----

| Community Bancorp. and Subsidiary                                                          |   |        |        |   |        |   |
|--------------------------------------------------------------------------------------------|--------|-------------|-------------|--------|-------------|--------|
| Consolidated Balance Sheets                                                                |   |        |        |   |        |   |
|                                                                                       |   | December 31 |        |   | December 31 |   |
|                                                                                       |   | 2010        |        |   | 2009        |   |
| Assets                                                                                     |   |        |        |   |        |   |
|   Cash and due from banks                                                        |   | $           | 51,441,652  |   |        | $      | 9,598,107 |   |
|   Federal funds sold and overnight deposits                                      |   |        | 6,635       |   |        |   | 5,036 |   |
|      Total cash and cash equivalents                              |   |        | 51,448,287  |   |        |   | 9,603,143 |   |
|   Securities held-to-maturity (fair value $38,157,000 at December 31, 2010 and   |   |        |        |   |        |   |   |   |
|    $45,543,000 at December 31, 2009)                                        |   |        | 37,440,714  |   |        |   | 44,766,250 |   |
|   Securities available-for-sale                                                  |   |        | 21,430,436  |   |        |   | 23,974,830 |   |
|   Restricted equity securities, at cost                                          |   |        | 4,308,550   |   |        |   | 3,906,850 |   |
|   Loans held-for-sale                                                            |   |        | 2,363,938   |   |        |   | 321,983 |   |
|   Loans                                                                          |   |        | 389,068,859 |   |        |   | 381,937,123 |   |
|     Allowance for loan losses                                          |   |        | (3,727,935  | )      |        |   | (3,450,542 | ) |
|     Unearned net loan fees                                             |   |        | (74,351     | )      |        |   | (152,188 | ) |
|         Net loans                                  |   |        | 385,266,573 |   |        |   | 378,334,393 |   |
|   Bank premises and equipment, net                                               |   |        | 12,791,971  |   |        |   | 13,637,414 |   |
|   Accrued interest receivable                                                    |   |        | 1,789,621   |   |        |   | 1,895,313 |   |
|   Bank owned life insurance                                                      |   |        | 3,933,331   |   |        |   | 3,813,016 |   |
|   Core deposit intangible                                                        |   |        | 2,130,432   |   |        |   | 2,663,040 |   |
|   Goodwill                                                                       |   |        | 11,574,269  |   |        |   | 11,574,269 |   |
|   Other real estate owned (OREO)                                                 |   |        | 1,210,300   |   |        |   | 743,000 |   |
|   Prepaid expense - Federal Deposit Insurance Corporation (FDIC)                 |   |        | 1,533,157   |   |        |   | 2,105,565 |   |
|   Other assets                                                                   |   |        | 8,711,070   |   |        |   | 7,948,031 |   |
|         Total assets                               |   | $           | 545,932,649 |   |        | $      | 505,287,097 |   |
|                                                                                       |   |        |        |   |        |   |   |   |
| Liabilities and Shareholders' Equity                                                       |   |        |        |   |        |   |   |   |
|  Liabilities                                                                          |   |        |        |   |        |   |   |   |
|   Deposits:                                                                      |   |        |        |   |        |   |   |   |
|     Demand, non-interest bearing                                       |   | $           | 55,570,893  |   |        | $      | 52,821,573 |   |
|     NOW and money market accounts                                      |   |        | 182,427,902 |   |        |   | 146,244,454 |   |
|     Savings                                                            |   |        | 56,461,370  |   |        |   | 52,448,863 |   |
|     Time deposits, $100,000 and over                                   |   |        | 52,014,363  |   |        |   | 63,261,583 |   |
|     Other time deposits                                                |   |        | 91,717,735  |   |        |   | 104,009,257 |   |
|         Total deposits                             |   |        | 438,192,263 |   |        |   | 418,785,730 |   |
|                                                                                       |   |        |        |   |        |   |   |   |
|   Federal funds purchased and other borrowed funds                               |   |        | 33,010,000  |   |        |   | 13,411,000 |   |
|   Repurchase agreements                                                          |   |        | 19,107,815  |   |        |   | 19,042,214 |   |
|   Capital lease obligations                                                      |   |        | 834,839     |   |        |   | 876,536 |   |
|   Junior subordinated debentures                                                 |   |        | 12,887,000  |   |        |   | 12,887,000 |   |
|   Accrued interest and other liabilities                                         |   |        | 2,773,063   |   |        |   | 3,394,779 |   |
|         Total liabilities                          |   |        | 506,804,980 |   |        |   | 468,397,259 |   |
|                                                                                       |   |        |        |   |        |   |   |   |
|  Commitments and contingent liabilities (Notes 5, 15, 16, 17 and 20)                  |   |        |        |   |        |   |   |   |
|                                                                                       |   |        |        |   |        |   |   |   |
|  Shareholders' Equity                                                                 |   |        |        |   |        |   |   |   |
|   Preferred stock, 1,000,000 shares authorized, 25 shares issued                 |   |        |        |   |        |   |   |   |
|     and outstanding ($100,000 liquidation value)                       |   |        | 2,500,000   |   |        |   | 2,500,000 |   |
| Common stock - $2.50 par value; 10,000,000 shares authorized, at December 31,              |   |        |        |   |        |
|    2010 and 2009, and 4,834,615 and 4,759,913 shares issued at December 31, |   |        |        |   |        |   |   |   |
|    2010 and 2009, respectively (including 19,312 and 21,636 shares issued   |   |        |        |   |        |   |   |   |
|    February 1, 2011 and 2010, respectively)                                 |   |        | 12,086,538  |   |        |   | 11,899,783 |   |
|   Additional paid-in capital                                                     |   |        | 26,718,403  |   |        |   | 26,192,359 |   |
|   Retained earnings (accumulated deficit)                                        |   |        | 368,848     |   |        |   | (1,192,409 | ) |
|   Accumulated other comprehensive income                                         |   |        | 76,657      |   |        |   | 112,882 |   |
|   Less: treasury stock, at cost; 210,101 shares at December 31, 2010 and 2009    |   |        | (2,622,777  | )      |        |   | (2,622,777 | ) |
|         Total shareholders' equity                 |   |        | 39,127,669  |   |        |   | 36,889,838 |   |
|         Total liabilities and shareholders' equity |   | $           | 545,932,649 |   |        | $      | 505,287,097 |   |

----

| Community Bancorp. and Subsidiary                                                 |   |   |       |   |   |   |
|-----------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Consolidated Statements of Income                                                 |   |   |       |   |   |   |
|                                                                              |   |   |       |   |   |   |
| For The Years Ended December 31,                                                  |   | 2010   |       |   | 2009   |   |
|                                                                              |   |   |       |   |   |   |
|  Interest income                                                             |   |   |       |   |   |   |
|    Interest and fees on loans                                      |   | $      | 21,975,775 |   |   | $      | 21,907,599 |   |
|    Interest on debt securities                                     |   |   |       |   |   |   |   |   |
|      Taxable                                             |   |   | 343,596    |   |   |   | 779,278 |   |
|      Tax-exempt                                          |   |   | 1,284,104  |   |   |   | 1,367,439 |   |
|    Dividends                                                       |   |   | 64,556     |   |   |   | 64,550 |   |
|    Interest on federal funds sold and overnight deposits           |   |   | 18,952     |   |   |   | 406 |   |
|         Total interest income             |   |   | 23,686,983 |   |   |   | 24,119,272 |   |
|                                                                              |   |   |       |   |   |   |   |   |
|  Interest expense                                                            |   |   |       |   |   |   |   |   |
|    Interest on deposits                                            |   |   | 4,758,106  |   |   |   | 6,147,348 |   |
|    Interest on federal funds purchased and other borrowed funds    |   |   | 616,629    |   |   |   | 307,594 |   |
|    Interest on repurchase agreements                               |   |   | 178,745    |   |   |   | 255,281 |   |
|    Interest on junior subordinated debentures                      |   |   | 974,257    |   |   |   | 974,257 |   |
|         Total interest expense            |   |   | 6,527,737  |   |   |   | 7,684,480 |   |
|                                                                              |   |   |       |   |   |   |   |   |
|      Net interest income                                 |   |   | 17,159,246 |   |   |   | 16,434,792 |   |
|  Provision for loan losses                                                   |   |   | 1,016,668  |   |   |   | 625,004 |   |
|      Net interest income after provision for loan losses |   |   | 16,142,578 |   |   |   | 15,809,788 |   |
|                                                                              |   |   |       |   |   |   |   |   |
|  Non-interest income                                                         |   |   |       |   |   |   |   |   |
|    Service fees                                                    |   |   | 2,285,570  |   |   |   | 2,174,607 |   |
|    Income from sold loans                                          |   |   | 1,203,014  |   |   |   | 1,114,099 |   |
|    Income on bank owned life insurance                             |   |   | 120,315    |   |   |   | 122,937 |   |
|    Net realized gains on securities                                |   |   | 0          |   |   |   | 471,055 |   |
|    Other income                                                    |   |   | 2,032,403  |   |   |   | 1,773,735 |   |
|         Total non-interest income         |   |   | 5,641,302  |   |   |   | 5,656,433 |   |
|                                                                              |   |   |       |   |   |   |   |   |
|  Non-interest expense                                                        |   |   |       |   |   |   |   |   |
|    Salaries and wages                                              |   |   | 5,824,999  |   |   |   | 5,984,998 |   |
|    Employee benefits                                               |   |   | 2,153,142  |   |   |   | 2,170,228 |   |
|    Occupancy expenses, net                                         |   |   | 2,971,418  |   |   |   | 2,990,440 |   |
|    FDIC insurance                                                  |   |   | 633,043    |   |   |   | 784,877 |   |
|    Amortization of core deposit intangible                         |   |   | 532,608    |   |   |   | 665,760 |   |
|    Write down of Fannie Mae preferred stock                        |   |   | 25,804     |   |   |   | 94,446 |   |
|    Other expenses                                                  |   |   | 5,141,136  |   |   |   | 5,342,929 |   |
|         Total non-interest expense        |   |   | 17,282,150 |   |   |   | 18,033,678 |   |
|                                                                              |   |   |       |   |   |   |   |   |
|     Income before income taxes                                |   |   | 4,501,730  |   |   |   | 3,432,543 |   |
|  Income tax expense (benefit)                                                |   |   | 555,722    |   |   |   | (315,319 | ) |
|         Net income                        |   | $      | 3,946,008  |   |   | $      | 3,747,862 |   |
|                                                                              |   |   |       |   |   |   |   |   |
|  Earnings per common share                                                   |   | $      | 0.82       |   |   | $      | 0.79 |   |
|  Weighted average number of common shares                                    |   |   |       |   |   |   |   |   |
|   used in computing earnings per share                                  |   |   | 4,584,145  |   |   |   | 4,504,943 |   |
|  Dividends declared per common share                                         |   | $      | 0.48       |   |   | $      | 0.48 |   |
|  Book value per share on common shares outstanding at December 31,           |   | $      | 7.92       |   |   | $      | 7.56 |   |

----

| COMMUNITY BANCORP. AND SUBSIDIARY                                |
|------------------------------------------------------------------|
| Consolidated Statements of Changes in Shareholders’ Equity |
| Years Ended December 31, 2010 and 2009                           |

|                                                 |   |         |      |   |            |   |
|------------------------------------------------------|--------|--------------|-----------|--------|-----------------|--------|
|                                                 |   | Common stock |      |   | Preferred stock |   |
|                                                 |   | Shares       |      |   | Amount          |   |   | Shares |   |   | Amount |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |
| Balances, December 31, 2008                          |   |         | 4,469,105 |   |            | $      | 11,698,015 |   |   |   | 25 |   |   | $ | 2,500,000 |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income, net of taxes                   |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Net unrealized holding loss on securities            |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   available-for-sale, net of tax, $216,352 |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive income                           |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared - common stock               |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Cash dividends declared - preferred stock            |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Issuance of common stock                             |   |         | 80,707    |   |            |   | 201,768 |   |   |   | 0 |   |   |   | 0 |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Balances, December 31, 2009                          |   |         | 4,549,812 |   |            |   | 11,899,783 |   |   |   | 25 |   |   |   | 2,500,000 |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income, net of taxes                   |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Net unrealized holding loss on securities            |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   available-for-sale, net of tax, $18,660  |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive income                           |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared - common stock               |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Cash dividends declared - preferred stock            |   |         | 0         |   |            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Issuance of common stock                             |   |         | 74,702    |   |            |   | 186,755 |   |   |   | 0 |   |   |   | 0 |   |
|                                                 |   |         |      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Balances, December 31, 2010                          |   |         | 4,624,514 |   |            | $      | 12,086,538 |   |   |   | 25 |   |   | $ | 2,500,000 |   |

