                                                                                                                                 |   |                     | —   |   |                          |   | 35,000  |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | 34,111 |   |   |   | — |   |   |   | — |   |   |   | 889 |   |   |   | — |   |   |   | — |   |   |   | 35,000 |   |
| Issuance of unvested stock                                                                                                                                                                                                                                             |   |                     | 31,952    |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Forfeited unvested stock                                                                                                                                                                                                                                               |   |                     | (2,731    | )      |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Shares repurchased                                                                                                                                                                                                                                                     |   |                     | (17,371   | )      |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | (301 | )  |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (301 | ) |
| Stock-based compensation expense                                                                                                                                                                                                                                       |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 296 |   |   |   | — |   |   |   | — |   |   |   | 296 |   |
| Comprehensive income:                                                                                                                                                                                                                                                  |   |                     |      |   |                          |   |    |                          |   |   |                          |   |   |                     |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 14,010 |   |   |   | — |   |   |   | 14,010 |   |
| Changes in net unrealized gain (loss) on securities available for sale, net of reclassification and tax effects                                                                                                                                                        |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (176 | ) |   |   | (176 | ) |
|         Total comprehensive income                                                                                                                                                                                             |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 13,834 |   |
| Dividends 5% on Series A preferred stock                                                                                                                                                                                                                               |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (194 | )   |   |   | — |   |   |   | (194 | ) |
| Amortization of Series A preferred stock discount                                                                                                                                                                                                                      |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | 20 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (20 | )   |   |   | — |   |   |   | — |   |
| Cash dividends declared ($0.73 per share)                                                                                                                                                                                                                              |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (6,711 | ) |   |   | — |   |   |   | (6,711 | ) |
| 5% stock dividend declared                                                                                                                                                                                                                                             |   |                     | 394,877   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | 6,451 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 1,028 |   |   |   | (7,479 | ) |   |   | — |   |   |   | — |   |
| Balances, December 31, 2008                                                                                                                                                                                                                                       |   |                     | 8,287,933 |   |                          |   | 35,000  |                          |   |   | —                       |   |   |                     | — |   |                          |   | 76,897 |   |   |   | 34,131 |   |   |   | — |   |   |   | — |   |   |   | 13,483 |   |   |   | 39,957 |   |   |   | (255 | ) |   |   | 164,213 |   |
| Issuance of unvested stock                                                                                                                                                                                                                                             |   |                     | 51,684    |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Forfeited unvested stock                                                                                                                                                                                                                                               |   |                     | (515      | )      |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Stock-based compensation expense                                                                                                                                                                                                                                       |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 388 |   |   |   | — |   |   |   | — |   |   |   | 388 |   |
| Comprehensive income:                                                                                                                                                                                                                                                  |   |                     |      |   |                          |   |    |                          |   |   |                          |   |   |                     |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                                                                                                                                                                             |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 11,068 |   |   |   | — |   |   |   | 11,068 |   |
| Changes in net unrealized gain (loss) on securities available for sale, net of reclassification and tax effects                                                                                                                                                        |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 2,408 |   |   |   | 2,408 |   |
| Total comprehensive income                                                                                                                                                                                                                                             |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 13,476 |   |
| Dividends 5%on Series A preferred stock                                                                                                                                                                                                                                |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (1,750 | )   |   |   | — |   |   |   | (1,750 | )  |
| Amortization of Series A preferred stock discount                                                                                                                                                                                                                      |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | 176 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (176 | )   |   |   | — |   |   |   | — |   |
| Cash dividends declared ($0.76 per share)                                                                                                                                                                                                                              |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (6,993 | ) |   |   | — |   |   |   | (6,993 | ) |
| 5% stock dividend declared                                                                                                                                                                                                                                             |   |                     | 417,338   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | 6,207 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 1,088 |   |   |   | (7,295 | ) |   |   | — |   |   |   | — |   |
| Balances, December 31, 2009                                                                                                                                                                                                                                       |   |                     | 8,756,440 |   |                          |   | 35,000  |                          |   |   | —                       |   |   |                     | — |   |                          |   | 83,104 |   |   |   | 34,307 |   |   |   | — |   |   |   | — |   |   |   | 14,959 |   |   |   | 34,811  |   |   |   | 2,153 |   |   |   | 169,334 |   |
| Issuance of stock and warrants in private placement                                                                                                                                                                                                                    |   |                     | 1,820,531 |   |                          |   | — |                          |   |   | 597,000                       |   |   |                     | 365,080 |   |                          |   | 17,429 |   |   |   | — |   |   |   | 6,182 |   |   |   | 3,780 |   |   |   | 3,149 |   |   |   | — |   |   |   | — |   |   |   | 30,540 |   |
| Conversion of Series B preferred to common                                                                                                                                                                                                                             |   |                     | 597,000   |   |                          |   | — |                          |   |   | (597,000                      | )      |   |                     | — |   |                          |   | 6,182 |   |   |   | — |   |   |   | (6,182 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Conversion of Series C preferred to common                                                                                                                                                                                                                             |   |                     | 48,038    |   |                          |   | — |                          |   |   | —                       |   |   |                     | (48,038 | )      |                          |   | 497 |   |   |   | — |   |   |   | — |   |   |   | (497 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Issuance of unvested stock                                                                                                                                                                                                                                             |   |                     | 69,182    |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Forfeited unvested stock                                                                                                                                                                                                                                               |   |                     | (9,566    | )      |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Stock-based compensation expense                                                                                                                                                                                                                                       |   |                     | —   |   |                          |   | — |                          |   |   | —                       |   |   |                     | — |   |                          |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 482 |   |   |   | — |   |   |   | — |   |   |   | 482 |   |

----

|                                                                                                            |   |   | Shares     |   |   |   | Amount            |   |   |   |              |   |   |   |              |   |   |   |    |   |   |   |              |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-------------------|--------|--------|--------|-------------------|--------|--------|--------|-------------------|--------|--------|--------|---------|--------|--------|--------|-------------------|--------|
|                                                                                                            |   |   |       |   |   |   |              |   |   |   |              |   |   |   |              |   |   |   |    |   |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |   | Common     |   |   |   | Series APreferred |   |   |   | Series BPreferred |   |   |   | Series CPreferred |   |   |   | Common  |   |   |   | Series APreferred |   |   |   | Series BPreferred |   |   |   | Series CPreferred |   |   |   | AdditionalPaid-InCapital |   |   |   | RetainedEarnings |   |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   |   | Total |   |
| Comprehensive income:                                                                                           |   |   |       |   |   |   |              |   |   |   |              |   |   |   |              |   |   |   |    |   |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                        |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (4,384 | )  |   |   | — |   |   |   | (4,384 | ) |
| Changes in net unrealized gain (loss) on securities available for sale, net of reclassification and tax effects |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (1 | ) |   |   | (1 | ) |
| Total comprehensive income (loss)                                                                               |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (4,385 | ) |
| Dividends 5% on Series A preferred stock                                                                        |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (1,750 | ) |   |   | — |   |   |   | (1,750 | ) |
| Dividends on Series B preferred stock ($0.10 per share)                                                         |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (60 | ) |   |   | — |   |   |   | (60 | ) |
| Dividends on Series C preferred stock ($0.10 per share)                                                         |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (40 | ) |   |   | — |   |   |   | (40 | ) |
| Amortization of Series A preferred stock discount                                                               |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | 177               |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (177 | ) |   |   | — |   |   |   | — |   |
| Cash dividends declared ($0.49 per share)                                                                       |   |   | —    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | — |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (4,706 | ) |   |   | — |   |   |   | (4,706 | ) |
| 5% stock dividend declared                                                                                      |   |   | 564,482    |   |   |   | —           |   |   |   | —           |   |   |   | —           |   |   |   | 5,024   |   |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | 848 |   |   |   | (5,872 | )  |   |   | — |   |   |   | — |   |
| Balances, December 31, 2010                                                                                |   |   | 11,846,107 |   |   |   | 35,000            |   |   |   | —           |   |   |   | 317,042           |   |   | $      | 112,236 |   |   | $      | 34,484            |   |   |   | — |   |   | $ | 3,283 |   |   | $ | 19,438 |   |   | $ | 17,822 |   |   | $ | 2,152 |   |   | $ | 189,415 |   |

----

|                                                                      |   | 2010   |     |   | 2009   |   |     | 2008   |   |
|---------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
| Cash flows from operating activities                                      |   |   |     |   |   |   |     |   |   |
| Net income (loss)                                                         |   | $      | (4,384   | )      |   | $      | 11,068   |   |   | $ | 14,010 |   |
| Adjustments to reconcile net income to net cash from operating activities |   |   |     |   |   |   |     |   |   |   |   |   |
| Depreciation and amortization                                             |   |   | 2,926    |   |   |   | 3,464    |   |   |   | 3,664 |   |
| Provision for loan losses                                                 |   |   | 30,100   |   |   |   | 14,200   |   |   |   | 5,400 |   |
| Net accretion on securities                                               |   |   | (9       | )      |   |   | (558     | )      |   |   | (53 | ) |
| Stock-based compensation expense                                          |   |   | 467      |   |   |   | 386      |   |   |   | 280 |   |
| Deferred income taxes                                                     |   |   | (7,898   | )      |   |   | (2,574   | )      |   |   | (486 | ) |
| Net gain on sales of loans originated for sale                            |   |   | (554     | )      |   |   | (411     | )      |   |   | — |   |
| Loans originated for sale                                                 |   |   | (28,165  | )      |   |   | (20,529  | )      |   |   | — |   |
| Proceeds from sales of loans originated for sale                          |   |   | 28,467   |   |   |   | 20,439   |   |   |   | — |   |
| Net loss on sales of other real estate owned                              |   |   | 565      |   |   |   | 190      |   |   |   | 263 |   |
| Net write-down of other real estate owned                                 |   |   | 14,062   |   |   |   | 500      |   |   |   | 478 |   |
| Net realized (gain) loss on sales of investment securities                |   |   | (4,555   | )      |   |   | (315     | )      |   |   | 607 |   |
| Net gain on sale of branch                                                |   |   | —  |   |   |   | —  |   |   |   | (410 | ) |
| Earnings on bank owned life insurance                                     |   |   | (296     | )      |   |   | (283     | )      |   |   | (300 | ) |
| Federal Home Loan Bank stock dividends                                    |   |   | —  |   |   |   | —  |   |   |   | (393 | ) |
| Net change in accrued interest receivable and other assets                |   |   | 3,667    |   |   |   | (5,531   | )      |   |   | 2,097 |   |
| Net change in accrued interest payable and other liabilities              |   |   | (485     | )      |   |   | (2,398   | )      |   |   | (942 | ) |
| Net cash from operating activities                                        |   |   | 33,908   |   |   |   | 17,648   |   |   |   | 24,215 |   |
|                                                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash flows from investing activities                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Net change in interest-bearing deposits with banks                        |   |   | —  |   |   |   | 600      |   |   |   | — |   |
| Purchases of available-for-sale securities                                |   |   | (55,750  | )      |   |   | (36,979  | )      |   |   | (92,280 | ) |
| Sales and calls of available-for-sale securities                          |   |   | 96,808   |   |   |   | 13,813   |   |   |   | 24,339 |   |
| Maturities and prepayments of available-for-sale securities               |   |   | 25,917   |   |   |   | 32,100   |   |   |   | 22,075 |   |
| Proceeds from sale of other real estate owned                             |   |   | 15,284   |   |   |   | 13,121   |   |   |   | 12,119 |   |
| Improvements to other real estate owned                                   |   |   | (1,947   | )      |   |   | (293     | )      |   |   | (386 | ) |
| Loan originations and payments, net                                       |   |   | 6,160    |   |   |   | (92,248  | )      |   |   | (82,186 | ) |
| Purchases of premises and equipment, net                                  |   |   | (368     | )      |   |   | (2,605   | )      |   |   | (2,415 | ) |
| Redemption of bank owned life insurance                                   |   |   | —  |   |   |   | —  |   |   |   | 2,179 |   |
| Acquisition of Paramount Bank, net                                        |   |   | —  |   |   |   | —  |   |   |   | (5,215 | ) |
| Disposal of Burkesville branch, net                                       |   |   | —  |   |   |   | —  |   |   |   | (8,904 | ) |
| Net cash from investing activities                                        |   |   | 86,104   |   |   |   | (72,491  | )      |   |   | (130,674 | ) |
|                                                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash flows from financing activities                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Net change in deposits                                                    |   |   | (62,428  | )      |   |   | 241,547  |   |   |   | 59,416 |   |
| Net change in repurchase agreements                                       |   |   | 99       |   |   |   | 1,433    |   |   |   | (1,201 | ) |
| Repayment of Federal Home Loan Bank advances                              |   |   | (307,958 | )      |   |   | (299,796 | )      |   |   | (53,991 | ) |
| Advances from Federal Home Loan Bank                                      |   |   | 240,000  |   |   |   | 240,000  |   |   |   | 75,000 |   |
| Proceeds from subordinated capital note                                   |   |   | —  |   |   |   | —  |   |   |   | 9,000 |   |
| Repayment of subordinated capital note                                    |   |   | (450     | )      |   |   | —  |   |   |   | — |   |
| Issuance of preferred stock and warrants, net                             |   |   | 11,064   |   |   |   | —  |   |   |   | 35,000 |   |
| Issuance of common stock and warrants, net                                |   |   | 19,476   |   |   |   | —  |   |   |   | — |   |
| Repurchase of common stock                                                |   |   | —  |   |   |   | —  |   |   |   | (301 | ) |
| Cash dividends paid on preferred stock                                    |   |   | (1,847   | )      |   |   | (1,721   | )      |   |   | (194 | ) |
| Cash dividends paid on common stock                                       |   |   | (4,706   | )      |   |   | (6,993   | )      |   |   | (6,711 | ) |
| Net cash from financing activities                                        |   |   | (106,750 | )      |   |   | 174,470  |   |   |   | 116,018 |   |
| Net change in cash and cash equivalents                                   |   |   | 13,262   |   |   |   | 119,627  |   |   |   | 9,559 |   |
| Beginning cash and cash equivalents                                       |   |   | 172,173  |   |   |   | 52,546   |   |   |   | 42,987 |   |
| Ending cash and cash equivalents                                          |   | $      | 185,435  |   |   | $      | 172,173  |   |   | $ | 52,546 |   |
| Supplemental cash flow information:                                       |   |   |     |   |   |   |     |   |   |   |   |   |
| Interest paid                                                             |   | $      | 29,637   |   |   | $      | 41,055   |   |   | $ | 53,322 |   |
| Income taxes paid                                                         |   |   | 4,850    |   |   |   | 8,150    |   |   |   | 6,700 |   |
| Supplemental non-cash disclosure:                                         |   |   |     |   |   |   |     |   |   |   |   |   |
| Transfer from loans to other real estate                                  |   | $      | 90,787   |   |   | $      | 20,534   |   |   | $ | 16,004 |   |
| Financed sales of other real estate owned                                 |   |   | 9,736    |   |   |   | —  |   |   |   | — |   |
| 5% Stock dividend                                                         |   |   | 5,872    |   |   |   | 7,295    |   |   |   | 7,479 |   |

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|                   |   | December 31, 2010 |     |
|------------------------|--------|------------------------|----------|
|                   |   | Options                |     |   | WeightedAverageExercisePrice |   |
| Outstanding, beginning |   |                   | 312,227  |   |   | $ | 21.80 |   |
| Forfeited              |   |                   | (16,797  | ) |   |   | 21.55 |   |
| Expired                |   |                   | (208,961 | ) |   |   | 22.27 |   |
| Outstanding, ending    |   |                   | 86,469   |   |   | $ | 20.72 |   |

|                                            |   | December 31, 2010 |   |
|-------------------------------------------------|--------|-----------------------------|--------|
| Stock options vested and currently exercisable: |   |                        | 86,412 |   |
| Weighted average exercise price                 |   | $                           | 20.72  |   |
| Aggregate intrinsic value                       |   | $                           | 0      |   |
| Weighted average remaining life (in years)      |   |                        | 0.8    |   |
| Total Options Outstanding:                      |   |                        | 86,469 |   |
| Aggregate intrinsic value                       |   | $                           | 0      |   |
| Weighted average remaining life (in years)      |   |                        | 0.8    |   |

|                   |   | December 31, 2010 |    |
|------------------------|--------|------------------------|---------|
|                   |   | Shares                 |    |   | WeightedAverageGrantPrice |   |
| Outstanding, beginning |   |                   | 119,598 |   |   | $ | 15.00 |   |
| Granted                |   |                   | 72,655  |   |   |   | 11.11 |   |
| Vested                 |   |                   | (24,505 | ) |   |   | 14.46 |   |
| Forfeited              |   |                   | (10,051 | ) |   |   | 12.78 |   |
| Outstanding, ending    |   |                   | 157,697 |   |   | $ | 13.43 |   |

----

| 2011                  |   | $      | 487 |   |
|-----------------------|--------|--------|-----|--------|
| 2012                  |   |   | 477 |   |
| 2013                  |   |   | 389 |   |
| 2014                  |   |   | 273 |   |
| 2015 & thereafter |   |   | 174 |   |

|                                       |   | Amortized Cost |    |   | Gross Unrealized Gains |   |    | Gross Unrealized Losses |   |   | Fair Value |   |
|--------------------------------------------|--------|----------------|---------|--------|------------------------|--------|---------|-------------------------|--------|--------|------------|--------|
|                                       |   | (in thousands) |    |
| December 31, 2010                     |   |           |    |   |                   |   |    |                    |   |   |       |   |
| U.S. Government and federal agency         |   | $              | 5,973   |   |                   | $      | 37      |                    |   | $      | —    |   |   | $ | 6,010 |   |
| State and municipal                        |   |           | 26,039  |   |                   |   | 995     |                    |   |   | (32        | )      |   |   | 27,002 |   |
| Agency mortgage-backed: residential        |   |           | 60,270  |   |                   |   | 1,590   |                    |   |   | (5         | )      |   |   | 61,855 |   |
| Corporate bonds                            |   |           | 8,744   |   |                   |   | 507     |                    |   |   | (32        | )      |   |   | 9,219 |   |
| Other debt securities                      |   |           | 572     |   |                   |   | — |                    |   |   | —    |   |   |   | 572 |   |
| Total debt securities                      |   |           | 101,598 |   |                   |   | 3,129   |                    |   |   | (69        | )      |   |   | 104,658 |   |
| Equity                                     |   |           | 1,400   |   |                   |   | 254     |                    |   |   | (3         | )      |   |   | 1,651 |   |
| Total                                      |   | $              | 102,998 |   |                   | $      | 3,383   |                    |   | $      | (72        | )      |   | $ | 106,309 |   |
|                                       |   |           |    |   |                   |   |    |                    |   |   |       |   |   |   |   |   |
| December 31, 2009                     |   |           |    |   |                   |   |    |                    |   |   |       |   |   |   |   |   |
| U.S. Government and federal agency         |   | $              | 586     |   |                   | $      | 33      |                    |   | $      | —    |   |   | $ | 619 |   |
| State and municipal                        |   |           | 24,537  |   |                   |   | 955     |                    |   |   | (37        | )      |   |   | 25,455 |   |
| Agency mortgage-backed: residential        |   |           | 91,127  |   |                   |   | 4,028   |                    |   |   | —    |   |   |   | 95,155 |   |
| Private label mortgage-backed: residential |   |           | 33,516  |   |                   |   | 279     |                    |   |   | (2,156     | )      |   |   | 31,639 |   |
| Corporate bonds                            |   |           | 13,054  |   |                   |   | 760     |                    |   |   | (49        | )      |   |   | 13,765 |   |
| Other debt securities                      |   |           | 704     |   |                   |   | — |                    |   |   | (175       | )      |   |   | 529 |   |
| Total debt securities                      |   |           | 163,524 |   |                   |   | 6,055   |                    |   |   | (2,417     | )      |   |   | 167,162 |   |
| Equity                                     |   |           | 1,885   |   |                   |   | 75      |                    |   |   | (401       | )      |   |   | 1,559 |   |
| Total                                      |   | $              | 165,409 |   |                   | $      | 6,130   |                    |   | $      | (2,818     | )      |   | $ | 168,721 |   |

|         |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|--------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|         |   | (in thousands) |   |
| Proceeds     |   | $              | 96,808 |   |   | $      | 13,813 |   |   | $ | 24,339 |   |
| Gross gains  |   |           | 6,079  |   |   |   | 321    |   |   |   | 625 |   |
| Gross losses |   |           | 927    |   |   |   | 6      |   |   |   | 761 |   |