----

|       |       |   |         |   |       |          |   |   |     |   |   |          |       |
|------------|------------|--------|--------------|--------|------------|---------------|--------|--------|----------|--------|--------|---------------|------------|
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |
|       |       |   | Retained     |   |       | Accumulated   |   |   |     |   |   |          |       |
| Additional |       |   | earnings     |   |       | other         |   |   |     |   |   | Total         |       |
| paid-in    |       |   | (accumulated |   |       | comprehensive |   |   | Treasury |   |   | shareholders' |       |
| capital    |       |   | deficit)     |   |       | income        |   |   | stock    |   |   | equity        |       |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |
| $          | 25,757,516 |   |         | $      | (2,592,721 | )             |   | $      | 532,859  |   |   | $             | (2,622,777 | ) |   | $ | 35,272,892 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 0          |   |         |   | 3,747,862  |          |   |   | 0        |   |   |          | 0          |   |   |   | 3,747,862 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 0          |   |         |   | 0          |          |   |   | (419,977 | )      |   |          | 0          |   |   |   | (419,977 | ) |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   | 3,327,885 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 0          |   |         |   | (2,160,050 | )             |   |   | 0        |   |   |          | 0          |   |   |   | (2,160,050 | ) |
|       | 0          |   |         |   | (187,500   | )             |   |   | 0        |   |   |          | 0          |   |   |   | (187,500 | ) |
|       | 434,843    |   |         |   | 0          |          |   |   | 0        |   |   |          | 0          |   |   |   | 636,611 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 26,192,359 |   |         |   | (1,192,409 | )             |   |   | 112,882  |   |   |          | (2,622,777 | ) |   |   | 36,889,838 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 0          |   |         |   | 3,946,008  |          |   |   | 0        |   |   |          | 0          |   |   |   | 3,946,008 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 0          |   |         |   | 0          |          |   |   | (36,225  | )      |   |          | 0          |   |   |   | (36,225 | ) |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   | 3,909,783 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
|       | 0          |   |         |   | (2,197,251 | )             |   |   | 0        |   |   |          | 0          |   |   |   | (2,197,251 | ) |
|       | 0          |   |         |   | (187,500   | )             |   |   | 0        |   |   |          | 0          |   |   |   | (187,500 | ) |
|       | 526,044    |   |         |   | 0          |          |   |   | 0        |   |   |          | 0          |   |   |   | 712,799 |   |
|       |       |   |         |   |       |          |   |   |     |   |   |          |       |   |   |   |   |   |
| $          | 26,718,403 |   |         | $      | 368,848    |          |   | $      | 76,657   |   |   | $             | (2,622,777 | ) |   | $ | 39,127,669 |   |

----

| Community Bancorp. and Subsidiary                                                     |   |   |        |   |   |   |
|---------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Consolidated Statements of Cash Flows                                                 |   |   |        |   |   |   |
| For The Year Ended December 31,                                                       |   | 2010   |        |   | 2009   |   |
|                                                                                  |   |   |        |   |   |   |
| Cash Flow from Operating Activities:                                                  |   |   |        |   |   |   |
|   Net income                                                                |   | $      | 3,946,008   |   |   | $      | 3,747,862 |   |
|   Adjustments to Reconcile Net Income to Net Cash Provided by               |   |   |        |   |   |   |   |   |
|    Operating Activities:                                               |   |   |        |   |   |   |   |   |
|     Depreciation and amortization, bank premises and equipment    |   |   | 1,035,739   |   |   |   | 1,090,618 |   |
|     Provision for loan losses                                     |   |   | 1,016,668   |   |   |   | 625,004 |   |
|     Deferred income tax benefit                                   |   |   | (456,275    | )      |   |   | (545,933 | ) |
|     Net gain on sale of securities                                |   |   | 0           |   |   |   | (471,055 | ) |
|     Net gain on sale of loans                                     |   |   | (1,203,014  | )      |   |   | (1,114,099 | ) |
|     Gain on sale of bank premises and equipment                   |   |   | (4,584      | )      |   |   | 0 |   |
|     Loss on sale of OREO                                          |   |   | 10,807      |   |   |   | 7,523 |   |
|     (Gain) loss on Trust LLC                                      |   |   | (70,344     | )      |   |   | 1,296 |   |
|     Amortization of bond premium, net                             |   |   | 382,422     |   |   |   | 238,960 |   |
|     Write down of Fannie Mae preferred stock                      |   |   | 25,804      |   |   |   | 94,446 |   |
|     Write down of OREO                                            |   |   | 91,500      |   |   |   | 100,000 |   |
|     Proceeds from sales of loans held for sale                    |   |   | 53,544,819  |   |   |   | 72,112,002 |   |
|     Originations of loans held for sale                           |   |   | (54,383,760 | )      |   |   | (70,138,042 | ) |
|     (Decrease) increase in taxes payable                          |   |   | (288,003    | )      |   |   | 80,615 |   |
|     Decrease in interest receivable                               |   |   | 105,692     |   |   |   | 149,237 |   |
|     Amortization (prepayment) of FDIC insurance premiums          |   |   | 572,408     |   |   |   | (2,105,565 | ) |
|     (Increase) decrease in mortgage servicing rights              |   |   | (143,747    | )      |   |   | 27,149 |   |
|     (Increase) decrease in other assets                           |   |   | (281,602    | )      |   |   | 101,100 |   |
|     Increase in cash surrender value of bank owned life insurance |   |   | (120,315    | )      |   |   | (122,937 | ) |
|     Amortization of core deposit intangible                       |   |   | 532,608     |   |   |   | 665,760 |   |
|     Amortization of limited partnerships                          |   |   | 495,592     |   |   |   | 983,904 |   |
|     Decrease in unamortized loan fees                             |   |   | (77,837     | )      |   |   | (148,816 | ) |
|     Decrease in interest payable                                  |   |   | (42,248     | )      |   |   | (79,414 | ) |
|     Increase in accrued expenses                                  |   |   | 12,451      |   |   |   | 14,271 |   |
|     Increase (decrease) in other liabilities                      |   |   | 175,743     |   |   |   | (523,077 | ) |
|        Net cash provided by operating activities   |   |   | 4,876,533   |   |   |   | 4,790,809 |   |
|                                                                                  |   |   |        |   |   |   |   |   |
| Cash Flows from Investing Activities:                                                 |   |   |        |   |   |   |   |   |
|   Investments - held-to-maturity                                            |   |   |        |   |   |   |   |   |
|     Maturities and pay downs                                      |   |   | 55,629,885  |   |   |   | 47,379,523 |   |
|     Purchases                                                     |   |   | (48,304,349 | )      |   |   | (54,857,415 | ) |
|   Investments - available-for-sale                                          |   |   |        |   |   |   |   |   |
|     Maturities, calls, pay downs and sales                        |   |   | 9,160,000   |   |   |   | 22,747,245 |   |
|     Purchases                                                     |   |   | (7,078,717  | )      |   |   | (17,771,332 | ) |
|   Purchase of restricted equity securities                                  |   |   | (401,700    | )      |   |   | 0 |   |
|   Decrease in limited partnership contributions payable                     |   |   | (766,455    | )      |   |   | (690,545 | ) |
|   Cash Investments in limited partnerships                                  |   |   | 0           |   |   |   | (766,555 | ) |
|   Increase in loans, net                                                    |   |   | (8,724,874  | )      |   |   | (18,434,694 | ) |
|   Proceeds from sales of bank premises and equipment,                       |   |   |        |   |   |   |   |   |
|     net of capital expenditures                                   |   |   | (185,712    | )      |   |   | 261,397 |   |
|   Proceeds from sales of OREO                                               |   |   | 170,843     |   |   |   | 167,477 |   |
|   Recoveries of loans charged off                                           |   |   | 113,413     |   |   |   | 68,860 |   |
|        Net cash used in investing activities       |   |   | (387,666    | )      |   |   | (21,896,039 | ) |

----

|                                                                                           |   | 2010   |        |   | 2009   |   |
|------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                           |   |   |        |   |   |   |
| Cash Flows from Financing Activities:                                                          |   |   |        |   |   |   |
|   Net increase in demand, NOW, money market and savings accounts                     |   |   | 42,945,275  |   |   |   | 24,612,438 |   |
|   Net decrease in time deposits                                                      |   |   | (23,538,742 | )      |   |   | (8,067,488 | ) |
|   Net increase (decrease) in repurchase agreements                                   |   |   | 65,601      |   |   |   | (44,242 | ) |
|   Net decrease in short-term borrowings                                              |   |   | (3,401,000  | )      |   |   | (9,161,000 | ) |
|   Proceeds from long-term borrowings                                                 |   |   | 28,000,000  |   |   |   | 10,000,000 |   |
|   Repayments on long-term borrowings                                                 |   |   | (5,000,000  | )      |   |   | 0 |   |
|   Decrease in capital lease obligations                                              |   |   | (41,697     | )      |   |   | (38,516 | ) |
|   Dividends paid on preferred stock                                                  |   |   | (187,500    | )      |   |   | (187,500 | ) |
|   Dividends paid on common stock                                                     |   |   | (1,485,659  | )      |   |   | (1,674,947 | ) |
|        Net cash provided by financing activities            |   |   | 37,356,278  |   |   |   | 15,438,745 |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|        Net increase (decrease) in cash and cash equivalents |   |   | 41,845,144  |   |   |   | (1,666,485 | ) |
|   Cash and cash equivalents:                                                         |   |   |        |   |   |   |   |   |
|           Beginning                          |   |   | 9,603,143   |   |   |   | 11,269,628 |   |
|           Ending                             |   | $      | 51,448,287  |   |   | $      | 9,603,143 |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|  Supplemental Schedule of Cash Paid During the Period                                     |   |   |        |   |   |   |   |   |
|   Interest                                                                           |   | $      | 6,569,985   |   |   | $      | 7,763,894 |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|   Income taxes                                                                       |   | $      | 1,300,000   |   |   | $      | 150,000 |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|  Supplemental Schedule of Noncash Investing and Financing Activities:                     |   |   |        |   |   |   |   |   |
|   Change in unrealized gain on securities available-for-sale                         |   | $      | (54,885     | )      |   | $      | (636,329 | ) |
|                                                                                           |   |   |        |   |   |   |   |   |
|   Loans and bank premises transferred to OREO                                        |   | $      | 740,450     |   |   | $      | 833,000 |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|   Investments in limited partnerships                                                |   |   |        |   |   |   |   |   |
|     Cash investment in limited partnerships                                |   | $      | 0           |   |   | $      | (766,555 | ) |
|     Decrease in contributions payable                                      |   |   | (766,455    | )      |   |   | (690,545 | ) |
|                                                                                           |   | $      | (766,455    | )      |   | $      | (1,457,100 | ) |
|                                                                                           |   |   |        |   |   |   |   |   |
|  Common Shares Dividends Paid                                                             |   |   |        |   |   |   |   |   |
|   Dividends declared                                                                 |   | $      | 2,197,251   |   |   | $      | 2,160,050 |   |
|   Decrease in dividends payable attributable to dividends declared                   |   |   | 1,207       |   |   |   | 151,508 |   |
|   Dividends reinvested                                                               |   |   | (712,799    | )      |   |   | (636,611 | ) |
|                                                                                           |   | $      | 1,485,659   |   |   | $      | 1,674,947 |   |

----

|                                                                                                                 |   | 2010   |      |   | 2009   |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                                                 |   |   |      |   |   |   |
| Net income before write down of Fannie Mae preferred stock and tax effect thereof                                    |   | $      | 3,963,039 |   |   | $      | 3,810,196 |   |
| Realized loss on write down of Fannie Mae preferred stock                                                            |   |   | 25,804    |   |   |   | 94,446 |   |
|      Tax effect                                                                             |   |   | (8,773    | )      |   |   | (32,112 | ) |
|         Net income after realized loss                                       |   |   | 3,946,008 |   |   |   | 3,747,862 |   |
|                                                                                                                 |   |   |      |   |   |   |   |   |
| Other comprehensive loss, net of tax:                                                                                |   |   |      |   |   |   |   |   |
|      Change in unrealized holding gain on available-for-sale                                |   |   |      |   |   |   |   |   |
|        securities arising during the period                                       |   |   | (54,885   | )      |   |   | (165,274 | ) |
|      Reclassification adjustment for gains realized in income                               |   |   | 0         |   |   |   | 471,055 |   |
|         Net change in unrealized gain                                        |   |   | (54,885   | )      |   |   | (636,329 | ) |
|         Tax effect                                                           |   |   | 18,660    |   |   |   | 216,352 |   |
|         Other comprehensive loss, net of tax                                 |   |   | (36,225   | )      |   |   | (419,977 | ) |
|                Total comprehensive income |   | $      | 3,909,783 |   |   | $      | 3,327,885 |   |

|                                                                            |   | 2010   |      |   | 2009   |   |
|---------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                            |   |   |      |   |   |   |
| Net income, as reported                                                         |   | $      | 3,946,008 |   |   | $      | 3,747,862 |   |
| Less: dividends to preferred shareholders                                       |   |   | 187,500   |   |   |   | 187,500 |   |
| Net income available to common shareholders                                     |   | $      | 3,758,508 |   |   | $      | 3,560,362 |   |
|                                                                            |   |   |      |   |   |   |   |   |
| Weighted average number of common shares used in calculating earnings per share |   |   | 4,584,145 |   |   |   | 4,504,943 |   |
| Earnings per common share                                                       |   | $      | 0.82      |   |   | $      | 0.79 |   |