----

|                                                                                      |   | December 31, 2010   |    |
|-------------------------------------------------------------------------------------------|--------|---------------------|---------|
|                                                                                      |   | Amortized Cost |    |   | Fair Value |   |
|                                                                                      |   | (in thousands) |    |
| Maturity                                                                                  |   |                |    |   |   |   |
| Available-for-sale                                                                        |   |                |    |   |   |   |
| Within one year                                                                           |   | $                   | 1,855   |   |   | $ | 1,870 |   |
| One to five years                                                                         |   |                | 8,742   |   |   |   | 9,273 |   |
| Five to ten years                                                                         |   |                | 21,398  |   |   |   | 22,238 |   |
| Beyond ten years                                                                          |   |                | 9,333   |   |   |   | 9,422 |   |
| Mortgage-backed                                                                           |   |                | 60,270  |   |   |   | 61,855 |   |
|               Total |   | $                   | 101,598 |   |   | $ | 104,658 |   |

|                                       |   | Less than 12 Months |    |   | 12 Months or More |   |    | Total     |   |
|--------------------------------------------|--------|---------------------|---------|--------|-------------------|--------|---------|-----------|--------|
| Description of Securities                  |   | FairValue           |    |   | UnrealizedLoss    |   |    | FairValue |   |   | UnrealizedLoss |   |   | FairValue |   |   | UnrealizedLoss |   |
|                                       |   | (in thousands)      |    |
| 2010                                       |   |                |    |   |              |   |    |      |   |   |   |   |   |   |   |   |   |   |
| State and municipal                        |   | $                   | 3,119   |   |              | $      | (32     | )         |   | $ | — |   |   | $ | — |   |   | $ | 3,119 |   |   | $ | (32 | ) |
| Agency mortgage-backed: residential        |   |                | 1,060   |   |              |   | (5      | )         |   |   | — |   |   |   | — |   |   |   | 1,060 |   |   |   | (5 | ) |
| Corporate bonds                            |   |                | 995     |   |              |   | (32     | )         |   |   | — |   |   |   | — |   |   |   | 995 |   |   |   | (32 | ) |
| Equity                                     |   |                | 27      |   |              |   | (1      | )         |   |   | 74 |   |   |   | (2 | ) |   |   | 101 |   |   |   | (3 | ) |
| Total temporarily impaired                 |   | $                   | 5,201   |   |              | $      | (70     | )         |   | $ | 74 |   |   | $ | (2 | ) |   | $ | 5,275 |   |   | $ | (72 | ) |
|                                       |   |                |    |   |              |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                       |   |                |    |   |              |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State and municipal                        |   | $                   | 867     |   |              | $      | (5      | )         |   | $ | 1,033 |   |   | $ | (32 | ) |   | $ | 1,900 |   |   | $ | (37 | ) |
| Agency mortgage-backed: residential        |   |                | 8       |   |              |   | — |      |   |   | — |   |   |   | — |   |   |   | 8 |   |   |   | — |   |
| Private label mortgage-backed: residential |   |                | 23,731  |   |              |   | (1,977  | )         |   |   | 4,091 |   |   |   | (179 | ) |   |   | 27,822 |   |   |   | (2,156 | ) |
| Corporate bonds                            |   |                | — |   |              |   | — |      |   |   | 1,997 |   |   |   | (49 | ) |   |   | 1,997 |   |   |   | (49 | ) |
| Other                                      |   |                | 529     |   |              |   | (175    | )         |   |   | — |   |   |   | — |   |   |   | 529 |   |   |   | (175 | ) |
| Equity                                     |   |                | 46      |   |              |   | (12     | )         |   |   | 701 |   |   |   | (389 | ) |   |   | 747 |   |   |   | (401 | ) |
| Total temporarily impaired                 |   | $                   | 25,181  |   |              | $      | (2,169  | )         |   | $ | 7,822 |   |   | $ | (649 | ) |   | $ | 33,003 |   |   | $ | (2,818 | ) |

----

|                            |   | 2010           |      |   | 2009   |   |
|---------------------------------|--------|----------------|-----------|--------|--------|--------|
|                            |   | (in thousands) |      |
| Commercial                      |   | $              | 90,290    |   |   | $      | 89,903 |   |
| Commercial Real Estate:         |   |           |      |   |   |   |   |   |
| Construction                    |   |           | 199,524   |   |   |   | 304,230 |   |
| Farmland                        |   |           | 85,523    |   |   |   | 83,898 |   |
| Other                           |   |           | 441,844   |   |   |   | 451,945 |   |
| Residential Real Estate:        |   |           |      |   |   |   |   |   |
| Multi-family                    |   |           | 74,919    |   |   |   | 65,043 |   |
| Other                           |   |           | 353,418   |   |   |   | 354,358 |   |
| Consumer                        |   |           | 31,913    |   |   |   | 36,989 |   |
| Agriculture                     |   |           | 24,177    |   |   |   | 25,064 |   |
| Other                           |   |           | 1,060     |   |   |   | 1,488 |   |
| Subtotal                        |   |           | 1,302,668 |   |   |   | 1,412,918 |   |
| Less: Allowance for loan losses |   |           | (34,285   | )      |   |   | (26,392 | ) |
| Loans, net                      |   | $              | 1,268,383 |   |   | $      | 1,386,526 |   |

|                         |   | 2010           |    |   | 2009   |   |    | 2008   |   |
|------------------------------|--------|----------------|---------|--------|--------|--------|---------|--------|--------|
|                         |   | (in thousands) |    |
| Beginning balance            |   | $              | 26,392  |   |   | $      | 19,652  |   |   | $ | 16,342 |   |
| Acquired in bank acquisition |   |           | — |   |   |   | — |   |   |   | 1,421 |   |
| Provision for loan losses    |   |           | 30,100  |   |   |   | 14,200  |   |   |   | 5,400 |   |
| Loans charged-off            |   |           | (22,461 | )      |   |   | (7,731  | )      |   |   | (3,834 | ) |
| Loan recoveries              |   |           | 254     |   |   |   | 271     |   |   |   | 323 |   |
| Ending balance               |   | $              | 34,285  |   |   | $      | 26,392  |   |   | $ | 19,652 |   |

----

|                                            |   | Commercial |   |   | CommercialReal Estate |   |    | ResidentialReal Estate |   |   | Consumer |   |   | Agriculture |    |   | Other  |   |    | Total  |   |
|-------------------------------------------------|--------|------------|--------|--------|-----------------------|--------|---------|------------------------|--------|--------|----------|--------|--------|-------------|---------|--------|--------|--------|---------|--------|--------|
|                                            |   |       |   |   |                  |   |    |                   |   |   |     |   |   |        |    |   |   |   |    |   |   |
| Allowance for loan losses:                      |   |       |   |   |                  |   |    |                   |   |   |     |   |   |        |    |   |   |   |    |   |   |
| Ending allowance balance attributable to loans: |   |       |   |   |                  |   |    |                   |   |   |     |   |   |        |    |   |   |   |    |   |   |
| Individually evaluated for impairment           |   | $          | 23     |   |                  | $      | 5,096   |                   |   | $      | —  |   |   | $           | — |   |   | $      | — |   |   | $ | — |   |   | $ | 5,119 |   |
| Collectively evaluated for impairment           |   |       | 2,124  |   |                  |   | 18,979  |                   |   |   | 7,224    |   |   |        | 701     |   |   |   | 134     |   |   |   | 4 |   |   |   | 29,166 |   |
| Total ending allowance balance                  |   | $          | 2,147  |   |                  | $      | 24,075  |                   |   | $      | 7,224    |   |   | $           | 701     |   |   | $      | 134     |   |   | $ | 4 |   |   | $ | 34,285 |   |
|                                            |   |       |   |   |                  |   |    |                   |   |   |     |   |   |        |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Loans:                                          |   |       |   |   |                  |   |    |                   |   |   |     |   |   |        |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated for impairment     |   | $          | 3,673  |   |                  | $      | 51,223  |                   |   | $      | 16,718   |   |   | $           | — |   |   | $      | 112     |   |   | $ |   — |   |   | $ | 71,726 |   |
| Loans collectively evaluated for impairment     |   |       | 86,617 |   |                  |   | 675,668 |                   |   |   | 411,619  |   |   |        | 31,913  |   |   |   | 24,065  |   |   |   | 1,060 |   |   |   | 1,230,942 |   |
| Total ending loans balance                      |   | $          | 90,290 |   |                  | $      | 726,891 |                   |   | $      | 428,337  |   |   | $           | 31,913  |   |   | $      | 24,177  |   |   | $ | 1,060 |   |   | $ | 1,302,668 |   |

|                                              |   | 2010           |   |   | 2009   |   |
|---------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                              |   | (in thousands) |   |
| Loans with no allocated allowance for loan losses |   | $              | 41,885 |   |   | $      | 21,373 |   |
| Loans with allocated allowance for loan losses    |   |           | 29,841 |   |   |   | 84,766 |   |
| Total                                             |   | $              | 71,726 |   |   | $      | 106,139 |   |
| Amount of the allowance for loan losses allocated |   | $              | 5,119  |   |   | $      | 5,453 |   |

|                                         |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|----------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                         |   | (in thousands) |   |
| Average of impaired loans during the year    |   | $              | 69,167 |   |   | $      | 44,041 |   |   | $ | 19,066 |   |
| Interest income recognized during impairment |   |           | 1,358  |   |   |   | 1,094  |   |   |   | 793 |   |
| Cash basis interest income recognized        |   |           | 115    |   |   |   | 987    |   |   |   | 647 |   |

----

|                                |   | UnpaidPrincipalBalance |    |   | RecordedInvestment |   |    | AllowanceFor LoanLossesAllocated |   |
|-------------------------------------|--------|------------------------|---------|--------|--------------------|--------|---------|----------------------------------|--------|
|                                |   | (in thousands)         |    |
| With No Related Allowance Recorded: |   |                   |    |   |               |   |    |                             |   |
| Commercial                          |   | $                      | 2,559   |   |               | $      | 2,523   |                             |   | $ | — |   |
| Commercial real estate:             |   |                   |    |   |               |   |    |                             |   |   |   |   |
| Construction                        |   |                   | 3,269   |   |               |   | 3,268   |                             |   |   | — |   |
| Farmland                            |   |                   | 6,745   |   |               |   | 6,746   |                             |   |   | — |   |
| Other                               |   |                   | 12,662  |   |               |   | 12,518  |                             |   |   | — |   |
| Residential real estate:            |   |                   |    |   |               |   |    |                             |   |   |   |   |
| Multi-family                        |   |                   | 3,929   |   |               |   | 3,929   |                             |   |   | — |   |
| Other                               |   |                   | 13,303  |   |               |   | 12,789  |                             |   |   | — |   |
| Consumer                            |   |                   | — |   |               |   | — |                             |   |   | — |   |
| Agriculture                         |   |                   | 119     |   |               |   | 112     |                             |   |   | — |   |
| Other                               |   |                   | — |   |               |   | — |                             |   |   | — |   |
| With An Allowance Recorded:         |   |                   |    |   |               |   |    |                             |   |   |   |   |
| Commercial                          |   |                   | 1,150   |   |               |   | 1,150   |                             |   |   | 23 |   |
| Commercial real estate:             |   |                   |    |   |               |   |    |                             |   |   |   |   |
| Construction                        |   |                   | 13,314  |   |               |   | 10,645  |                             |   |   | 1,923 |   |
| Farmland                            |   |                   | 1,234   |   |               |   | 1,234   |                             |   |   | 89 |   |
| Other                               |   |                   | 16,912  |   |               |   | 16,812  |                             |   |   | 3,084 |   |
| Residential real estate:            |   |                   |    |   |               |   |    |                             |   |   |   |   |
| Multi-family                        |   |                   | — |   |               |   | — |                             |   |   | — |   |
| Other                               |   |                   | — |   |               |   | — |                             |   |   | — |   |
| Consumer                            |   |                   | — |   |               |   | — |                             |   |   | — |   |
| Agriculture                         |   |                   | — |   |               |   | — |                             |   |   | — |   |
| Other                               |   |                   | — |   |               |   | — |                             |   |   | — |   |
| Total                               |   | $                      | 75,196  |   |               | $      | 71,726  |                             |   | $ | 5,119 |   |

|                                            |   | 2010           |   |   | 2009   |   |
|-------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                            |   | (in thousands) |   |
| Loans past due 90 days or more still on accrual |   | $              | 594    |   |   | $      | 5,968 |   |
| Non-accrual loans                               |   |           | 59,799 |   |   |   | 78,888 |   |