|                                                       |   |      |       |   | Gross      |   |    | Gross      |   |   |   |   |
|------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|---------|------------|--------|--------|--------|--------|
|                                                       |   | Amortized |       |   | Unrealized |   |    | Unrealized |   |   | Fair   |   |
| Securities AFS                                             |   | Cost      |       |   | Gains      |   |    | Losses     |   |   | Value  |   |
|                                                       |   |      |       |   |       |   |    |       |   |   |   |   |
| December 31, 2010                                          |   |      |       |   |       |   |    |       |   |   |   |   |
| U.S. Government sponsored enterprise (GSE) debt securities |   | $         | 16,234,676 |   |       | $      | 88,091  |       |   | $      | 9,377  |   |   | $ | 16,313,390 |   |
| U.S. Government securities                                 |   |      | 5,037,252  |   |       |   | 37,666  |       |   |   | 232    |   |   |   | 5,074,686 |   |
| U.S. GSE preferred stock                                   |   |      | 42,360     |   |       |   | 0       |       |   |   | 0      |   |   |   | 42,360 |   |
|                                                       |   | $         | 21,314,288 |   |       | $      | 125,757 |       |   | $      | 9,609  |   |   | $ | 21,430,436 |   |
|                                                       |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
| December 31, 2009                                          |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
| U.S. GSE debt securities                                   |   | $         | 18,686,949 |   |       | $      | 138,283 |       |   | $      | 18,582 |   |   | $ | 18,806,650 |   |
| U.S. Government securities                                 |   |      | 5,048,683  |   |       |   | 48,773  |       |   |   | 764    |   |   |   | 5,096,692 |   |
| U.S. GSE preferred stock                                   |   |      | 68,164     |   |       |   | 3,324   |       |   |   | 0      |   |   |   | 71,488 |   |
|                                                       |   | $         | 23,803,796 |   |       | $      | 190,380 |       |   | $      | 19,346 |   |   | $ | 23,974,830 |   |
|                                                       |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
|                                                       |   |      |       |   |       | Gross  |    |       | Gross  |   |   |   |   |   |
|                                                       |   | Amortized |       |   | Unrealized |   |    | Unrealized |   |   | Fair   |   |
| Securities HTM                                             |   | Cost      |       |   | Gains      |   |    | Losses     |   |   | Value* |   |
|                                                       |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
| December 31, 2010                                          |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
| States and political subdivisions                          |   | $         | 37,440,714 |   |       | $      | 716,286 |       |   | $      | 0      |   |   | $ | 38,157,000 |   |
|                                                       |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
| December 31, 2009                                          |   |      |       |   |       |   |    |       |   |   |   |   |   |   |   |   |
| States and political subdivisions                          |   | $         | 44,766,250 |   |       | $      | 776,750 |       |   | $      | 0      |   |   | $ | 45,543,000 |   |

|                       |   | Amortized |       |   | Fair   |   |
|----------------------------|--------|-----------|------------|--------|--------|--------|
|                       |   | Cost      |       |   | Value  |   |
|                       |   |      |       |   |   |   |
| Due in one year or less    |   | $         | 14,172,100 |   |   | $      | 14,248,432 |   |
| Due from one to five years |   |      | 7,099,828  |   |   |   | 7,139,644 |   |
|                       |   | $         | 21,271,928 |   |   | $      | 21,388,076 |   |

|                       |   | Amortized |       |   | Fair   |   |
|----------------------------|--------|-----------|------------|--------|--------|--------|
|                       |   | Cost      |       |   | Value* |   |
|                       |   |      |       |   |   |   |
| Due in one year or less    |   | $         | 28,468,783 |   |   | $      | 28,469,000 |   |
| Due from one to five years |   |      | 4,253,527  |   |   |   | 4,433,000 |   |
| Due from five to ten years |   |      | 789,962    |   |   |   | 969,000 |   |
| Due after ten years        |   |      | 3,928,442  |   |   |   | 4,286,000 |   |
|                       |   | $         | 37,440,714 |   |   | $      | 38,157,000 |   |

|                       |   | 2010                |      |   | 2009                |   |
|----------------------------|--------|---------------------|-----------|--------|---------------------|--------|
|                       |   | Less than 12 months |      |   | Less than 12 months |   |
|                       |   | Fair                |      |   | Unrealized          |   |   | Fair |   |   | Unrealized |   |
|                       |   | Value               |      |   | Loss                |   |   | Value |   |   | Loss |   |
|                       |   |                |      |   |                |   |   |   |   |   |   |   |
| U.S. GSE debt securities   |   | $                   | 2,037,894 |   |                | $      | 9,377 |   |   | $ | 2,055,018 |   |   | $ | 18,582 |   |
| U.S. Government securities |   |                | 1,007,225 |   |                |   | 232 |   |   |   | 1,003,233 |   |   |   | 764 |   |
|                       |   | $                   | 3,045,119 |   |                | $      | 9,609 |   |   | $ | 3,058,251 |   |   | $ | 19,346 |   |

|                      |   | 2010   |        |   | 2009   |   |
|---------------------------|--------|--------|-------------|--------|--------|--------|
|                      |   |   |        |   |   |   |
| Commercial                |   | $      | 31,045,424  |   |   | $      | 27,448,574 |   |
| Commercial real estate    |   |   | 133,494,431 |   |   |   | 124,527,745 |   |
| Residential real estate   |   |   | 213,834,818 |   |   |   | 216,458,286 |   |
| Consumer                  |   |   | 13,058,124  |   |   |   | 13,824,501 |   |
|                      |   |   | 391,432,797 |   |   |   | 382,259,106 |   |
| Deduct:                   |   |   |        |   |   |   |   |   |
| Allowance for loan losses |   |   | 3,727,935   |   |   |   | 3,450,542 |   |
| Unearned net loan fees    |   |   | 74,351      |   |   |   | 152,188 |   |
| Loans held for sale       |   |   | 2,363,938   |   |   |   | 321,983 |   |
|                      |   |   | 6,166,224   |   |   |   | 3,924,713 |   |
| Net loans                 |   | $      | 385,266,573 |   |   | $      | 378,334,393 |   |

|                    |   |       |      |   | 90 Days |   |      | Total    |   |   |       |   |   |        |        |   | Over 90 Days |   |
|-------------------------|--------|------------|-----------|--------|---------|--------|-----------|----------|--------|--------|------------|--------|--------|-------------|-------------|--------|--------------|--------|
|                    |   | 30-89 Days |      |   | or More |   |      | Past Due |   |   | Current    |   |   | Total Loans |        |   | and Accruing |   |
|                    |   |       |      |   |    |   |      |     |   |   |       |   |   |        |        |   |         |   |
| Commercial              |   | $          | 915,924   |   |    | $      | 54,376    |     |   | $      | 970,300    |   |   | $           | 30,075,124  |   |         | $      | 31,045,424 |   |   | $ | 29,446 |   |
| Commercial real estate  |   |       | 939,910   |   |    |   | 130,512   |     |   |   | 1,070,422  |   |   |        | 132,424,009 |   |         |   | 133,494,431 |   |   |   | 94,982 |   |
| Residential real estate |   |       | 6,117,292 |   |    |   | 2,108,870 |     |   |   | 8,226,162  |   |   |        | 203,244,718 |   |         |   | 211,470,880 |   |   |   | 1,194,477 |   |
| Consumer                |   |       | 242,742   |   |    |   | 38,466    |     |   |   | 281,208    |   |   |        | 12,776,916  |   |         |   | 13,058,124 |   |   |   | 38,466 |   |
|                    |   |       |      |   |    |   |      |     |   |   |       |   |   |        |        |   |         |   |   |   |   |   |   |   |
| Total                   |   | $          | 8,215,868 |   |    | $      | 2,332,224 |     |   | $      | 10,548,092 |   |   | $           | 378,520,767 |   |         | $      | 389,068,859 |   |   | $ | 1,357,371 |   |

|                              |   | 2010   |      |   | 2009   |   |
|-----------------------------------|--------|--------|-----------|--------|--------|--------|
|                              |   |   |      |   |   |   |
| Balance at beginning of year      |   | $      | 3,450,542 |   |   | $      | 3,232,932 |   |
| Provision for loan losses         |   |   | 1,016,668 |   |   |   | 625,004 |   |
| Recoveries of amounts charged off |   |   | 113,413   |   |   |   | 68,860 |   |
|                              |   |   | 4,580,623 |   |   |   | 3,926,796 |   |
| Amounts charged off               |   |   | (852,688  | )      |   |   | (476,254 | ) |
| Balance at end of year            |   | $      | 3,727,935 |   |   | $      | 3,450,542 |   |

|                                                   |   |       |       |   | Commercial  |   |        | Residential |   |   |        |   |   |        |       |   |   |   |
|--------------------------------------------------------|--------|------------|------------|--------|-------------|--------|-------------|-------------|--------|--------|-------------|--------|--------|-------------|------------|--------|--------|--------|
|                                                   |   | Commercial |       |   | Real Estate |   |        | Real Estate |   |   | Consumer    |   |   | Unallocated |       |   | Total  |   |
|                                                   |   |
| Allowance for loan losses                              |   |
|  Individually evaluated for impairment            |   | $          | 3,700      |   |        | $      | 51,200      |        |   | $      | 337,800     |   |   | $           | 0          |   |   | $      | 0 |   |   | $ | 392,700 |   |
|  Collectively evaluated  for impairment |   |       | 298,721    |   |        |   | 1,340,698   |        |   |   | 1,493,016   |   |   |        | 151,948    |   |   |   | 50,852 |   |   |   | 3,335,235 |   |
|                                                   |   |       |       |   |        |   |        |        |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Total                                                  |   | $          | 302,421    |   |        | $      | 1,391,898   |        |   | $      | 1,830,816   |   |   | $           | 151,948    |   |   | $      | 50,852 |   |   | $ | 3,727,935 |   |
|                                                   |   |
| Loans                                                  |   |
|  Individually evaluated for impairment            |   | $          | 61,226     |   |        | $      | 1,145,194   |        |   | $      | 3,219,911   |   |   | $           | 0          |   |   |   |   |   |   | $ | 4,426,331 |   |
| Collectively evaluated for impairment                  |   |       | 30,984,199 |   |        |   | 132,349,237 |        |   |   | 210,614,907 |   |   |        | 13,058,124 |   |   |   |   |   |   |   | 387,006,466 |   |
|                                                   |   |       |       |   |        |   |        |        |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Total                                                  |   | $          | 31,045,425 |   |        | $      | 133,494,431 |        |   | $      | 213,834,818 |   |   | $           | 13,058,124 |   |   |   |   |   |   | $ | 391,432,797 |   |

----

|                                      |   |       |      |   | Unpaid    |   |      |      |   |   | Average    |   |   | Interest   |      |
|-------------------------------------------|--------|------------|-----------|--------|-----------|--------|-----------|-----------|--------|--------|------------|--------|--------|------------|-----------|
|                                      |   | Recorded   |      |   | Principal |   |      | Related   |   |   | Recorded   |   |   | Income     |      |
|                                      |   | Investment |      |   | Balance   |   |      | Allowance |   |   | Investment |   |   | Recognized |      |
|                                      |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |
| With no related allowance recorded        |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |
|    Commercial              |   | $          | 24,930    |   |      | $      | 61,460    |      |   | $      | 0          |   |   | $          | 106,737   |   |   | $ | 0 |   |
|    Commercial real estate  |   |       | 0         |   |      |   | 0         |      |   |   | 0          |   |   |       | 494,150   |   |   |   | 0 |   |
|    Residential real estate |   |       | 1,138,290 |   |      |   | 1,527,508 |      |   |   | 0          |   |   |       | 1,186,068 |   |   |   | 0 |   |
|                                      |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |   |   |   |   |   |
| With an allowance recorded                |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |   |   |   |   |   |
|    Commercial              |   |       | 36,296    |   |      |   | 39,856    |      |   |   | 3,700      |   |   |       | 37,300    |   |   |   | 0 |   |
|    Commercial real estate  |   |       | 1,145,194 |   |      |   | 1,145,672 |      |   |   | 51,200     |   |   |       | 1,158,924 |   |   |   | 0 |   |
|    Residential real estate |   |       | 2,081,621 |   |      |   | 2,303,744 |      |   |   | 337,800    |   |   |       | 1,661,441 |   |   |   | 0 |   |
|                                      |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |   |   |   |   |   |
| Total                                     |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |   |   |   |   |   |
|    Commercial              |   | $          | 61,226    |   |      | $      | 101,316   |      |   | $      | 3,700      |   |   | $          | 144,037   |   |   | $ | 0 |   |
|    Commercial real estate  |   | $          | 1,145,194 |   |      | $      | 1,145,672 |      |   | $      | 51,200     |   |   | $          | 1,653,074 |   |   | $ | 0 |   |
|    Residential real estate |   | $          | 3,219,911 |   |      | $      | 3,831,252 |      |   | $      | 337,800    |   |   | $          | 2,847,509 |   |   | $ | 0 |   |
|                                      |   |       |      |   |      |   |      |      |   |   |       |   |   |       |      |   |   |   |   |   |
| Total                                     |   | $          | 4,426,331 |   |      | $      | 5,078,240 |      |   | $      | 392,700    |   |   | $          | 4,644,620 |   |   | $ | 0 |   |