----

|                     |   | Nonaccrual     |    |   | Loans PastDue 90 DaysAnd Over StillAccruing |   |
|--------------------------|--------|----------------|---------|--------|---------------------------------------------|--------|
|                     |   | (in thousands) |    |
|                     |   |           |    |   |                                        |   |
| Commercial               |   | $              | 2,778   |   |                                        | $      | 432 |   |
| Commercial Real Estate:  |   |           |    |   |                                        |   |   |   |
| Construction             |   |           | 12,651  |   |                                        |   | — |   |
| Farmland                 |   |           | 2,811   |   |                                        |   | 143 |   |
| Other                    |   |           | 23,031  |   |                                        |   | 12 |   |
| Residential Real Estate: |   |           |    |   |                                        |   |   |   |
| Multi-family             |   |           | 345     |   |                                        |   | — |   |
| Other                    |   |           | 17,778  |   |                                        |   | — |   |
| Consumer                 |   |           | 293     |   |                                        |   | 7 |   |
| Agriculture              |   |           | 112     |   |                                        |   | — |   |
| Other                    |   |           | — |   |                                        |   | — |   |
| Total                    |   | $              | 59,799  |   |                                        | $      | 594 |   |

|                     |   | 30 – 59DaysPast Due |    |   | 60 – 89DaysPast Due |   |    | 90 DaysAnd OverPast Due |   |   |   Non-accrual |   |   | TotalPast DueAndNon-accrual |    |   |  Loans NotPast Due |   |    |   Total |   |
|--------------------------|--------|---------------------------|---------|--------|---------------------------|--------|---------|-------------------------|--------|--------|-------------------------|--------|--------|-----------------------------|---------|--------|-------------------------|--------|---------|-------------------|--------|
|                     |   |                      |    |   |                      |   |    |                    |   |   |                    |   |   |                        |    |   |                    |   |    |              |   |
| Commercial               |   | $                         | 477     |   |                      | $      | 110     |                    |   | $      | 432                     |   |   | $                           | 2,778   |   |                    | $      | 3,797   |              |   | $ | 86,493 |   |   | $ | 90,290 |   |
| Commercial Real Estate:  |   |                      |    |   |                      |   |    |                    |   |   |                    |   |   |                        |    |   |                    |   |    |              |   |   |   |   |   |   |   |   |
| Construction             |   |                      | 1,097   |   |                      |   | 346     |                    |   |   | —                 |   |   |                        | 12,651  |   |                    |   | 14,094  |              |   |   | 185,430 |   |   |   | 199,524  |   |
| Farmland                 |   |                      | 1,232   |   |                      |   | 145     |                    |   |   | 143                     |   |   |                        | 2,811   |   |                    |   | 4,331   |              |   |   | 81,192 |   |   |   | 85,523 |   |
| Other                    |   |                      | 7,855   |   |                      |   | 2,094   |                    |   |   | 12                      |   |   |                        | 23,031  |   |                    |   | 32,992  |              |   |   | 408,852 |   |   |   | 441,844 |   |
| Residential Real Estate: |   |                      |    |   |                      |   |    |                    |   |   |                    |   |   |                        |    |   |                    |   |    |              |   |   |   |   |   |   |   |   |
| Multi-family             |   |                      | 714     |   |                      |   | 71      |                    |   |   | —                 |   |   |                        | 345     |   |                    |   | 1,130   |              |   |   | 73,789 |   |   |   | 74,919 |   |
| Other                    |   |                      | 8,239   |   |                      |   | 3,218   |                    |   |   | —                 |   |   |                        | 17,778  |   |                    |   | 29,235  |              |   |   | 324,183 |   |   |   | 353,418 |   |
| Consumer                 |   |                      | 1,156   |   |                      |   | 164     |                    |   |   | 7                       |   |   |                        | 293     |   |                    |   | 1,620   |              |   |   | 30,293 |   |   |   | 31,913 |   |
| Agriculture              |   |                      | 186     |   |                      |   | — |                    |   |   | —                 |   |   |                        | 112     |   |                    |   | 298     |              |   |   | 23,879 |   |   |   | 24,177 |   |
| Other                    |   |                      | — |   |                      |   | — |                    |   |   | —                 |   |   |                        | — |   |                    |   | — |              |   |   | 1,060 |   |   |   | 1,060 |   |
| Total                    |   | $                         | 20,956  |   |                      | $      | 6,148   |                    |   | $      | 594                     |   |   | $                           | 59,799  |   |                    | $      | 87,497  |              |   | $ | 1,215,171 |   |   | $ | 1,302,668 |   |

----

|                     |   | Pass           |    |   | Watch  |   |    | SpecialMention |   |   | Substandard |   |   | Doubtful |    |   | Total  |   |
|--------------------------|--------|----------------|---------|--------|--------|--------|---------|----------------|--------|--------|-------------|--------|--------|----------|---------|--------|--------|--------|
|                     |   | (in thousands) |    |
|                     |   |           |    |   |   |   |    |           |   |   |        |   |   |     |    |   |   |   |
| Commercial               |   | $              | 74,284  |   |   | $      | 5,478   |           |   | $      | 894         |   |   | $        | 9,634   |   |   | $      | — |   |   | $ | 90,290 |   |
| Commercial Real Estate:  |   |           |    |   |   |   |    |           |   |   |        |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Construction             |   |           | 137,631 |   |   |   | 15,397  |           |   |   | 12,968      |   |   |     | 33,528  |   |   |   | — |   |   |   | 199,524 |   |
| Farmland                 |   |           | 74,220  |   |   |   | 2,481   |           |   |   | —     |   |   |     | 8,822   |   |   |   | — |   |   |   | 85,523 |   |
| Other                    |   |           | 280,091 |   |   |   | 82,548  |           |   |   | 2,334       |   |   |     | 76,871  |   |   |   | — |   |   |   | 441,844 |   |
| Residential Real Estate: |   |           |    |   |   |   |    |           |   |   |        |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Multi-family             |   |           | 65,482  |   |   |   | 3,493   |           |   |   | 1,328       |   |   |     | 4,616   |   |   |   | — |   |   |   | 74,919 |   |
| Other                    |   |           | 298,748 |   |   |   | 18,783  |           |   |   | 1,458       |   |   |     | 34,429  |   |   |   | — |   |   |   | 353,418 |   |
| Consumer                 |   |           | 30,197  |   |   |   | 1,069   |           |   |   | 6           |   |   |     | 623     |   |   |   | 18 |   |   |   | 31,913 |   |
| Agriculture              |   |           | 22,923  |   |   |   | 1,086   |           |   |   | —     |   |   |     | 168     |   |   |   | — |   |   |   | 24,177 |   |
| Other                    |   |           | 1,060   |   |   |   | — |           |   |   | —     |   |   |     | — |   |   |   | — |   |   |   | 1,060 |   |
| Total                    |   | $              | 984,636 |   |   | $      | 130,335 |           |   | $      | 18,988      |   |   | $        | 168,691 |   |   | $      | 18 |   |   | $ | 1,302,668 |   |

|                     |   | 2010           |    |   | 2009   |   |
|--------------------------|--------|----------------|---------|--------|--------|--------|
|                     |   | (in thousands) |    |
| Land and buildings       |   | $              | 24,773  |   |   | $      | 24,740 |   |
| Furniture and equipment  |   |           | 17,541  |   |   |   | 17,253 |   |
|                     |   |           | 42,314  |   |   |   | 41,993 |   |
| Accumulated depreciation |   |           | (19,846 | )      |   |   | (18,383 | ) |
|                     |   | $              | 22,468  |   |   | $      | 23,610 |   |

----

|                     |   | 2010           |   |   | 2009   |   |
|--------------------------|--------|----------------|--------|--------|--------|--------|
|                     |   | (in thousands) |   |
| Commercial Real Estate:  |   |           |   |   |   |   |
| Construction             |   | $              | 50,491 |   |   | $      | 7,526 |   |
| Farmland                 |   |           | 1,904  |   |   |   | 442 |   |
| Other                    |   |           | 6,504  |   |   |   | 1,938 |   |
| Residential Real Estate: |   |           |   |   |   |   |   |   |
| Multi-family             |   |           | 823    |   |   |   | — |   |
| Other                    |   |           | 7,913  |   |   |   | 4,642 |   |
|                     |   | $              | 67,635 |   |   | $      | 14,548 |   |

| OREO Activity (in thousands) |   |   |    |
|------------------------------|--------|--------|---------|
| OREO as of January 1, 2010   |   | $      | 14,548  |   |
| Real estate acquired         |   |   | 90,787  |   |
| Valuation adjustments        |   |   | (14,062 | ) |
| Improvements                 |   |   | 1,947   |   |
| Properties sold              |   |   | (25,585 | ) |
| OREO as of December 31, 2010 |   | $      | 67,635  |   |

|                                                                          |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                          |   | (in thousands) |   |
| Net loss on sales                                                             |   | $              | 565    |   |   | $      | 190    |   |   | $ | 263 |   |
| Impairment write-downs                                                        |   |           | 14,062 |   |   |   | 500    |   |   |   | 478 |   |
| Operating expense                                                             |   |           | 1,627  |   |   |   | 465    |   |   |   | 140 |   |
|             Total |   | $              | 16,254 |   |   | $      | 1,155  |   |   | $ | 881 |   |

----

|              |   | 2010           |    |   | 2009   |   |
|-------------------|--------|----------------|---------|--------|--------|--------|
|              |   | (in thousands) |    |
| Beginning of year |   | $              | 23,794  |   |   | $      | 23,794 |   |
| Acquired goodwill |   |           | — |   |   |   | — |   |
| Adjustments       |   |           | — |   |   |   | — |   |
| End of year       |   | $              | 23,794  |   |   | $      | 23,794 |   |

|                         |   | 2010                |   |   | 2009                    |   |
|------------------------------|--------|---------------------|--------|--------|-------------------------|--------|
|                         |   | GrossCarryingAmount |   |   | AccumulatedAmortization |   |   | GrossCarryingAmount |   |   | AccumulatedAmortization |   |
|                         |   | (in thousands)      |   |
| Amortized intangible assets: |   |                |   |   |                    |   |   |   |   |   |   |   |
| Core deposit intangibles     |   | $                   | 4,183  |   |                    | $      | 1,666 |   |   | $ | 4,183 |   |   | $ | 1,207 |   |
| Trust account intangibles    |   |                | 100    |   |                    |   | 33 |   |   |   | 100 |   |   |   | 23 |   |

| 2011 |   | $      | 469 |   |
|------|--------|--------|-----|--------|
| 2012 |   |   | 466 |   |
| 2013 |   |   | 437 |   |
| 2014 |   |   | 407 |   |
| 2015 |   |   | 345 |   |

| 2011       |   | $      | 638,962   |   |
|------------|--------|--------|-----------|--------|
| 2012       |   |   | 167,077   |   |
| 2013       |   |   | 26,198    |   |
| 2014       |   |   | 155,325   |   |
| 2015       |   |   | 179,058   |   |
| Thereafter |   |   | 200       |   |
|       |   | $      | 1,166,820 |   |

----

|                                                                     |   | 2010           |   |   | 2009   |   |
|--------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                     |   | (in thousands) |   |
| Balance at year-end                                                      |   | $              | 11,616 |   |   | $      | 11,517 |   |
| Average daily balance during the year                                    |   | $              | 11,529 |   |   | $      | 10,912 |   |
| Average interest rate during the year                                    |   |           | 4.18   | %      |   |   | 4.35 | % |
| Maximum month-end balance during the year                                |   | $              | 12,011 |   |   | $      | 11,556 |   |
| Weighted average interest rate at year-end                               |   |           | 4.20   | %      |   |   | 4.21 | % |
| Fair value of securities sold under agreements to repurchase at year-end |   | $              | 11,616 |   |   | $      | 11,517 |   |

|                                                                                                                                     |   | 2010           |   |   | 2009   |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                                                                                     |   | (in thousands) |   |
| Single maturity advance with fixed rate of 4.48% maturing in 2012, averaging 4.48% for 2010                                              |   | $              | 5,000  |   |   | $      | 70,000 |   |
| Monthly amortizing advances with fixed rates from 0.00% to 6.49% and maturities ranging from 2011 through 2035, averaging 3.56% for 2010 |   |           | 10,022 |   |   |   | 12,980 |   |
| Total                                                                                                                                    |   | $              | 15,022 |   |   | $      | 82,980 |   |

|       |   | Advances |   |
|------------|--------|----------|--------|
| 2011       |   | $        | 2,256  |   |
| 2012       |   |     | 6,642  |   |
| 2013       |   |     | 1,146  |   |
| 2014       |   |     | 794    |   |
| 2015       |   |     | 733    |   |
| Thereafter |   |     | 3,451  |   |
|       |   | $        | 15,022 |   |

----

| Description                |   | IssuanceDate |       |   | OptionalPrepaymentDate (2) |   | Interest Rate (1) |   | JuniorSubordinatedDebt Owed toTrust |   |   | MaturityDate |   |
|----------------------------|--------|--------------|------------|--------|----------------------------|--------|-------------------|--------|-------------------------------------|--------|--------|--------------|--------|
| Porter Statutory Trust II  |   |         | 02-13-2004 |   |                       |   | 03-17-2009        |   | 3-month LIBOR + 2.85%               |   | $      | 5,000,000    |   |   |   | 02-13-2034 |   |
| Porter Statutory Trust III |   |         | 04-15-2004 |   |                       |   | 06-17-2009        |   | 3-month LIBOR + 2.79%               |   |   | 3,000,000    |   |   |   | 04-15-2034 |   |
| Porter Statutory Trust IV  |   |         | 12-14-2006 |   |                       |   | 03-01-2012        |   | 3-month LIBOR + 1.67%               |   |   | 14,000,000   |   |   |   | 03-01-2037 |   |
| Asencia Statutory Trust I  |   |         | 02-13-2004 |   |                       |   | 03-17-2009        |   | 3-month LIBOR + 2.85%               |   |   | 3,000,000    |   |   |   | 02-13-2034 |   |
|                       |   |         |       |   |                       |   |              |   |                                |   | $      | 25,000,000   |   |   |   |   |   |

----

| (1) | As of December 31, 2010 the 3-month LIBOR was 0.30%. |
|-----|-----------------------------------------------------------|

| (2) | The debentures are callable on or after the optional prepayment date at their principal amount plus accrued interest. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

|     |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|----------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|     |   | (in thousands) |   |
| Current  |   | $              | 4,852  |   |   | $      | 7,943  |   |   | $ | 7,413 |   |
| Deferred |   |           | (7,898 | )      |   |   | (2,519 | )      |   |   | (486 | ) |
|     |   | $              | (3,046 | )      |   | $      | 5,424  |   |   | $ | 6,927 |   |

|                                                           |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                                           |   | (in thousands) |   |
| Federal statutory rate times financial statement income (loss) |   | $              | (2,600 | )      |   | $      | 5,772  |   |   | $ | 7,328 |   |
| Effect of:                                                     |   |           |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt income                                              |   |           | (302   | )      |   |   | (303   | )      |   |   | (289 | ) |
| Non taxable life insurance income                              |   |           | (104   | )      |   |   | (99    | )      |   |   | (112 | ) |
| Federal tax credits                                            |   |           | (45    | )      |   |   | (45    | )      |   |   | (38 | ) |
| Other, net                                                     |   |           | 5      |   |   |   | 99     |   |   |   | 38 |   |
| Total                                                          |   | $              | (3,046 | )      |   | $      | 5,424  |   |   | $ | 6,927 |   |

----

|                                                 |   | 2010           |   |   | 2009   |   |
|------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                 |   | (in thousands) |   |
| Deferred tax assets:                                 |   |           |   |   |   |   |
| Allowance for loan losses                            |   | $              | 12,000 |   |   | $      | 9,186 |   |
| Other real estate owned write-down                   |   |           | 5,316  |   |   |   | 501 |   |
| Other than temporary impairment on securities        |   |           | 362    |   |   |   | 165 |   |
| Net operating loss carryforward                      |   |           | 31     |   |   |   | 92 |   |
| Amortization of non-compete agreements               |   |           | 43     |   |   |   | 59 |   |
| Other                                                |   |           | 652    |   |   |   | 518 |   |
|                                                 |   |           | 18,404 |   |   |   | 10,521 |   |
| Deferred tax liabilities:                            |   |           |   |   |   |   |   |   |
| Fixed assets                                         |   |           | 508    |   |   |   | 575 |   |
| Net unrealized gain on securities available for sale |   |           | 1,159  |   |   |   | 1,159 |   |
| FHLB stock dividends                                 |   |           | 1,276  |   |   |   | 1,276 |   |
| Net assets from acquisitions                         |   |           | 1,666  |   |   |   | 1,679 |   |
| Originated mortgage servicing rights                 |   |           | 98     |   |   |   | 55 |   |
| Other                                                |   |           | 739    |   |   |   | 716 |   |
|                                                 |   |           | 5,446  |   |   |   | 5,460 |   |
| Net deferred tax asset                               |   | $              | 12,958 |   |   | $      | 5,061 |   |

|              |   |   |    |
|-------------------|--------|--------|---------|
| Beginning balance |   | $      | 15,429  |   |
| New loans         |   |   | 75      |   |
| Repayments        |   |   | (13,781 | ) |
| Ending balance    |   | $      | 1,723   |   |

----

----

----

|                                          |   | Actual |   |   | Minimum RequiredFor CapitalAdequacy Purposes |   |   | To be CategorizedAs WellCapitalized UnderPrompt CorrectiveAction Provisions |   |
|-----------------------------------------------|--------|--------|--------|--------|---------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------|--------|
|                                          |   | Amount |   |   | Ratio                                             |   |   | Amount                                                                                          |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| 2010                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |
| Total Capital to risk-weighted assets         |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 211.2  |   |                                              |   | 16.3   | %                                                                                               |   | $ | 103.5 |   |   |   | 8.0 | % |   |   | N/A |   |   |   | N/A |   |
| PBI Bank                                      |   |   | 190.0  |   |                                              |   | 14.7   |                                                                                            |   |   | 103.3 |   |   |   | 8.0 |   |   | $ | 129.1 |   |   |   | 10.0 | % |
|                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 (Core) Capital to risk-weighted assets |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 186.3  |   |                                              |   | 14.4   | %                                                                                               |   | $ | 51.8 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| PBI Bank                                      |   |   | 165.1  |   |                                              |   | 12.8   |                                                                                            |   |   | 51.6 |   |   |   | 4.0 |   |   | $ | 77.5 |   |   |   | 6.0 | % |
|                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Leverage Ratio                         |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 186.3  |   |                                              |   | 11.1   | %                                                                                               |   | $ | 67.3 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| PBI Bank                                      |   |   | 165.1  |   |                                              |   | 9.9    |                                                                                            |   |   | 67.0 |   |   |   | 4.0 |   |   | $ | 83.8 |   |   |   | 5.0 | % |
|                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital to risk-weighted assets         |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 191.8  |   |                                              |   | 13.8   | %                                                                                               |   | $ | 110.9 |   |   |   | 8.0 | % |   |   | N/A |   |   |   | N/A |   |
| PBI Bank                                      |   |   | 173.1  |   |                                              |   | 12.6   |                                                                                            |   |   | 110.2 |   |   |   | 8.0 |   |   | $ | 137.8 |   |   |   | 10.0 | % |
|                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 (Core) Capital to risk-weighted assets |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 165.3  |   |                                              |   | 11.9   | %                                                                                               |   | $ | 55.5 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| PBI Bank                                      |   |   | 146.8  |   |                                              |   | 10.7   |                                                                                            |   |   | 55.1 |   |   |   | 4.0 |   |   | $ | 82.7 |   |   |   | 6.0 | % |
|                                          |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Leverage Ratio                         |   |   |   |   |                                              |   |   |                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 165.3  |   |                                              |   | 9.6    | %                                                                                               |   | $ | 68.9 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| PBI Bank                                      |   |   | 146.8  |   |                                              |   | 8.6    |                                                                                            |   |   | 68.5 |   |   |   | 4.0 |   |   | $ | 85.6 |   |   |   | 5.0 | % |