| Retail Loans             |   |
|--------------------------|--------|
|                     |   |   |   |   | Residential |   |   | Land & Residential |   |   |   |   |
|                     |   | Consumer |   |   | Real Estate |   |   | Construction |   |   | Total |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Group A                  |   | $ | 12,997,587 |   |   | $ | 193,809,708 |   |   | $ | 7,074,480 |   |   | $ | 213,881,775 |   |
| Group C                  |   |   | 60,537 |   |   |   | 3,390,928 |   |   |   | 35,527 |   |   |   | 3,486,992 |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    |   | $ | 13,058,124 |   |   | $ | 197,200,636 |   |   | $ | 7,110,007 |   |   | $ | 217,368,767 |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial Purpose Loans |   |
|                     |   | Residential |   |   |   |   |   |   | Commercial |   |   |   |   |   |
|                     |   | Real Estate |   |   | Commercial |   |   | Real Estate |   |   | Total |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Group A                  |   | $ | 13,453,586 |   |   | $ | 28,148,611 |   |   | $ | 110,982,274 |   |   | $ | 152,584,471 |   |
| Group B                  |   |   | 883,271 |   |   |   | 1,617,895 |   |   |   | 9,455,795 |   |   |   | 11,956,960 |   |
| Group C                  |   |   | 2,297,324 |   |   |   | 1,278,919 |   |   |   | 5,946,355 |   |   |   | 9,522,598 |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    |   | $ | 16,634,182 |   |   | $ | 31,045,425 |   |   | $ | 126,384,424 |   |   | $ | 174,064,030 |   |

|                                                    |   | 2010   |      |   | 2009   |   |
|---------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                    |   |   |      |   |   |   |
| Balance at beginning of year                            |   | $      | 932,961   |   |   | $      | 960,110 |   |
|    Mortgage servicing rights capitalized |   |   | 403,026   |   |   |   | 584,004 |   |
|    Mortgage servicing rights amortized   |   |   | (392,233  | )      |   |   | (363,755 | ) |
|    Change in valuation allowance         |   |   | 132,954   |   |   |   | (247,398 | ) |
| Balance at end of year                                  |   | $      | 1,076,708 |   |   | $      | 932,961 |   |

|                                           |   | 2010   |       |   | 2009   |   |
|------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                           |   |   |       |   |   |   |
| Buildings and improvements                     |   | $      | 10,515,227 |   |   | $      | 10,438,594 |   |
| Land and land improvements                     |   |   | 2,378,812  |   |   |   | 2,571,812 |   |
| Furniture and equipment                        |   |   | 6,199,355  |   |   |   | 6,242,201 |   |
| Leasehold improvements                         |   |   | 1,293,328  |   |   |   | 1,277,509 |   |
| Capital lease                                  |   |   | 927,889    |   |   |   | 927,889 |   |
| Other prepaid assets                           |   |   | 89,507     |   |   |   | 14,530 |   |
|                                           |   |   | 21,404,118 |   |   |   | 21,472,535 |   |
| Less accumulated depreciation and amortization |   |   | (8,612,147 | )      |   |   | (7,835,121 | ) |
|                                           |   | $      | 12,791,971 |   |   | $      | 13,637,414 |   |

----

| 2011               |   | $      | 164,386 |   |
|--------------------|--------|--------|---------|--------|
| 2012               |   |   | 170,386 |   |
| 2013               |   |   | 170,386 |   |
| 2014               |   |   | 146,097 |   |
| 2015               |   |   | 122,040 |   |
| Subsequent to 2015 |   |   | 55,000  |   |
|               |   | $      | 828,295 |   |

| 2011                                        |   | $      | 113,482   |   |
|---------------------------------------------|--------|--------|-----------|--------|
| 2012                                        |   |   | 116,982   |   |
| 2013                                        |   |   | 116,982   |   |
| 2014                                        |   |   | 119,482   |   |
| 2015                                        |   |   | 122,982   |   |
| Subsequent to 2015                          |   |   | 645,853   |   |
| Total minimum lease payments                |   |   | 1,235,763 |   |
| Less amount representing interest           |   |   | (400,924  | )      |
| Present value of net minimum lease payments |   | $      | 834,839   |   |

| 2011                                  |   | $      | 426,086   |   |
|---------------------------------------|--------|--------|-----------|--------|
| 2012                                  |   |   | 340,869   |   |
| 2013                                  |   |   | 272,695   |   |
| 2014                                  |   |   | 272,695   |   |
| 2015                                  |   |   | 272,695   |   |
| Thereafter                            |   |   | 545,392   |   |
| Total core deposit intangible expense |   | $      | 2,130,432 |   |

----

| 2011                               |   | $      | 81,282,356  |   |
|------------------------------------|--------|--------|-------------|--------|
| 2012                               |   |   | 30,182,902  |   |
| 2013                               |   |   | 8,311,327   |   |
| 2014                               |   |   | 7,490,663   |   |
| Thereafter                         |   |   | 16,464,850  |   |
| Total time certificates of deposit |   | $      | 143,732,098 |   |

|                                                            |   | 2010   |       |   | 2009   |   |
|-----------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Long-Term Borrowings                                            |   |   |       |   |   |   |
| FHLBB term borrowing, 2.13% fixed rate, due January 31, 2011    |   | $      | 10,000,000 |   |   | $      | 10,000,000 |   |
| FHLBB Community Investment Program borrowing, 7.67% fixed rate, |   |   |       |   |   |   |   |   |
|    due November 16, 2012                         |   |   | 10,000     |   |   |   | 10,000 |   |
| FHLBB term borrowing, 1.00% fixed rate, due January 27, 2012    |   |   | 6,000,000  |   |   |   | 0 |   |
| FHLBB term borrowing, 1.71% fixed rate, due January 27, 2013    |   |   | 6,000,000  |   |   |   | 0 |   |
| FHLBB term borrowing, 2.72% fixed rate, due January 27, 2015    |   |   | 6,000,000  |   |   |   | 0 |   |
|                                                            |   |   | 28,010,000 |   |   |   | 10,010,000 |   |
|                                                            |   |   |       |   |   |   |   |   |
| Short-Term Advances                                             |   |   |       |   |   |   |   |   |
| FHLBB term borrowing, 0.39% fixed rate, due January 19, 2011    |   |   | 5,000,000  |   |   |   | 0 |   |
|                                                            |   |   |       |   |   |   |   |   |
| Overnight Borrowings                                            |   |   |       |   |   |   |   |   |
| Federal funds purchased (FHLBB), 0.200%                         |   |   | 0          |   |   |   | 3,401,000 |   |
|                                                            |   |   |       |   |   |   |   |   |
| Total borrowings                                                |   | $      | 33,010,000 |   |   | $      | 13,411,000 |   |

----

|                      |   | 2010   |      |   | 2009   |   |
|---------------------------|--------|--------|-----------|--------|--------|--------|
|                      |   |   |      |   |   |   |
| Currently paid or payable |   | $      | 1,011,997 |   |   | $      | 230,614 |   |
| Deferred                  |   |   | (456,275  | )      |   |   | (545,933 | ) |
|                      |   | $      | 555,722   |   |   | $      | (315,319 | ) |

|                          |   | 2010   |      |   | 2009   |   |
|-------------------------------|--------|--------|-----------|--------|--------|--------|
|                          |   |   |      |   |   |   |
| Computed expected tax expense |   | $      | 1,530,588 |   |   | $      | 1,167,065 |   |
| Tax exempt interest           |   |   | (477,502  | )      |   |   | (506,875 | ) |
| Disallowed interest           |   |   | 34,891    |   |   |   | 42,479 |   |
| Partnership tax credits       |   |   | (534,808  | )      |   |   | (1,022,294 | ) |
| Other                         |   |   | 2,553     |   |   |   | 4,306 |   |
|                          |   | $      | 555,722   |   |   | $      | (315,319 | ) |

|                                  |   | 2010   |     |   | 2009   |   |
|---------------------------------------|--------|--------|----------|--------|--------|--------|
|                                  |   |   |     |   |   |   |
| Depreciation                          |   | $      | 11,660   |   |   | $      | (39,522 | ) |
| Mortgage servicing rights             |   |   | 48,874   |   |   |   | (9,230 | ) |
| Deferred compensation                 |   |   | (27,343  | )      |   |   | 42,568 |   |
| Bad debts                             |   |   | (94,313  | )      |   |   | (73,988 | ) |
| Non-accrual loan interest             |   |   | (40,129  | )      |   |   | (15,171 | ) |
| Core deposit intangible               |   |   | (181,087 | )      |   |   | (226,358 | ) |
| Loan fair value                       |   |   | (23,674  | )      |   |   | (42,871 | ) |
| Time deposit fair value               |   |   | (61,880  | )      |   |   | (88,400 | ) |
| Securities valuation                  |   |   | 0        |   |   |   | (92,187 | ) |
| Fannie Mae preferred stock write down |   |   | (9,532   | )      |   |   | 11,256 |   |
| OREO write down                       |   |   | (53,210  | )      |   |   | 0 |   |
| Other                                 |   |   | (25,641  | )      |   |   | (12,030 | ) |
|                                  |   | $      | (456,275 | )      |   | $      | (545,933 | ) |

----

|                                                                         |   | 2010   |      |   | 2009   |   |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Components of the deferred tax asset:                                        |   |   |      |   |   |   |
|    Bad debts                                                  |   | $      | 1,093,322 |   |   | $      | 999,008 |   |
|    Non-accrual loan interest                                  |   |   | 80,105    |   |   |   | 39,976 |   |
|    Deferred compensation                                      |   |   | 337,449   |   |   |   | 310,105 |   |
|    Contingent liability - MPF program                         |   |   | 38,307    |   |   |   | 24,367 |   |
|    Fair value adjustment on acquired securities               |   |   |      |   |   |   |   |   |
|       available-for-sale                       |   |   | 545,125   |   |   |   | 535,593 |   |
|    Fannie Mae preferred stock write down                      |   |   | 251,373   |   |   |   | 251,373 |   |
|    OREO write down                                            |   |   | 53,210    |   |   |   | 0 |   |
|    Capital lease                                              |   |   | 60,101    |   |   |   | 53,142 |   |
|    Alternative minimum tax                                    |   |   | 59,031    |   |   |   | 59,031 |   |
|    Fair value adjustment on acquired bank premises            |   |   |      |   |   |   |   |   |
|       and equipment                            |   |   | 153,862   |   |   |   | 153,862 |   |
|    Other                                                      |   |   | 111,141   |   |   |   | 106,400 |   |
|         Total deferred tax asset     |   |   | 2,783,026 |   |   |   | 2,532,857 |   |
|                                                                         |   |   |      |   |   |   |   |   |
| Components of the deferred tax liability:                                    |   |   |      |   |   |   |   |   |
|    Depreciation                                               |   |   | 344,820   |   |   |   | 333,160 |   |
|    Limited partnerships                                       |   |   | 255,280   |   |   |   | 255,280 |   |
|    Mortgage servicing rights                                  |   |   | 366,080   |   |   |   | 317,207 |   |
|    Unrealized gain on securities available-for-sale           |   |   | 39,491    |   |   |   | 58,152 |   |
|    Core deposit intangible                                    |   |   | 724,347   |   |   |   | 905,433 |   |
|    Fair value adjustment on acquired loans                    |   |   | 102,192   |   |   |   | 125,866 |   |
|    Fair value adjustment on acquired time deposits            |   |   | 0         |   |   |   | 61,880 |   |
|         Total deferred tax liability |   |   | 1,832,210 |   |   |   | 2,056,978 |   |
|                                                                         |   |   |      |   |   |   |   |   |
|         Net deferred tax asset       |   | $      | 950,816   |   |   | $      | 475,879 |   |

----

|                                                          |   | Contract or       |       |
|---------------------------------------------------------------|--------|-------------------|------------|
|                                                          |   | -Notional Amount- |       |
|                                                          |   | 2010              |       |   | 2009 |   |
|                                                          |   |              |       |   |   |   |
| Unused portions of home equity lines of credit                |   | $                 | 18,936,634 |   |   | $ | 15,556,908 |   |
| Other commitments to extend credit                            |   |              | 30,581,584 |   |   |   | 26,613,388 |   |
| Residential construction lines of credit                      |   |              | 2,044,892  |   |   |   | 1,671,116 |   |
| Commercial real estate and other construction lines of credit |   |              | 6,891,848  |   |   |   | 12,664,208 |   |
| Standby letters of credit and commercial letters of credit    |   |              | 1,266,800  |   |   |   | 735,007 |   |
| Recourse on sale of credit card portfolio                     |   |              | 371,800    |   |   |   | 391,380 |   |
| MPF credit enhancement obligation, net (See Note 16)          |   |              | 1,806,982  |   |   |   | 1,485,978 |   |

|                                     |   | 2010   |        |   | 2009   |   |
|------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                     |   |   |        |   |   |   |
| Balance, beginning                       |   | $      | 6,538,993   |   |   | $      | 3,778,080 |   |
| Loans - New Principal Officers/Directors |   |   | 0           |   |   |   | 2,809,549 |   |
| New loans to existing Officers/Directors |   |   | 25,835,458  |   |   |   | 6,206,719 |   |
| Retirement of Director                   |   |   | 0           |   |   |   | (2,273 | ) |
| Repayment*                               |   |   | (25,358,458 | )      |   |   | (6,253,082 | ) |
| Balance, ending                          |   | $      | 7,015,993   |   |   | $      | 6,538,993 |   |

|                                     |                   |        |               |              | Minimum |
|------------------------------------------|------------------------|-------------|--------------------|-------------------|---------|
|                                     |                   |        | Minimum            | To Be Well        |
|                                     |                   |        | For Capital        | Capitalized Under |
|                                     |                   |        | Adequacy           | Prompt Corrective |
|                                     | Actual                 | Purposes:   | Action Provisions: |
|                                     | Amount                 | Ratio  | Amount             | Ratio             | Amount  | Ratio |
|                                     | (Dollars in Thousands) |
| As of December 31, 2010:                 |                   |        |               |              |    |   |
| Total capital (to risk-weighted assets)  |                   |        |               |              |    |   |
|    Company                | $43,942                | 12.33%      | $28,505            | 8.00%             | N/A     | N/A |
|    Bank                   | $43,364                | 12.20%      | $28,439            | 8.00%             | $35,549 | 10.00% |
|                                     |                   |        |               |              |    |   |
| Tier I capital (to risk-weighted assets) |                   |        |               |              |    |   |
|    Company                | $40,187                | 11.28%      | $14,253            | 4.00%             | N/A     | N/A |
|    Bank                   | $39,610                | 11.14%      | $14,220            | 4.00%             | $21,329 | 6.00% |
|                                     |                   |        |               |              |    |   |
| Tier I capital (to average assets)       |                   |        |               |              |    |   |
|    Company                | $40,187                | 7.52%       | $21,376            | 4.00%             | N/A     | N/A |
|    Bank                   | $39,610                | 7.42%       | $21,345            | 4.00%             | $26,681 | 5.00% |

----

|                                     |                   |        |               |              | Minimum |
|------------------------------------------|------------------------|-------------|--------------------|-------------------|---------|
|                                     |                   |        | Minimum            | To Be Well        |
|                                     |                   |        | For Capital        | Capitalized Under |
|                                     |                   |        | Adequacy           | Prompt Corrective |
|                                     | Actual                 | Purposes:   | Action Provisions: |
|                                     | Amount                 | Ratio  | Amount             | Ratio             | Amount  | Ratio |
|                                     | (Dollars in Thousands) |
| As of December 31, 2009:                 |                   |        |               |              |    |   |
| Total capital (to risk-weighted assets)  |                   |        |               |              |    |   |
|    Company                | $40,326                | 11.57%      | $27,877            | 8.00%             | N/A     | N/A |
|    Bank                   | $40,336                | 11.60%      | $27,811            | 8.00%             | $34,764 | 10.00% |
|                                     |                   |        |               |              |    |   |
| Tier I capital (to risk-weighted assets) |                   |        |               |              |    |   |
|    Company                | $36,875                | 10.58%      | $13,939            | 4.00%             | N/A     | N/A |
|    Bank                   | $36,885                | 10.61%      | $13,906            | 4.00%             | $20,858 | 6.00% |
|                                     |                   |        |               |              |    |   |
| Tier I capital (to average assets)       |                   |        |               |              |    |   |
|    Company                | $36,875                | 7.50%       | $19,674            | 4.00%             | N/A     | N/A |
|    Bank                   | $36,885                | 7.51%       | $19,643            | 4.00%             | $24,554 | 5.00% |

| Level 1 | Quoted prices in active markets for identical assets or liabilities.  Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasury, other U.S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 2 | Observable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.  Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.  This category generally includes certain derivative contracts, residential mortgage servicing rights, impaired loans, and OREO which uses the market approach. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.  For example, this category generally includes certain private equity investments, retained residual interest in securitizations, and highly-structured or long-term derivative contracts. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| December 31, 2010          |   | Level 1 |      |   | Level 2 |   |       | Total  |   |
|----------------------------|--------|---------|-----------|--------|---------|--------|------------|--------|--------|
| Assets:                    |   |    |      |   |    |   |       |   |   |
| U.S. GSE debt securities   |   | $       | 0         |   |    | $      | 16,313,390 |   |   | $ | 16,313,390 |   |
| U.S. Government securities |   |    | 4,038,740 |   |    |   | 1,035,946  |   |   |   | 5,074,686 |   |
| U.S. GSE preferred stock   |   |    | 42,360    |   |    |   | 0          |   |   |   | 42,360 |   |
|                       |   |    |      |   |    |   |       |   |   |   |   |   |
| December 31, 2009          |   |    |      |   |    |   |       |   |   |   |   |   |
| Assets:                    |   |    |      |   |    |   |       |   |   |   |   |   |
| U.S. GSE debt securities   |   | $       | 0         |   |    | $      | 18,806,650 |   |   | $ | 18,806,650 |   |
| U.S. Government securities |   |    | 1,003,233 |   |    |   | 4,093,459  |   |   |   | 5,096,692 |   |
| U.S. GSE preferred stock   |   |    | 71,488    |   |    |   | 0          |   |   |   | 71,488 |   |

| December 31, 2010                        |   | Level 2 |      |
|------------------------------------------|--------|---------|-----------|
| Assets:                                  |   |    |      |
| Mortgage servicing rights                |   | $       | 1,076,708 |   |
| Impaired loans, net of related allowance |   |    | 2,870,411 |   |
| OREO                                     |   |    | 1,210,300 |   |
|                                     |   |    |      |   |
| December 31, 2009                        |   |    |      |   |
| Assets:                                  |   |    |      |   |
| Mortgage servicing rights                |   | $       | 1,011,360 |   |
| Impaired loans, net of related allowance |   |    | 2,186,171 |   |
| OREO                                     |   |    | 743,000   |   |

|                                             |   | December 31, 2010      |    |   | December 31, 2009 |   |
|--------------------------------------------------|--------|------------------------|---------|--------|-------------------|--------|
|                                             |   | Carrying               |    |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                                             |   | Amount                 |    |   | Value             |   |   | Amount |   |   | Value |   |
|                                             |   | (Dollars in Thousands) |    |
| Financial assets:                                |   |                   |    |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                        |   | $                      | 51,448  |   |              | $      | 51,448 |   |   | $ | 9,603 |   |   | $ | 9,603 |   |
| Securities held-to-maturity                      |   |                   | 37,441  |   |              |   | 38,157 |   |   |   | 44,766 |   |   |   | 45,543 |   |
| Securities available-for-sale                    |   |                   | 21,430  |   |              |   | 21,430 |   |   |   | 23,975 |   |   |   | 23,975 |   |
| Restricted equity securities                     |   |                   | 4,309   |   |              |   | 4,309 |   |   |   | 3,907 |   |   |   | 3,907 |   |
| Loans and loans held-for-sale, net               |   |                   | 387,631 |   |              |   | 397,123 |   |   |   | 378,656 |   |   |   | 388,199 |   |
| Mortgage servicing rights                        |   |                   | 1,077   |   |              |   | 1,056 |   |   |   | 933 |   |   |   | 1,011 |   |
| Accrued interest receivable                      |   |                   | 1,790   |   |              |   | 1,790 |   |   |   | 1,895 |   |   |   | 1,895 |   |
|                                             |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                           |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                         |   |                   | 438,192 |   |              |   | 440,913 |   |   |   | 418,786 |   |   |   | 420,933 |   |
| Federal funds purchased and other borrowed funds |   |                   | 33,010  |   |              |   | 33,250 |   |   |   | 13,411 |   |   |   | 13,549 |   |
| Repurchase agreements                            |   |                   | 19,108  |   |              |   | 19,108 |   |   |   | 19,042 |   |   |   | 19,042 |   |
| Capital lease obligations                        |   |                   | 835     |   |              |   | 835 |   |   |   | 877 |   |   |   | 877 |   |
| Subordinated debentures                          |   |                   | 12,887  |   |              |   | 13,155 |   |   |   | 12,887 |   |   |   | 11,370 |   |
| Accrued interest payable                         |   |                   | 192     |   |              |   | 192 |   |   |   | 234 |   |   |   | 234 |   |

----

| Community Bancorp. (Parent Company Only)                                                                    |   |
|-------------------------------------------------------------------------------------------------------------|--------|
| Condensed Balance Sheets                                                                                    |   |
| December 31, 2010 and 2009                                                                                  |   |
|                                                                                                        |   |   |   |   |   |   |
| Assets                                                                                                      |   | 2010 |   |   | 2009 |   |
|                                                                                                        |   |   |   |   |   |   |
|    Cash                                                                                      |   | $ | 123,116 |   |   | $ | 125,967 |   |
|    Investment in subsidiary - Community National Bank                                        |   |   | 51,436,841 |   |   |   | 49,196,444 |   |
|    Investment in Capital Trust                                                               |   |   | 387,000 |   |   |   | 387,000 |   |
|    Other assets                                                                              |   |   | 441,802 |   |   |   | 442,724 |   |
|         Total assets                                                |   | $ | 52,388,759 |   |   | $ | 50,152,135 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity                                                                        |   |   |   |   |   |   |   |   |
|  Liabilities                                                                                           |   |   |   |   |   |   |   |   |
|    Junior subordinated debentures                                                            |   | $ | 12,887,000 |   |   | $ | 12,887,000 |   |
|    Dividends payable                                                                         |   |   | 374,090 |   |   |   | 375,297 |   |
|         Total liabilities                                           |   |   | 13,261,090 |   |   |   | 13,262,297 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
|  Shareholders' Equity                                                                                  |   |   |   |   |   |   |   |   |
|    Preferred stock, 1,000,000 shares authorized, 25 shares issued and outstanding at         |   |   |   |   |   |   |   |   |
|      December 31, 2010 and 2009 ($100,000 liquidation value)                       |   |   | 2,500,000 |   |   |   | 2,500,000 |   |
|    Common stock - $2.50 par value; 10,000,000 shares authorized, at December 31,             |   |   |   |   |   |   |   |   |
|     2010 and 2009, and 4,834,615 and  4,759,913 shares issued at December 31, |   |   |   |   |   |   |   |   |
|     2010 and 2009, respectively (including 19,312 and 21,636 shares issued              |   |   |   |   |   |   |   |   |
|     February 1, 2011 and 2010, respectively)                                            |   |   | 12,086,538 |   |   |   | 11,899,783 |   |
|     Additional paid-in capital                                                          |   |   | 26,718,403 |   |   |   | 26,192,359 |   |
|    Retained earnings (accumulated deficit)                                                   |   |   | 368,848 |   |   |   | (1,192,409 | ) |
|    Accumulated other comprehensive income                                                    |   |   | 76,657 |   |   |   | 112,882 |   |
|    Less: treasury stock, at cost; 210,101 shares at December 31, 2010 and 2009               |   |   | (2,622,777 | ) |   |   | (2,622,777 | ) |
|         Total shareholders' equity                                  |   |   | 39,127,669 |   |   |   | 36,889,838 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
|         Total liabilities and shareholders' equity                  |   | $ | 52,388,759 |   |   | $ | 50,152,135 |   |