----

|                      |   | 2010           |   |   | 2009         |   |
|---------------------------|--------|----------------|--------|--------|--------------|--------|
|                      |   | FixedRate      |   |   | VariableRate |   |   | FixedRate |   |   | VariableRate |   |
|                      |   | (in thousands) |   |
| Commitments to make loans |   | $              | 8,973  |   |         | $      | 22,782 |   |   | $ | 17,690 |   |   | $ | 35,501 |   |
| Unused lines of credit    |   |           | 14,299 |   |         |   | 59,428 |   |   |   | 16,267 |   |   |   | 67,999 |   |
| Standby letters of credit |   |           | 509    |   |         |   | 3,313 |   |   |   | 563 |   |   |   | 4,238 |   |

----

----

|                               |   |                 |    |   | Fair Value Measurements at December 31, 2010 Using   |   |
|------------------------------------|--------|----------------------|---------|--------|----------------------------------------------------------------|--------|
|                               |   |                 |    |   |                                                           |   |   | (in thousands) |   |   |   |   |
|                               |   |                 |    |   | Quoted Prices In                                               |   |   |   |   |   | Significant |   |
|                               |   |                 |    |   | Active Markets for                                             |   |   | Significant Other  |   |   | Unobservable |   |
|                               |   |  Carrying  |    |   | Identical Assets                                          |   |   | Observable Inputs  |   |   | Inputs |   |
| Description                        |   | Value      |    |   | (Level 1)                                                      |   |   | (Level 2) |   |   | (Level 3) |   |
|                               |   |                 |    |   |                                                           |   |   |   |   |   |   |   |
| Available-for-sale securities      |   |                 |    |   |                                                           |   |   |   |   |   |   |   |
| U.S. Government and federal agency |   | $                    | 6,010   |   |                                                           | $      | - |   |   | $ | 6,010 |   |   | $ | - |   |
| State and municipal                |   |                 | 27,002  |   |                                                           |   | - |   |   |   | 27,002 |   |   |   | - |   |
| Agency mortgage-backed             |   |                 | 61,855  |   |                                                           |   | - |   |   |   | 61,855 |   |   |   | - |   |
| Corporate bonds                    |   |                 | 9,219   |   |                                                           |   | - |   |   |   | 9,219 |   |   |   | - |   |
| Other debt securities              |   |                 | 572     |   |                                                           |   | - |   |   |   | - |   |   |   | 572 |   |
| Equity securities                  |   |                 | 1,651   |   |                                                           |   | 1,651 |   |   |   | - |   |   |   | - |   |
| Total                              |   | $                    | 106,309 |   |                                                           | $      | 1,651 |   |   | $ | 104,086 |   |   | $ | 572 |   |

|                               |   |                 |    |   | Fair Value Measurements at December 31, 2009 Using   |   |
|------------------------------------|--------|----------------------|---------|--------|----------------------------------------------------------------|--------|
|                               |   |                 |    |   |                                                           |   |   | (in thousands) |   |   |   |   |
|                               |   |                 |    |   | Quoted Prices In                                               |   |   |   |   |   | Significant |   |
|                               |   |                 |    |   | Active Markets for                                             |   |   | Significant Other  |   |   | Unobservable |   |
|                               |   |  Carrying  |    |   | Identical Assets                                          |   |   | Observable Inputs  |   |   | Inputs |   |
| Description                        |   | Value      |    |   | (Level 1)                                                      |   |   | (Level 2) |   |   | (Level 3) |   |
|                               |   |                 |    |   |                                                           |   |   |   |   |   |   |   |
| Available-for-sale securities      |   |                 |    |   |                                                           |   |   |   |   |   |   |   |
| U.S. Government and federal agency |   | $                    | 619     |   |                                                           | $      | - |   |   | $ | 619 |   |   | $ | - |   |
| State and municipal                |   |                 | 25,455  |   |                                                           |   | - |   |   |   | 25,455 |   |   |   | - |   |
| Agency mortgage-backed             |   |                 | 95,155  |   |                                                           |   | - |   |   |   | 95,155 |   |   |   | - |   |
| Private label mortgage-backed      |   |                 | 31,639  |   |                                                           |   | - |   |   |   | - |   |   |   | 31,639 |   |
| Corporate bonds                    |   |                 | 13,765  |   |                                                           |   | - |   |   |   | 13,765 |   |   |   | - |   |
| Other debt securities              |   |                 | 529     |   |                                                           |   | - |   |   |   | - |   |   |   | 529 |   |
| Equity securities                  |   |                 | 1,559   |   |                                                           |   | 1,559 |   |   |   | - |   |   |   | - |   |
| Total                              |   | $                    | 168,721 |   |                                                           | $      | 1,559 |   |   | $ | 134,994 |   |   | $ | 32,168 |   |

|                                                   |   | Investment SecuritiesAvailable-for-sale |
|--------------------------------------------------------|--------|-----------------------------------------|
| Balance of recurring Level 3 assets at January 1, 2010 |   | $                                       | 32,168 |   |
| Sales                                                  |   |                                    | (7,769 | ) |
| Net accretion (amortization)                           |   |                                    | 606 |   |
| Transfers to Level 2                                   |   |                                    | (22,878 | ) |
| Principal paydowns                                     |   |                                    | (3,475 | ) |
| Other-than-temporary impairment write-down             |   |                                    | (132 | ) |
| Net change in unrealized gain (loss)                   |   |                                    | 2,052 |   |
| Balance of recurring Level 3 assets at December 31,    |   | $                                       | 572 |   |

----

|                         |   |              |   |   | Fair Value Measurements at December 31, 2010 Using |   |
|------------------------------|--------|-------------------|--------|--------|----------------------------------------------------|--------|
|                         |   |              |   |   | (in thousands)                                     |   |
|                         |   |              |   |   |  Quoted Prices In                        |   |   |   |   |   |  Significant |   |
|                         |   |              |   |   |  Active Markets for                           |   |   |  Significant Other  |   |   |  Unobservable |   |
|                         |   |  Carrying    |   |   |  Identical Assets                             |   |   |  Observable Inputs |   |   |  Inputs |   |
| Description                  |   |  Value  |   |   |  (Level 1)                               |   |   |  (Level 2)  |   |   |  (Level 3)  |   |
| Impaired loans               |   |              |   |   |                                               |   |   |   |   |   |   |   |
| Commercial                   |   | $                 | 1,127  |   |                                               | $      | - |   |   | $ | - |   |   | $ | 1,127 |   |
| Commercial real estate:      |   |              |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Construction                 |   |              | 8,722  |   |                                               |   | - |   |   |   | - |   |   |   | 8,722 |   |
| Farmland                     |   |              | 1,145  |   |                                               |   | - |   |   |   | - |   |   |   | 1,145 |   |
| Other                        |   |              | 13,728 |   |                                               |   | - |   |   |   | - |   |   |   | 13,728 |   |
| Other real estate owned, net |   |              |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate:      |   |              |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Construction                 |   |              | 50,491 |   |                                               |   | - |   |   |   | - |   |   |   | 50,491 |   |
| Farmland                     |   |              | 1,904  |   |                                               |   | - |   |   |   | - |   |   |   | 1,904 |   |
| Other                        |   |              | 6,504  |   |                                               |   | - |   |   |   | - |   |   |   | 6,504 |   |
| Residential real estate:     |   |              |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Multi-family                 |   |              | 823    |   |                                               |   | - |   |   |   | - |   |   |   | 823 |   |
| Other                        |   |              | 7,913  |   |                                               |   | - |   |   |   | - |   |   |   | 7,913 |   |

|                               |   |              |   |   | Fair Value Measurements at December 31, 2009 Using |    |
|------------------------------------|--------|-------------------|--------|--------|----------------------------------------------------|---------|
|                               |   |              |   |   | (in thousands)                                     |    |
|                               |   |              |   |   |  Quoted Prices In                        |    |   |   |   |   |  Significant |   |
|                               |   |              |   |   |  Active Markets for                           |    |   |  Significant Other  |   |   |  Unobservable |   |
|                               |   |  Carrying    |   |   |  Identical Assets                             |    |   |  Observable Inputs |   |   |  Inputs |   |
| Description                        |   |  Value  |   |   |  (Level 1)                               |    |   |  (Level 2)  |   |   |  (Level 3)  |   |
|                               |   |              |   |   |                                               |    |   |   |   |   |   |   |
| Impaired loans                     |   | $            | 79,313 |   |                                               | $  | - |   |   | $  | - |   |   | $  | 79,313 |   |
| Other real estate owned, net  |   |              | 14,548 |   |                                               |    | - |   |   |   | - |   |   |   | 14,548 |   |

----

|                                           |   | 2010           |      |   | 2009      |   |
|------------------------------------------------|--------|----------------|-----------|--------|-----------|--------|
|                                           |   | CarryingAmount |      |   | FairValue |   |   | CarryingAmount |   |   | FairValue |   |
|                                           |   | (in thousands) |      |
| Financial assets                               |   |           |      |   |      |   |   |   |   |   |   |   |
| Cash and cash equivalents                      |   | $              | 185,435   |   |      | $      | 185,435 |   |   | $ | 172,173 |   |   | $ | 172,173 |   |
| Securities available-for-sale                  |   |           | 106,309   |   |      |   | 106,309 |   |   |   | 168,721 |   |   |   | 168,721 |   |
| Federal Home Loan Bank stock                   |   |           | 10,072    |   |      |   | N/A |   |   |   | 10,072 |   |   |   | N/A |   |
| Mortgage loans held for sale                   |   |           | 345       |   |      |   | 345 |   |   |   | 334 |   |   |   | 334 |   |
| Loans, net                                     |   |           | 1,268,383 |   |      |   | 1,276,198 |   |   |   | 1,386,526 |   |   |   | 1,396,465 |   |
| Accrued interest receivable                    |   |           | 7,668     |   |      |   | 7,668 |   |   |   | 9,329 |   |   |   | 9,329 |   |
|                                           |   |           |      |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities                          |   |           |      |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                       |   | $              | 1,467,668 |   |      | $      | 1,472,677 |   |   | $ | 1,530,096 |   |   | $ | 1,526,508 |   |
| Securities sold under agreements to repurchase |   |           | 11,616    |   |      |   | 11,616 |   |   |   | 11,517 |   |   |   | 11,517 |   |
| Federal Home Loan Bank advances                |   |           | 15,022    |   |      |   | 15,051 |   |   |   | 82,980 |   |   |   | 83,217 |   |
| Subordinated capital notes                     |   |           | 8,550     |   |      |   | 7,879 |   |   |   | 9,000 |   |   |   | 7,323 |   |
| Junior subordinated debentures                 |   |           | 25,000    |   |      |   | 21,474 |   |   |   | 25,000 |   |   |   | 18,250 |   |
| Accrued interest payable                       |   |           | 1,910     |   |      |   | 1,910 |   |   |   | 2,705 |   |   |   | 2,705 |   |