----

| Community Bancorp. (Parent Company Only)                       |   |
|----------------------------------------------------------------|--------|
| Condensed Statements of Income                                 |   |
| Years Ended December 31, 2010 and 2009                         |   |
|                                                           |   |   |   |   |   |   |
|                                                           |   | 2010 |   |   | 2009 |   |
| Income                                                         |   |   |   |   |   |   |
|    Bank subsidiary distributions                |   | $ | 2,527,000 |   |   | $ | 2,611,000 |   |
|    Dividends on Capital Trust                   |   |   | 29,257 |   |   |   | 29,257 |   |
|       Total income               |   |   | 2,556,257 |   |   |   | 2,640,257 |   |
|                                                           |   |   |   |   |   |   |   |   |
| Expense                                                        |   |   |   |   |   |   |   |   |
|    Interest on junior subordinated debentures   |   |   | 974,257 |   |   |   | 974,257 |   |
|    Administrative and other                     |   |   | 354,416 |   |   |   | 357,130 |   |
|        Total expense        |   |   | 1,328,673 |   |   |   | 1,331,387 |   |
|                                                           |   |   |   |   |   |   |   |   |
| Income before applicable income tax benefit and equity in      |   |   |   |   |   |   |   |   |
|   undistributed net income of subsidiary             |   |   | 1,227,584 |   |   |   | 1,308,870 |   |
| Applicable income tax benefit                                  |   |   | 441,802 |   |   |   | 442,724 |   |
|                                                           |   |   |   |   |   |   |   |   |
| Income before equity in undistributed net income of subsidiary |   |   | 1,669,386 |   |   |   | 1,751,594 |   |
| Equity in undistributed net income of subsidiary               |   |   | 2,276,622 |   |   |   | 1,996,268 |   |
|         Net income     |   | $ | 3,946,008 |   |   | $ | 3,747,862 |   |

| Community Bancorp. (Parent Company Only)                                                             |   |
|------------------------------------------------------------------------------------------------------|--------|
| Condensed Statements of Cash Flows                                                                   |   |
| Years Ended December 31, 2010 and 2009                                                               |   |
|                                                                                                 |   |   |   |   |   |   |
|                                                                                                 |   | 2010 |   |   | 2009 |   |
| Cash Flows from Operating Activities                                                                 |   |   |   |   |   |   |
|   Net income                                                                               |   | $ | 3,946,008 |   |   | $ | 3,747,862 |   |
|   Adjustments to reconcile net income to net cash provided by                              |   |   |   |   |   |   |   |   |
|     operating activities                                                         |   |   |   |   |   |   |   |   |
|       Equity in undistributed net income of subsidiary                 |   |   | (2,276,622 | ) |   |   | (1,996,268 | ) |
|       Decrease in income taxes receivable                              |   |   | 922 |   |   |   | 19,765 |   |
|          Net cash provided by operating activities      |   |   | 1,670,308 |   |   |   | 1,771,359 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                                                 |   |   |   |   |   |   |   |   |
|       Dividends paid on preferred stock                                |   |   | (187,500 | ) |   |   | (187,500 | ) |
|       Dividends paid on common stock                                   |   |   | (1,485,659 | ) |   |   | (1,674,947 | ) |
|          Net cash used in financing activities          |   |   | (1,673,159 | ) |   |   | (1,862,447 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |
|          Net decrease in cash                           |   |   | (2,851 | ) |   |   | (91,088 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash                                                                                                 |   |   |   |   |   |   |   |   |
|       Beginning                                                        |   |   | 125,967 |   |   |   | 217,055 |   |
|       Ending                                                           |   | $ | 123,116 |   |   | $ | 125,967 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash Received for Income Taxes                                                                       |   | $ | 442,724 |   |   | $ | 462,489 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash Paid for Interest                                                                               |   | $ | 974,257 |   |   | $ | 974,257 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Common Shares Dividends paid:                                                                        |   |   |   |   |   |   |   |   |
|       Dividends declared                                               |   | $ | 2,197,251 |   |   | $ | 2,160,050 |   |
|       Decrease in dividends payable attributable to dividends declared |   |   | 1,207 |   |   |   | 151,508 |   |
|       Dividends reinvested                                             |   |   | (712,799 | ) |   |   | (636,611 | ) |
|                                                                                                 |   | $ | 1,485,659 |   |   | $ | 1,674,947 |   |

----

|                      |   | Quarters in 2010 ended |      |
|---------------------------|--------|------------------------|-----------|
|                      |   | March 31,              |      |   | June 30, |   |   | Sept. 30, |   |   | Dec. 31, |   |
|                      |   |                   |      |   |   |   |   |   |   |   |   |   |
| Interest income           |   | $                      | 5,887,239 |   |   | $ | 5,899,121 |   |   | $ | 5,951,639 |   |   | $ | 5,948,984 |   |
| Interest expense          |   |                   | 1,644,096 |   |   |   | 1,680,487 |   |   |   | 1,610,258 |   |   |   | 1,592,896 |   |
| Provision for loan losses |   |                   | 125,001   |   |   |   | 299,999 |   |   |   | 433,334 |   |   |   | 158,334 |   |
| Non-interest income       |   |                   | 1,231,801 |   |   |   | 1,186,432 |   |   |   | 1,230,782 |   |   |   | 1,992,287 |   |
| Non-interest expense      |   |                   | 4,288,821 |   |   |   | 4,360,458 |   |   |   | 4,326,559 |   |   |   | 4,306,312 |   |
| Net income                |   |                   | 938,912   |   |   |   | 732,533 |   |   |   | 787,805 |   |   |   | 1,486,758 |   |
| Earnings per common share |   |                   | 0.20      |   |   |   | 0.15 |   |   |   | 0.16 |   |   |   | 0.31 |   |
|                      |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      |   | Quarters in 2009 ended |      |
|                      |   | March 31,              |      |   | June 30, |   |   | Sept. 30, |   |   | Dec. 31, |   |
|                      |   |                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income           |   | $                      | 6,093,582 |   |   | $ | 5,960,287 |   |   | $ | 5,986,293 |   |   | $ | 6,079,110 |   |
| Interest expense          |   |                   | 2,131,619 |   |   |   | 1,951,053 |   |   |   | 1,887,921 |   |   |   | 1,713,887 |   |
| Provision for loan losses |   |                   | 125,001   |   |   |   | 125,001 |   |   |   | 175,001 |   |   |   | 200,001 |   |
| Non-interest income       |   |                   | 1,151,556 |   |   |   | 1,852,451 |   |   |   | 1,381,757 |   |   |   | 1,270,669 |   |
| Non-interest expense      |   |                   | 4,500,111 |   |   |   | 4,755,111 |   |   |   | 4,357,764 |   |   |   | 4,420,692 |   |
| Net income                |   |                   | 683,253   |   |   |   | 1,007,565 |   |   |   | 1,013,222 |   |   |   | 1,043,822 |   |
| Earnings per common share |   |                   | 0.14      |   |   |   | 0.21 |   |   |   | 0.21 |   |   |   | 0.23 |   |

|                                                   |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Income                                                 |   |   |    |   |   |   |
|    Loan documentation fees              |   | $      | 652,876 |   |   | $      | 658,450 |   |
|    Loan servicing fees                  |   |   | 471,907 |   |   |   | 421,623 |   |
|                                                   |   |   |    |   |   |   |   |   |
| Expenses                                               |   |   |    |   |   |   |   |   |
|    Marketing                            |   | $      | 315,000 |   |   | $      | 314,772 |   |
|    State deposit tax                    |   |   | 476,315 |   |   |   | 414,142 |   |
|    Amortization of limited partnerships |   |   | 495,592 |   |   |   | 983,904 |   |
|    ATM fees                             |   |   | 292,328 |   |   |   | 383,536 |   |

----

|                                   | December 31, |
|----------------------------------------|--------------|
|                                   | 2010         | 2009 |
|                                   |         |   |
| Return on average assets               | 0.76%        | 0.76% |
| Return on average equity               | 10.43%       | 10.44% |
| Dividend payout ratio (1)              | 58.54%       | 60.76% |
| Average equity to average assets ratio | 7.26%        | 7.27% |

----

| SELECTED FINANCIAL DATA (1)                                                                                                                                                               |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                      |   |
| (Not covered by Report of Independent Public Accountants)                                                                                                                                 |   |
| (Dollars in thousands, except per share data)                                                                                                                                             |   |
|                                                                                                                                                                                      |   |
| Year Ended December 31,                                                                                                                                                                   |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest income                                                                                                                                                                     |   | $ | 23,687 |   |   | $ | 24,119 |   |   | $ | 27,088 |   |   | $ | 21,693 |   |   | $ | 20,976 |   |
| Less:                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest expense                                                                                                                                                                    |   |   | 6,528 |   |   |   | 7,684 |   |   |   | 10,503 |   |   |   | 8,491 |   |   |   | 7,703 |   |
|   Net interest income                                                                                                                                                           |   |   | 17,159 |   |   |   | 16,435 |   |   |   | 16,585 |   |   |   | 13,202 |   |   |   | 13,273 |   |
| Less:                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                                                                                                                                 |   |   | 1,017 |   |   |   | 625 |   |   |   | 499 |   |   |   | 148 |   |   |   | 138 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest income                                                                                                                                                                       |   |   | 5,641 |   |   |   | 5,656 |   |   |   | 4,036 |   |   |   | 3,448 |   |   |   | 3,124 |   |
| Less:                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expense                                                                                                                                                                      |   |   | 17,282 |   |   |   | 18,034 |   |   |   | 18,245 |   |   |   | 12,476 |   |   |   | 12,154 |   |
|   Income before income taxes                                                                                                                                                    |   |   | 4,502 |   |   |   | 3,433 |   |   |   | 1,877 |   |   |   | 4,026 |   |   |   | 4,105 |   |
| Less:                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Applicable income tax expense (benefit)(2)                                                                                                                                                |   |   | 556 |   |   |   | (315 | ) |   |   | (324 | ) |   |   | 669 |   |   |   | 730 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net Income                                                                                                                                                              |   | $ | 3,946 |   |   | $ | 3,748 |   |   | $ | 2,201 |   |   | $ | 3,357 |   |   | $ | 3,375 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loans                                                                                                                                                                                 |   | $ | 387,631 |   |   | $ | 378,656 |   |   | $ | 362,460 |   |   | $ | 353,102 |   |   | $ | 266,396 |   |
| Total assets                                                                                                                                                                              |   |   | 545,933 |   |   |   | 505,287 |   |   |   | 487,799 |   |   |   | 502,032 |   |   |   | 351,815 |   |
| Total deposits                                                                                                                                                                            |   |   | 438,192 |   |   |   | 418,786 |   |   |   | 402,241 |   |   |   | 416,220 |   |   |   | 300,988 |   |
| Borrowed funds                                                                                                                                                                            |   |   | 33,010 |   |   |   | 13,411 |   |   |   | 12,572 |   |   |   | 13,760 |   |   |   | 40 |   |
| Total liabilities                                                                                                                                                                         |   |   | 506,805 |   |   |   | 468,397 |   |   |   | 452,526 |   |   |   | 467,111 |   |   |   | 321,084 |   |
| Total shareholders' equity                                                                                                                                                                |   |   | 39,128 |   |   |   | 36,890 |   |   |   | 35,273 |   |   |   | 34,920 |   |   |   | 30,731 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per Share Data(3)                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per common share                                                                                                                                                                 |   | $ | 0.82 |   |   | $ | 0.79 |   |   | $ | 0.46 |   |   | $ | 0.77 |   |   | $ | 0.78 |   |
| Dividends declared per common share                                                                                                                                                       |   | $ | 0.48 |   |   | $ | 0.48 |   |   | $ | 0.68 |   |   | $ | 0.67 |   |   | $ | 0.64 |   |
| Book value per common shares outstanding                                                                                                                                                  |   | $ | 7.92 |   |   | $ | 7.56 |   |   | $ | 7.33 |   |   | $ | 7.94 |   |   | $ | 7.09 |   |
| Weighted average number of                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   common shares outstanding                                                                                                                                                     |   |   | 4,584,145 |   |   |   | 4,504,943 |   |   |   | 4,430,657 |   |   |   | 4,365,378 |   |   |   | 4,302,456 |   |
| Number of common shares outstanding                                                                                                                                                  |   |   | 4,624,514 |   |   |   | 4,549,812 |   |   |   | 4,469,105 |   |   |   | 4,399,167 |   |   |   | 4,130,109 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) The following does not include LyndonBank, acquired on December 31, 2007: All data for 2006 and 2007 income statement and earnings per share data.                                    |   |
| (2) Applicable income tax expense (benefit) above includes the income tax effect, assuming a 34% tax rate, on securities gains which totaled $0 in 2010, $160,159 in 2009, $0 in 2008 and |   |
|       2007, and $19,338 in 2006.                                                                                                                                 |   |
| (3) All share and per share data for prior periods restated to reflect a 5% stock dividend declared in June 2007.                                                                         |   |