----

|                                                                                               |   | 2010                                                                               |       |    | 2009   |   |      | 2008   |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------|---------|--------|--------|-----------|--------|--------|
|                                                                                               |   | (in thousands, except share and per share data) |       |
| Net income (loss)                                                                                  |   | $                                                                                  | (4,384     | )       |   | $      | 11,068    |   |   | $ | 14,010 |   |
| Less:                                                                                              |   |                                                                               |       |    |   |   |      |   |   |   |   |   |
| Preferred stock dividends                                                                          |   |                                                                               | (1,810     | )       |   |   | (1,750    | )      |   |   | (194 | ) |
| Accretion of Series A preferred stock discount                                                     |   |                                                                               | (177       | )       |   |   | (176      | )      |   |   | (20 | ) |
| (Earnings) loss allocated to unvested shares                                                       |   |                                                                               | 81         |    |   |   | (97       | )      |   |   | (94 | ) |
| (Earnings) loss allocated to Series C preferred                                                    |   |                                                                               | 103        |    |   |   | —   |   |   |   | — |   |
| Net income (loss) allocated to common shareholders, basic and diluted                              |   | $                                                                                  | (6,187     | )       |   | $      | 9,045     |   |   | $ | 13,702 |   |
| Basic                                                                                              |   |                                                                               |       |    |   |   |      |   |   |   |   |   |
| Weighted average common shares including unvested common shares and Series C preferred outstanding |   |                                                                               | 10,640,872 |    |   |   | 9,182,487 |   |   |   | 9,132,682 |   |
| Less: Weighted average unvested common shares                                                      |   |                                                                               | (135,757   | )  |   |   | (97,831   | )      |   |   | (62,012 | ) |
| Less: Weighted average Series C preferred shares                                                   |   |                                                                               | (171,616   | )  |   |   | —   |   |   |   | — |   |
| Weighted average common shares outstanding                                                         |   |                                                                               | 10,333,499 |    |   |   | 9,084,656 |   |   |   | 9,070,670 |   |
| Basic earnings (loss) per common share                                                             |   | $                                                                                  | (0.60      | )  |   | $      | 1.00      |   |   | $ | 1.51 |   |
| Diluted                                                                                            |   |                                                                               |       |    |   |   |      |   |   |   |   |   |
| Add: Dilutive effects of assumed exercises of common and Preferred Series C stock warrants         |   |                                                                               | —    |    |   |   | —   |   |   |   | — |   |
| Weighted average common shares and potential common shares                                         |   |                                                                               | 10,333,499 |    |   |   | 9,084,656 |   |   |   | 9,070,670 |   |
| Diluted earnings (loss) per common share                                                           |   | $                                                                                  | (0.60      | )  |   | $      | 1.00      |   |   | $ | 1.51 |   |

|                                                                    |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                    |   | (in thousands) |   |
| Unrealized holding gains (losses) on available-for-sale securities      |   | $              | 4,553  |   |   | $      | 4,020  |   |   | $ | (878 | ) |
| Less: Reclassification adjustment for gains (losses) realized in income |   |           | 4,555  |   |   |   | 315    |   |   |   | (607 | ) |
| Net unrealized gains (losses)                                           |   |           | (2     | )      |   |   | 3,705  |   |   |   | (271 | ) |
| Tax effect                                                              |   |           | 1      |   |   |   | (1,297 | )      |   |   | 95 |   |
| Net-of-tax amount                                                       |   | $              | (1     | )      |   | $      | 2,408  |   |   | $ | (176 | ) |

----

|                                             |   | 2010           |    |   | 2009   |   |
|--------------------------------------------------|--------|----------------|---------|--------|--------|--------|
|                                             |   | (in thousands) |    |
| ASSETS                                           |   |           |    |   |   |   |
| Cash and cash equivalents                        |   | $              | 18,064  |   |   | $      | 10,010 |   |
| Securities available-for-sale                    |   |           | 2,223   |   |   |   | 7,554 |   |
| Investment in banking subsidiaries               |   |           | 192,140 |   |   |   | 174,647 |   |
| Investment in and advances to other subsidiaries |   |           | 776     |   |   |   | 776 |   |
| Other assets                                     |   |           | 2,383   |   |   |   | 2,733 |   |
| Total assets                                     |   | $              | 215,586 |   |   | $      | 195,720 |   |
|                                             |   |           |    |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY       |   |           |    |   |   |   |   |   |
| Debt                                             |   | $              | 25,775  |   |   | $      | 25,775 |   |
| Accrued expenses and other liabilities           |   |           | 396     |   |   |   | 611 |   |
| Shareholders’ equity                       |   |           | 189,415 |   |   |   | 169,334 |   |
| Total liabilities and shareholders’ equity |   | $              | 215,586 |   |   | $      | 195,720 |   |

|                                                                |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                |   | (in thousands) |   |
| Interest income                                                     |   | $              | 609    |   |   | $      | 741    |   |   | $ | 402 |   |
| Dividends from subsidiaries                                         |   |           | 20     |   |   |   | 24     |   |   |   | 43 |   |
| Other income                                                        |   |           | 1,787  |   |   |   | 1,422  |   |   |   | 1,428 |   |
| Interest expense                                                    |   |           | (659   | )      |   |   | (819   | )      |   |   | (1,410 | ) |
| Other expense                                                       |   |           | (3,420 | )      |   |   | (3,023 | )      |   |   | (3,461 | ) |
| Income (loss) before income tax and undistributed subsidiary income |   |           | (1,663 | )      |   |   | (1,655 | )      |   |   | (2,998 | ) |
| Income tax expense (benefit)                                        |   |           | (592   | )      |   |   | (564   | )      |   |   | (1,081 | ) |
| Equity in undistributed subsidiary income (loss)                    |   |           | (3,313 | )      |   |   | 12,159 |   |   |   | 15,927 |   |
| Net income (loss)                                                   |   | $              | (4,384 | )      |   | $      | 11,068 |   |   | $ | 14,010 |   |

----

|                                             |   | 2010           |    |    | 2009   |   |    | 2008   |   |
|--------------------------------------------------|--------|----------------|---------|---------|--------|--------|---------|--------|--------|
|                                             |   | (in thousands) |    |
| Cash flows from operating activities             |   |           |    |    |   |   |    |   |   |
| Net income (loss)                                |   | $              | (4,384  | )       |   | $      | 11,068  |   |   | $ | 14,010 |   |
| Adjustments:                                     |   |           |    |    |   |   |    |   |   |   |   |   |
| Equity in undistributed subsidiary income (loss) |   |           | 3,313   |    |   |   | (12,159 | )      |   |   | (15,927 | ) |
| Loss on sale of assets                           |   |           | 84      |    |   |   | 6       |   |   |   | 799 |   |
| Change in other assets                           |   |           | (219    | )       |   |   | 312     |   |   |   | 171 |   |
| Change in other liabilities                      |   |           | 225     |    |   |   | (76     | )      |   |   | (153 | ) |
| Other                                            |   |           | 445     |    |   |   | 390     |   |   |   | 321 |   |
| Net cash (used in) from operating activities     |   |           | (536    | )  |   |   | (459    | )      |   |   | (779 | ) |
|                                             |   |           |    |    |   |   |    |   |   |   |   |   |
| Cash flows from investing activities             |   |           |    |    |   |   |    |   |   |   |   |   |
| Investments in subsidiaries                      |   |           | (21,000 | )       |   |   | — |   |   |   | (12,000 | ) |
| Purchase of securities                           |   |           | (514    | )       |   |   | (5,075  | )      |   |   | — |   |
| Sales of securities                              |   |           | 6,117   |    |   |   | 110     |   |   |   | 3,760 |   |
| Net cash used in investing activities            |   |           | (15,397 | )       |   |   | (4,965  | )      |   |   | (8,240 | ) |
|                                             |   |           |    |    |   |   |    |   |   |   |   |   |
| Cash flows from financing activities             |   |           |    |    |   |   |    |   |   |   |   |   |
| Proceeds from sale of preferred stock, net       |   |           | 11,064  |    |   |   | — |   |   |   | 35,000 |   |
| Proceeds from sale of common stock, net          |   |           | 19,476  |    |   |   | — |   |   |   | — |   |
| Repurchase of common stock, net                  |   |           | — |    |   |   | — |   |   |   | (301 | ) |
| Dividends paid on preferred stock                |   |           | (1,847  | )       |   |   | (1,721  | )      |   |   | (194 | ) |
| Dividends paid on common stock                   |   |           | (4,706  | )       |   |   | (6,993  | )      |   |   | (6,711 | ) |
| Net cash from (used in) financing activities     |   |           | 23,987  |    |   |   | (8,714  | )      |   |   | 27,794 |   |
|                                             |   |           |    |    |   |   |    |   |   |   |   |   |
| Net change in cash and cash equivalents          |   |           | 8,054   |    |   |   | (14,138 | )      |   |   | 18,775 |   |
| Beginning cash and cash equivalents              |   |           | 10,010  |    |   |   | 24,148  |   |   |   | 5,373 |   |
| Ending cash and cash equivalents                 |   | $              | 18,064  |    |   | $      | 10,010  |   |   | $ | 24,148 |   |

|           |   | Interest                              |   |   | Net Interest |   |   | Net    |   |   |   | Earnings Per Common Share |   |
|----------------|--------|---------------------------------------|--------|--------|-------------------|--------|--------|--------|--------|--------|--------|-------------------------------------|--------|
|           |   | Income                                |   |   | Income            |   |   | Income |   |   |   | Basic                               |   |   | Diluted |   |
|           |   | (in thousands, except per share data) |   |
| 2010           |   |                                  |   |   |              |   |   |   |   |   |   |                                |   |   |   |   |
| First quarter  |   | $                                     | 22,626 |   |              | $      | 14,177 |   |   | $      | 3,256  |                                |   |   | $ | .30 |   |   | $ | .30 |   |
| Second quarter |   |                                  | 22,126 |   |              |   | 14,727 |   |   |   | (1,131 | )                                   | (2)    |   |   | (.18 | ) |   |   | (.18 | ) |
| Third quarter  |   |                                  | 21,340 |   |              |   | 14,576 |   |   |   | 2,421  |                                |   |   |   | .16 |   |   |   | .15 |   |
| Fourth quarter |   |                                  | 20,315 |   |              |   | 14,086 |   |   |   | (8,930 | )                                   | (2)    |   |   | (.77 | ) |   |   | (.77 | ) |
|           |   |                                  |   |   |              |   |   |   |   |   |   |                                |   |   |   |   |   |   |   |   |   |
| 2009           |   |                                  |   |   |              |   |   |   |   |   |   |                                |   |   |   |   |   |   |   |   |   |
| First quarter  |   | $                                     | 23,502 |   |              | $      | 11,967 |   |   | $      | 3,061  |                                |   |   | $ | .29 |   |   | $ | .29 |   |
| Second quarter |   |                                  | 23,645 |   |              |   | 12,813 |   |   |   | 3,245  |                                |   |   |   | .29 |   |   |   | .29 |   |
| Third quarter  |   |                                  | 23,802 |   |              |   | 14,374 |   |   |   | 4,536  |                                |   |   |   | .45 |   |   |   | .45 |   |
| Fourth quarter |   |                                  | 23,517 |   |              |   | 14,900 |   |   |   | 226    |                                | (1)    |   |   | (.03 | ) |   |   | (.03 | ) |

| (1) Fourth quarter net income was lower than previous quarters due to increased provision for loan losses expense during the quarter.                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) Second and fourth quarter net income was lower than previous quarters due to increased provision for loan losses expense during the quarter and higher fair value write-down adjustments on other real estate owned. |

----

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Controls and Procedures

Item 9B.             Other Information

PART III

Item 10.             Directors, Executive Officers and Corporate Governance.