----

|                                                  |   | For years ended        |   |
|-------------------------------------------------------|--------|------------------------|--------|
|                                                  |   | December 31,           |   |
|                                                  |   | 2010                   |   |   | 2009 |   |
|                                                  |   | (Dollars in Thousands) |   |
|                                                  |   |                   |   |   |   |   |
| Net interest income as presented                      |   | $                      | 17,159 |   |   | $ | 16,435 |   |
| Effect of tax-exempt income                           |   |                   | 662    |   |   |   | 705 |   |
|    Net interest income, tax equivalent |   | $                      | 17,821 |   |   | $ | 17,140 |   |

| Table A                                                                                                                                                                  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Average Balances and Interest Rates                                                                                                                                      |   |
|                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                     |   |   |   |   | 2010 |   |   |   |   |   |   |   |   | 2009 |   |   |   |   |
|                                                                                                                                                                     |   | Average |   |   | Income/ |   |   | Rate/ |   |   | Average |   |   | Income/ |   |   | Rate/ |   |
|                                                                                                                                                                     |   | Balance |   |   | Expense |   |   | Yield |   |   | Balance |   |   | Expense |   |   | Yield |   |
| Interest-Earning Assets                                                                                                                                                  |   | (Dollars in Thousands) |   |
|                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Loans (1)                                                                                                                                                          |   | $ | 387,268 |   |   | $ | 21,976 |   |   |   | 5.67 | % |   | $ | 370,527 |   |   | $ | 21,908 |   |   |   | 5.91 | % |
|  Taxable investment securities                                                                                                                                      |   |   | 22,681 |   |   |   | 344 |   |   |   | 1.52 | % |   |   | 25,344 |   |   |   | 779 |   |   |   | 3.07 | % |
|  Tax exempt investment securities                                                                                                                                   |   |   | 48,031 |   |   |   | 1,945 |   |   |   | 4.05 | % |   |   | 46,299 |   |   |   | 2,072 |   |   |   | 4.48 | % |
|  Sweep and interest earning accounts                                                                                                                                |   |   | 15,205 |   |   |   | 19 |   |   |   | 0.12 | % |   |   | 170 |   |   |   | 0 |   |   |   | 0.00 | % |
|  Other investments                                                                                                                                                  |   |   | 975 |   |   |   | 65 |   |   |   | 6.56 | % |   |   | 975 |   |   |   | 65 |   |   |   | 6.67 | % |
|      Total                                                                                                                                      |   | $ | 474,160 |   |   | $ | 24,349 |   |   |   | 5.14 | % |   | $ | 443,315 |   |   | $ | 24,824 |   |   |   | 5.60 | % |
|                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Liabilities                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  NOW and money market funds                                                                                                                                         |   | $ | 153,674 |   |   | $ | 1,349 |   |   |   | 0.88 | % |   | $ | 126,369 |   |   | $ | 1,293 |   |   |   | 1.02 | % |
|  Savings deposits                                                                                                                                                   |   |   | 56,027 |   |   |   | 164 |   |   |   | 0.29 | % |   |   | 53,218 |   |   |   | 163 |   |   |   | 0.31 | % |
|  Time deposits                                                                                                                                                      |   |   | 149,528 |   |   |   | 3,246 |   |   |   | 2.17 | % |   |   | 169,267 |   |   |   | 4,692 |   |   |   | 2.77 | % |
|  Federal funds purchased and other borrowed funds                                                                                                                   |   |   | 33,806 |   |   |   | 547 |   |   |   | 1.62 | % |   |   | 21,189 |   |   |   | 235 |   |   |   | 1.11 | % |
|  Repurchase agreements                                                                                                                                              |   |   | 19,427 |   |   |   | 179 |   |   |   | 0.92 | % |   |   | 18,401 |   |   |   | 255 |   |   |   | 1.39 | % |
|  Capital lease obligations                                                                                                                                          |   |   | 854 |   |   |   | 69 |   |   |   | 8.08 | % |   |   | 894 |   |   |   | 72 |   |   |   | 8.05 | % |
|  Junior subordinated debentures                                                                                                                                     |   |   | 12,887 |   |   |   | 974 |   |   |   | 7.56 | % |   |   | 12,887 |   |   |   | 974 |   |   |   | 7.56 | % |
|      Total                                                                                                                                      |   | $ | 426,203 |   |   | $ | 6,528 |   |   |   | 1.53 | % |   | $ | 402,225 |   |   | $ | 7,684 |   |   |   | 1.91 | % |
|                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                                                                                                      |   |   |   |   |   | $ | 17,821 |   |   |   |   |   |   |   |   |   |   | $ | 17,140 |   |   |   |   |   |
| Net interest spread (2)                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   | 3.61 | % |   |   |   |   |   |   |   |   |   |   | 3.69 | % |
| Net interest margin (3)                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   | 3.76 | % |   |   |   |   |   |   |   |   |   |   | 3.87 | % |
|                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Included in gross loans are non-accrual loans with an average balance of $4,426,331 and $3,193,691 for the year ended December 31, 2010 and 2009, respectively. |   |
|       Loans are stated before deduction of unearned discount and allowance for loan losses.                                                |   |
| (2) Net interest spread is the difference between the yield on earning assets and the rate paid on interest-bearing liabilities.                                    |   |
| (3) Net interest margin is net interest income divided by average earning assets.                                                                                   |   |

| Table B                                                                  |   |
|--------------------------------------------------------------------------|--------|
| Changes in Interest Income and Interest Expense                          |   |
|                                                                     |   |   |   |   |   |   |   |   |   |
|                                                                     |   | 2010 vs. 2009 |   |
|                                                                     |   | Variance |   |   | Variance |   |   |   |   |
| Rate / Volume                                                            |   | Due to |   |   | Due to |   |   | Total |   |
|                                                                     |   | Rate (1) |   |   | Volume (1) |   |   | Variance |   |
|                                                                     |   | (Dollars in Thousands) |   |
| Interest-Earning Assets                                                  |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |
|  Loans                                                              |   | $ | (921 | ) |   | $ | 989 |   |   | $ | 68 |   |
|  Taxable investment securities                                      |   |   | (396 | ) |   |   | (40 | ) |   |   | (436 | ) |
|  Tax exempt investment securities                                   |   |   | (204 | ) |   |   | 78 |   |   |   | (126 | ) |
|  Sweep and interest earning accounts                                |   |   | (17 | ) |   |   | 36 |   |   |   | 19 |   |
|  Other investments                                                  |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|      Total                                      |   | $ | (1,538 | ) |   | $ | 1,063 |   |   | $ | (475 | ) |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Liabilities                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|  NOW and money market funds                                         |   | $ | (222 | ) |   | $ | 278 |   |   | $ | 56 |   |
|  Savings deposits                                                   |   |   | (8 | ) |   |   | 9 |   |   |   | 1 |   |
|  Time deposits                                                      |   |   | (1,018 | ) |   |   | (428 | ) |   |   | (1,446 | ) |
|  Federal funds purchased and other borrowed funds                   |   |   | 172 |   |   |   | 140 |   |   |   | 312 |   |
|  Repurchase agreements                                              |   |   | (90 | ) |   |   | 14 |   |   |   | (76 | ) |
|  Capital lease obligations                                          |   |   | 0 |   |   |   | (3 | ) |   |   | (3 | ) |
|  Junior subordinated debentures                                     |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|      Total                                      |   | $ | (1,166 | ) |   | $ | 10 |   |   | $ | (1,156 | ) |
|        Changes in net interest income |   | $ | (372 | ) |   | $ | 1,053 |   |   | $ | 681 |   |

| (1)  Items which have shown a year-to-year increase in volume have variances allocated as follows:                      |
|-----------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                              | Variance due to rate = Change in rate x new volume |
|                                                                                                                              | Variance due to volume = Change in volume x old rate |
|       Items which have shown a year-to-year decrease in volume have variances allocated as follows: |
|                                                                                                                              | Variance due to rate = Change in rate x old volume |
|                                                                                                                              | Variance due to volume = Change in volume x new rate |

----

| Distribution of Assets, Liabilities and Shareholder's Equity                           |   |
|----------------------------------------------------------------------------------------|--------|
|                                                                                   |   |
|                                                                                   |   | Year ended December 31, |   |
|                                                                                   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Average Assets                                                                         |   | Balance |   |   | % |   |   | Balance |   |   | % |   |   | Balance |   |   | % |   |
|                                                                                   |   | (Dollars in Thousands) |   |
| Cash and due from banks                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Non-interest bearing                                                             |   | $ | 3,588 |   |   |   | 0.69 | % |   | $ | 8,672 |   |   |   | 1.76 | % |   | $ | 9,504 |   |   |   | 1.93 | % |
|  Federal funds sold and overnight deposits                                        |   |   | 15,205 |   |   |   | 2.92 | % |   |   | 170 |   |   |   | 0.03 | % |   |   | 1,734 |   |   |   | 0.35 | % |
| Taxable investment securities(1)                                                       |   |   | 22,739 |   |   |   | 4.36 | % |   |   | 25,344 |   |   |   | 5.13 | % |   |   | 31,875 |   |   |   | 6.49 | % |
| Tax-exempt investment securities(1)                                                    |   |   | 48,031 |   |   |   | 9.22 | % |   |   | 46,299 |   |   |   | 9.38 | % |   |   | 45,077 |   |   |   | 9.17 | % |
| Other securities(1)                                                                    |   |   | 3,989 |   |   |   | 0.77 | % |   |   | 3,907 |   |   |   | 0.79 | % |   |   | 3,775 |   |   |   | 0.77 | % |
|   Total investment securities                                                |   |   | 74,759 |   |   |   | 14.35 | % |   |   | 75,550 |   |   |   | 15.30 | % |   |   | 80,727 |   |   |   | 16.43 | % |
| Gross loans                                                                            |   |   | 387,268 |   |   |   | 74.32 | % |   |   | 370,527 |   |   |   | 75.03 | % |   |   | 358,127 |   |   |   | 72.86 | % |
| Reserve for loan losses and accrued fees                                               |   |   | (3,655 | ) |   |   | -0.70 | % |   |   | (3,624 | ) |   |   | -0.73 | % |   |   | (3,399 | ) |   |   | -0.69 | % |
| Premises and equipment                                                                 |   |   | 13,118 |   |   |   | 2.52 | % |   |   | 14,286 |   |   |   | 2.89 | % |   |   | 15,570 |   |   |   | 3.17 | % |
| Other real estate owned                                                                |   |   | 919 |   |   |   | 0.18 | % |   |   | 435 |   |   |   | 0.09 | % |   |   | 63 |   |   |   | 0.01 | % |
| Investment in Capital Trust                                                            |   |   | 332 |   |   |   | 0.06 | % |   |   | 387 |   |   |   | 0.08 | % |   |   | 387 |   |   |   | 0.08 | % |
| Bank owned life insurance                                                              |   |   | 3,869 |   |   |   | 0.74 | % |   |   | 3,748 |   |   |   | 0.76 | % |   |   | 3,622 |   |   |   | 0.74 | % |
| Core deposit intangible                                                                |   |   | 2,383 |   |   |   | 0.46 | % |   |   | 2,980 |   |   |   | 0.60 | % |   |   | 3,710 |   |   |   | 0.76 | % |
| Goodwill                                                                               |   |   | 11,574 |   |   |   | 2.22 | % |   |   | 11,574 |   |   |   | 2.34 | % |   |   | 10,785 |   |   |   | 2.19 | % |
| Other assets                                                                           |   |   | 11,699 |   |   |   | 2.24 | % |   |   | 9,135 |   |   |   | 1.85 | % |   |   | 10,665 |   |   |   | 2.17 | % |
|      Total average assets                                     |   | $ | 521,059 |   |   |   | 100 | % |   | $ | 493,840 |   |   |   | 100 | % |   | $ | 491,495 |   |   |   | 100 | % |
|                                                                                   |   |
| Average Liabilities                                                                    |   |
|                                                                                   |   |
| Demand deposits                                                                        |   | $ | 54,115 |   |   |   | 10.39 | % |   | $ | 51,989 |   |   |   | 10.53 | % |   | $ | 55,053 |   |   |   | 11.20 | % |
| Now and money market accounts                                                          |   |   | 153,674 |   |   |   | 29.49 | % |   |   | 126,369 |   |   |   | 25.59 | % |   |   | 123,203 |   |   |   | 25.07 | % |
| Savings accounts                                                                       |   |   | 56,027 |   |   |   | 10.75 | % |   |   | 53,218 |   |   |   | 10.77 | % |   |   | 50,087 |   |   |   | 10.19 | % |
| Time deposits                                                                          |   |   | 149,528 |   |   |   | 28.70 | % |   |   | 169,267 |   |   |   | 34.28 | % |   |   | 176,916 |   |   |   | 36.00 | % |
|      Total average deposits                                   |   |   | 413,344 |   |   |   | 79.33 | % |   |   | 400,843 |   |   |   | 81.17 | % |   |   | 405,259 |   |   |   | 82.46 | % |
|                                                                                   |   |
| Other borrowed funds                                                                   |   |   | 33,806 |   |   |   | 6.49 | % |   |   | 22,083 |   |   |   | 4.47 | % |   |   | 14,662 |   |   |   | 2.98 | % |
| Repurchase agreements                                                                  |   |   | 19,427 |   |   |   | 3.73 | % |   |   | 18,401 |   |   |   | 3.73 | % |   |   | 16,319 |   |   |   | 3.32 | % |
| Junior subordinated debentures                                                         |   |   | 12,887 |   |   |   | 2.47 | % |   |   | 12,887 |   |   |   | 2.61 | % |   |   | 12,887 |   |   |   | 2.62 | % |
| Other liabilities                                                                      |   |   | 3,778 |   |   |   | 0.72 | % |   |   | 3,721 |   |   |   | 0.75 | % |   |   | 7,452 |   |   |   | 1.52 | % |
|      Total average liabilities                                |   |   | 483,242 |   |   |   | 92.74 | % |   |   | 457,935 |   |   |   | 92.73 | % |   |   | 456,579 |   |   |   | 92.90 | % |
|                                                                                   |   |
| Average Shareholders' Equity                                                           |   |
|                                                                                   |   |
| Preferred stock                                                                        |   |   | 2,500 |   |   |   | 0.48 | % |   |   | 2,500 |   |   |   | 0.50 | % |   |   | 2,500 |   |   |   | 0.51 | % |
| Common stock                                                                           |   |   | 11,919 |   |   |   | 2.29 | % |   |   | 11,787 |   |   |   | 2.39 | % |   |   | 11,601 |   |   |   | 2.36 | % |
| Additional paid-in capital                                                             |   |   | 26,299 |   |   |   | 5.05 | % |   |   | 25,892 |   |   |   | 5.24 | % |   |   | 25,488 |   |   |   | 5.19 | % |
| Retained earnings                                                                      |   |   | (397 | ) |   |   | -0.08 | % |   |   | (1,896 | ) |   |   | -0.38 | % |   |   | (2,060 | ) |   |   | -0.42 | % |
| Less: Treasury stock                                                                   |   |   | (2,623 | ) |   |   | -0.50 | % |   |   | (2,623 | ) |   |   | -0.53 | % |   |   | (2,623 | ) |   |   | -0.54 | % |
| Accumulated other comprehensive income(1)                                              |   |   | 119 |   |   |   | 0.02 | % |   |   | 245 |   |   |   | 0.05 | % |   |   | 10 |   |   |   | 0.00 | % |
|      Total average shareholders' equity                       |   |   | 37,817 |   |   |   | 7.26 | % |   |   | 35,905 |   |   |   | 7.27 | % |   |   | 34,916 |   |   |   | 7.10 | % |
|      Total average liabilities and shareholders’ equity |   | $ | 521,059 |   |   |   | 100 | % |   | $ | 493,840 |   |   |   | 100 | % |   | $ | 491,495 |   |   |   | 100 | % |