Item 11.             Executive Compensation.

Item 12.             Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

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

Item 14.             Principal Accounting Fees and Services.

----

PART IV

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

|        |                                                                                                                                                |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) 1. | The following financial statements are included in this Form 10-K:                                                                                  |
|        |                                                                                                                                                |
|        | Consolidated Balance Sheets as of December 31, 2010 and 2009                                                                                   |
|        | Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009, and 2008                                                    |
|        | Consolidated Statements of Change in Stockholders’ Equity and Comprehensive Income for the Years Ended December 31, 2010, 2009, and 2008 |
|        | Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009, and 2008                                                    |
|        | Notes to Consolidated Financial Statements                                                                                                          |
|        | Report of Independent Registered Public Accounting Firm                                                                                             |

|        |                                                                                                                                                                                                                                 |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) 2. | List of Financial Statement Schedules                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                 |
|        | Financial statement schedules are omitted because the information is not applicable.                                                                                                                                                 |
|        |                                                                                                                                                                                                                                 |
| (a) 3. | List of Exhibits                                                                                                                                                                                                                     |
|        |                                                                                                                                                                                                                                 |
|        | The Exhibit Index of this report is incorporated by reference. The compensatory plans or arrangement required to be filed as exhibits to this Form 10-K pursuant to Item 15(c) are noted with an asterisk in the Exhibit Index. |

----

SIGNATURES

|                | PORTER BANCORP, INC. |                                    |
|---------------------|----------------------|-----------------------------------------|
|                |                 |                                    |   |
| March 30, 2011 | By:                  | /s/ Maria L. Bouvette              |   |
|                |                 | Maria L. Bouvette                       |   |
|                |                 | President & Chief Executive Officer |   |

| /s/ J. Chester Porter   | Chairman of the Board of Directors    | March 30, 2011 |
|-------------------------|---------------------------------------|--------------------------|
| J. Chester Porter       |                                  |                     |
|                    |                                  |                     |
| /s/ Maria L. Bouvette   | President and Chief Executive Officer | March 30, 2011      |
| Maria L. Bouvette       |                                  |                     |
|                    |                                  |                     |
| /s/ David B. Pierce     | Chief Financial Officer               | March 30, 2011      |
| David B. Pierce         |                                  |                     |
|                    |                                  |                     |
| /s/ David L. Hawkins    | Director                              | March 30, 2011      |
| David L. Hawkins        |                                  |                     |
|                    |                                  |                     |
| /s/ W. Glenn Hogan      | Director                              | March 30, 2011      |
| W. Glenn Hogan          |                                  |                     |
|                    |                                  |                     |
| /s/ Sidney L. Monroe    | Director                              | March 30, 2011      |
| Sidney L. Monroe        |                                  |                     |
|                    |                                  |                     |
| /s/ Stephen A. Williams | Director                              | March 30, 2011      |
| Stephen A. Williams     |                                  |                     |
|                    |                                  |                     |
| /s/ W. Kirk Wycoff      | Director                              | March 30, 2011      |
| W. Kirk Wycoff          |                                  |                     |

----

EXHIBIT INDEX

| Exhibit No. (1)     |   | Description                                                                                                                                                                                                                                                               |
|-------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                           |   | Amended and Restated Articles of Incorporation of Registrant, dated December 7, 2005. Exhibit 3.1 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                       |
|                          |   |                                                                                                                                                                                                                                                                      |
|     3.2   |   | Articles of Amendment to the Amended and Restated Articles of Incorporation, dated November 18, 2008.  Exhibit 3.1 to Form 8-K filed November 24, 2008 is hereby incorporated by reference.                                                                     |
|                          |   |                                                                                                                                                                                                                                                                      |
| 3.3                           |   | Articles of Amendment to the Amended and Restated Articles of Incorporation, dated June 29, 2010. Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2010 is hereby incorporated by reference.                                |
|                          |   |                                                                                                                                                                                                                                                                      |
| 3.4                           |   | Articles of Amendment to the Amended and Restated Articles of Incorporation, dated June 30, 2010. Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2010 is hereby incorporated by reference.                                |
|                          |   |                                                                                                                                                                                                                                                                      |
| 3.5                           |   | Articles of Amendment to the Amended and Restated Articles of Incorporation, dated October 22, 2010. Exhibit 4.8 to Form S-3 Registration Statement (Reg. No. 333-170678) filed November 18, 2010 is hereby incorporated by reference.                          |
|                          |   |                                                                                                                                                                                                                                                                      |
| 3.6                           |   | Bylaws of the Registrant, dated November 30, 2005. Exhibit 3.2 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                                                          |
|                          |   |                                                                                                                                                                                                                                                                      |
|     4.1   |   | Warrant to purchase up to 299,829 shares.  Exhibit 4.1 to Form 8-K filed November 24, 2008 is hereby incorporated by reference.                                                                                                                                 |
|                          |   |                                                                                                                                                                                                                                                                      |
| 4.2                           |   | Securities Purchase Agreement between the Registrant and the Purchasers thereto, dated as of June 30, 2010.  Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2010 is hereby incorporated by reference.          |
|                          |   |                                                                                                                                                                                                                                                                      |
| 4.3                           |   | Registration Rights Agreement between the Registrant and the Purchasers thereto, dated as of June 30, 2010.  Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2010 is hereby incorporated by reference.          |
|                          |   |                                                                                                                                                                                                                                                                      |
| 4.4                           |   | Letter Agreement between the Registrant and SBAV LP, dated as of July 23, 2010.  Exhibit 10 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2010 is hereby incorporated by reference.                                       |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.1+                         |   | USAccess Bank, Inc. (now known as PBI Bank) 2000 Stock Option Plan. Exhibit 10.1 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                                        |
|                          |   |                                                                                                                                                                                                                                                                      |
|     10.2+ |   | Amendment to PBI Bank 2000 Stock Option Plan.                                                                                                                                                                                                                             |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.3+                         |   | Porter Bancorp, Inc. Amended and Restated 2006 Stock Incentive Plan. Exhibit 10.2 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                                       |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.4+                         |   | Form of Porter Bancorp, Inc. Stock Option Award Agreement. Exhibit 10.3 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                                                 |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.5+                         |   | Form of Porter Bancorp, Inc. Restricted Stock Award Agreement. Exhibit 10.4 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                                             |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.6+                         |   | Form of Ascencia Bank (now known as PBI Bank) Supplemental Executive Retirement Plan. Exhibit 10.5 to Form S-1 Registration Statement (Reg. No. 333-133198) filed April 11, 2006 is hereby incorporated by reference.                                      |
|                          |   |                                                                                                                                                                                                                                                                      |
|     10.7+      |   | Form of Amendment to PBI Bank Supplemental Executive Retirement Plan.                                                                                                                                                                                                     |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.8+                         |   | Porter Bancorp, Inc. 2006 Non-Employee Directors Stock Ownership Incentive Plan, as amended May 22, 2008. Annex A Definitive Proxy Statement filed April 17, 2008 is hereby incorporated by reference.                                                                    |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.9+                         |   | Amendment to Porter Bancorp, Inc. 2006 Non-Employee Directors Stock Ownership Incentive Plan, as amended May 22, 2008.                                                                                                                                                    |
|                          |   |                                                                                                                                                                                                                                                                      |
| 10.10                         |   | Promissory Installment Note of Maria L. Bouvette and J. Chester Porter, as borrowers, to David L. Hawkins, as lender. Exhibit 10.7 to Form S-1/A Registration Statement (Reg. No. 333-133198) filed May 24, 2006 is hereby incorporated by reference. |

----

| Exhibit No. (1) |   | Description                                                                                                                                                                                                                                                                                 |
|---------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11                     |   | Letter Agreement, dated November 21, 2008 including the Securities Purchase Agreement – Standard Terms incorporated by reference therein, between the Company and the U.S. Treasury.  Exhibit 10.1 to Form 8-K filed November 24, 2008 is hereby incorporated by reference. |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 10.12                     |   | Form of Waiver of Senior Executive Officers.  Exhibit 10.2 to Form 8-K filed November 24, 2008 is hereby incorporated by reference.                                                                                                                                               |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 10.13+                    |   | Porter Bancorp, Inc. 2010 Incentive Compensation Bonus Plan. Exhibit 10.14 to the Registrant’s Form 10Q filed with the SEC on May 11, 2010 is hereby incorporated by reference.                                                                                                       |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 10.14+                    |   | Porter Bancorp, Inc. 2011 Incentive Compensation Bonus Plan.                                                                                                                                                                                                                                |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 21.1                      |   | List of Subsidiaries of Porter Bancorp, Inc.                                                                                                                                                                                                                                                |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 23.1                      |   | Consent of Crowe Horwath LLP, Independent Registered Public Accounting Firm                                                                                                                                                                                                                 |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 31.1                      |   | Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 or 15d-14                                                                                                                                                                                               |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 31.2                      |   | Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14 or 15d-14                                                                                                                                                                                               |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 32.1                      |   | Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350                                                                                                                                                         |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 32.2                      |   | Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(b) or 15d-14(b) and U.S.C. Section 1350                                                                                                                                                            |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 99.1                      |   | Certification of Principal Executive Officer pursuant to Section 30.15 of the U.S. Treasury’s Interim Final Rule on TARP Standards for Compensation and Corporate Governance.                                                                                                    |
|                      |   |                                                                                                                                                                                                                                                                                        |
| 99.2                      |   | Certification of Principal Executive Officer pursuant to Section 30.15 of the U.S. Treasury’s Interim Final Rule on TARP Standards for Compensation and Corporate Governance.                                                                                                    |

----

| + | Management contract or compensatory plan or arrangement. |
|---|----------------------------------------------------------|

| (1) | The Company has other long-term debt agreements that meet the exclusion set forth in Section 601(b)(4)(iii)(A) of Regulation S-K. The Company hereby agrees to furnish a copy of such agreements to the Securities and Exchange Commission upon request. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|