| (1) | In accordance with accounting for investments, securities classified as held-to-maturity are carried at book value and securities classified as available-for-sale are carried at fair value with the unrealized gain (loss), net of applicable income taxes, reported as a net amount in accumulated other comprehensive income (loss).  The Company does not carry, nor does it intend to carry, securities classified as trading. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Maturity Date                 |   | (Dollars in Thousands) |   |
|-------------------------------|--------|------------------------|--------|
|                          |   |                   |   |
| 3 months or less              |   | $                      | 5,045  |   |
| Over 3 through 6 months       |   |                   | 14,454 |   |
| Over 6 through 12 months      |   |                   | 6,441  |   |
| Over 12 months                |   |                   | 26,074 |   |
|     Total |   | $                      | 52,014 |   |

----

| One Year Horizon                                      | Two Year Horizon      |
|-------------------------------------------------------|-----------------------|
| Rate Change        | Percent Change in NII | Rate Change      | Percent Change in NII |
|                                                  |                  |   |   |
| Down 100 basis points                                 | -1.11%                | Down 100 basis points | -5.50% |
| Up 200 basis points                                   | 4.54%                 | Up 200 basis points | 12.80% |

----

| Composition of Loan Portfolio (1)                                                                                                                       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                    |   |
|                                                                                                                                                    |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                    |   | Total |   |   | % of |   |   | Total |   |   | % of |   |   | Total |   |   | % of |   |   | Total |   |   | % of |   |   | Total |   |   | % of |   |
|                                                                                                                                                    |   | Loans |   |   | Total |   |   | Loans |   |   | Total |   |   | Loans |   |   | Total |   |   | Loans |   |   | Total |   |   | Loans |   |   | Total |   |
|                                                                                                                                                    |   | (Dollars in Thousands) |   |
| Real estate loans                                                                                                                                       |   |
| Construction & land                                                                                                                                 |   |
|    development                                                                                                                           |   | $ | 19,126 |   |   |   | 4.89 | % |   | $ | 16,869 |   |   |   | 4.41 | % |   | $ | 15,204 |   |   |   | 4.15 | % |   | $ | 12,896 |   |   |   | 3.62 | % |   | $ | 11,889 |   |   |   | 4.42 | % |
|  Farm land                                                                                                                                         |   |   | 10,556 |   |   |   | 2.70 | % |   |   | 10,039 |   |   |   | 2.63 | % |   |   | 8,534 |   |   |   | 2.33 | % |   |   | 9,646 |   |   |   | 2.70 | % |   |   | 3,217 |   |   |   | 1.19 | % |
|  1-4 Family residential                                                                                                                            |   |   | 213,835 |   |   |   | 54.63 | % |   |   | 216,458 |   |   |   | 56.62 | % |   |   | 213,279 |   |   |   | 58.28 | % |   |   | 195,845 |   |   |   | 54.92 | % |   |   | 157,008 |   |   |   | 58.30 | % |
|  Commercial                                                                                                                                        |   |   | 103,813 |   |   |   | 26.52 | % |   |   | 97,620 |   |   |   | 25.54 | % |   |   | 88,547 |   |   |   | 24.19 | % |   |   | 85,576 |   |   |   | 24.00 | % |   |   | 54,236 |   |   |   | 20.14 | % |
| Loans to finance                                                                                                                                        |   |
|    agricultural production                                                                                                               |   |   | 1,158 |   |   |   | 0.29 | % |   |   | 952 |   |   |   | 0.25 | % |   |   | 884 |   |   |   | 0.24 | % |   |   | 2,431 |   |   |   | 0.68 | % |   |   | 224 |   |   |   | 0.08 | % |
| Commercial & industrial                                                                                                                             |   |   | 29,887 |   |   |   | 7.63 | % |   |   | 26,496 |   |   |   | 6.93 | % |   |   | 23,307 |   |   |   | 6.37 | % |   |   | 31,258 |   |   |   | 8.77 | % |   |   | 21,993 |   |   |   | 8.17 | % |
| Consumer loans                                                                                                                                          |   |   | 12,827 |   |   |   | 3.28 | % |   |   | 13,635 |   |   |   | 3.57 | % |   |   | 15,922 |   |   |   | 4.35 | % |   |   | 18,461 |   |   |   | 5.18 | % |   |   | 20,588 |   |   |   | 7.65 | % |
| All other loans                                                                                                                                         |   |   | 231 |   |   |   | 0.06 | % |   |   | 190 |   |   |   | 0.05 | % |   |   | 317 |   |   |   | 0.09 | % |   |   | 459 |   |   |   | 0.13 | % |   |   | 141 |   |   |   | 0.05 | % |
|                                                                                                                                                    |   |
|      Gross loans                                                                                                               |   |   | 391,433 |   |   |   | 100 | % |   |   | 382,259 |   |   |   | 100 | % |   |   | 365,994 |   |   |   | 100 | % |   |   | 356,572 |   |   |   | 100 | % |   |   | 269,296 |   |   |   | 100 | % |
|                                                                                                                                                    |   |
| Less:                                                                                                                                                   |   |
| Allowance for loan                                                                                                                                      |   |
|    losses                                                                                                                                |   |   | (3,728 | ) |   |   |   |   |   |   | (3,451 | ) |   |   |   |   |   |   | (3,233 | ) |   |   |   |   |   |   | (3,026 | ) |   |   |   |   |   |   | (2,268 | ) |   |   |   |   |
|  Deferred loan fees                                                                                                                                |   |   | (74 | ) |   |   |   |   |   |   | (152 | ) |   |   |   |   |   |   | (301 | ) |   |   |   |   |   |   | (443 | ) |   |   |   |   |   |   | (632 | ) |   |   |   |   |
|      net loans                                                                                                                 |   | $ | 387,631 |   |   |   |   |   |   | $ | 378,656 |   |   |   |   |   |   | $ | 362,460 |   |   |   |   |   |   | $ | 353,103 |   |   |   |   |   |   | $ | 266,396 |   |   |   |   |   |
|                                                                                                                                                    |   |
| (1) Includes loans held for sale and the loan portfolio of the acquired LyndonBank at fair value for 2010, 2009, 2008 and 2007; balances presented |   |
| for 2006 do not include LyndonBank loans.                                                                                                               |   |

| Maturity Schedule                               |   |
|-------------------------------------------------|--------|
|                                            |   |
|                                            |   | Fixed Rate Loans |   |   | Variable Rate Loans |   |
|                                            |   | Within |   |   |   | 2 - 5 |   |   | After |   |   |   |   |   | Within |   |   |   | 2 - 5 |   |   | After |   |   |   |   |
|                                            |   | 1 Year |   |   | Years |   |   | 5 Years |   |   | Total |   |   | 1 Year |   |   | Years |   |   | 5 Years |   |   | Total |   |
|                                            |   | (Dollars in Thousands) |   |
| Real estate                                     |   |
|   Construction & land development |   | $ | 2,673 |   |   | $ | 71 |   |   | $ | 5,010 |   |   | $ | 7,754 |   |   | $ | 9,037 |   |   | $ | 1,959 |   |   | $ | 376 |   |   | $ | 11,372 |   |
|   Secured by farm land                |   |   | 60 |   |   |   | 603 |   |   |   | 2,387 |   |   |   | 3,050 |   |   |   | 4,394 |   |   |   | 2,886 |   |   |   | 226 |   |   |   | 7,506 |   |
|   Commercial real estate              |   |   | 1,993 |   |   |   | 1,587 |   |   |   | 9,245 |   |   |   | 12,825 |   |   |   | 32,988 |   |   |   | 57,569 |   |   |   | 431 |   |   |   | 90,988 |   |
| Loans to finance agricultural production        |   |   | 270 |   |   |   | 38 |   |   |   | 93 |   |   |   | 401 |   |   |   | 681 |   |   |   | 76 |   |   |   | 0 |   |   |   | 757 |   |
| Commercial & industrial loans               |   |   | 4,107 |   |   |   | 7,386 |   |   |   | 1,050 |   |   |   | 12,543 |   |   |   | 13,129 |   |   |   | 4,215 |   |   |   | 0 |   |   |   | 17,344 |   |
|                                            |   |
|      Total             |   | $ | 9,103 |   |   | $ | 9,685 |   |   | $ | 17,785 |   |   | $ | 36,573 |   |   | $ | 60,229 |   |   | $ | 66,705 |   |   | $ | 1,033 |   |   | $ | 127,967 |   |

----

| Summary of Loan Loss Experience (1)                               |   |
|-------------------------------------------------------------------|--------|
|                                                              |   |
| December 31,                                                      |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                              |   | (Dollars in Thousands) |   |
|                                                              |   |
| Loans outstanding end of period                                   |   | $ | 391,433 |   |   | $ | 382,259 |   |   | $ | 365,994 |   |   | $ | 356,572 |   |   | $ | 269,296 |   |
| Average loans outstanding during period                           |   | $ | 387,268 |   |   | $ | 370,527 |   |   | $ | 358,127 |   |   | $ | 263,597 |   |   | $ | 263,901 |   |
| Non-accruing loans end of period                                  |   | $ | 4,426 |   |   | $ | 3,844 |   |   | $ | 2,119 |   |   | $ | 1,338 |   |   | $ | 721 |   |
|                                                              |   |
| Loan loss reserve, beginning of period                            |   | $ | 3,451 |   |   | $ | 3,233 |   |   | $ | 3,026 |   |   | $ | 2,268 |   |   | $ | 2,189 |   |
| Loans charged off:                                                |   |
|   Residential real estate                               |   |   | 566 |   |   |   | 110 |   |   |   | 162 |   |   |   | 0 |   |   |   | 6 |   |
|   Commercial real estate                                |   |   | 149 |   |   |   | 80 |   |   |   | 16 |   |   |   | 51 |   |   |   | 17 |   |
|   Commercial                                            |   |   | 32 |   |   |   | 140 |   |   |   | 109 |   |   |   | 25 |   |   |   | 13 |   |
|   Consumer                                              |   |   | 106 |   |   |   | 146 |   |   |   | 115 |   |   |   | 172 |   |   |   | 91 |   |
|           Total |   |   | 853 |   |   |   | 476 |   |   |   | 402 |   |   |   | 248 |   |   |   | 127 |   |
| Recoveries:                                                       |   |
|   Residential real estate                               |   |   | 30 |   |   |   | 2 |   |   |   | 7 |   |   |   | 14 |   |   |   | 1 |   |
|   Commercial real estate                                |   |   | 8 |   |   |   | 18 |   |   |   | 2 |   |   |   | 12 |   |   |   | 6 |   |
|   Commercial                                            |   |   | 42 |   |   |   | 12 |   |   |   | 21 |   |   |   | 3 |   |   |   | 3 |   |
|   Consumer                                              |   |   | 33 |   |   |   | 37 |   |   |   | 80 |   |   |   | 42 |   |   |   | 58 |   |
|           Total |   |   | 113 |   |   |   | 69 |   |   |   | 110 |   |   |   | 71 |   |   |   | 68 |   |
|                                                              |   |
| Net loans charged off                                             |   |   | 740 |   |   |   | 407 |   |   |   | 292 |   |   |   | 177 |   |   |   | 59 |   |
| Provision charged to income                                       |   |   | 1,017 |   |   |   | 625 |   |   |   | 499 |   |   |   | 148 |   |   |   | 138 |   |
| Allowance for loan loss of acquired bank                          |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 787 |   |   |   | 0 |   |
| Loan loss reserve, end of period                                  |   | $ | 3,728 |   |   | $ | 3,451 |   |   | $ | 3,233 |   |   | $ | 3,026 |   |   | $ | 2,268 |   |
|                                                              |   |
| Net charge offs to average loans outstanding                      |   |   | 0.19 | % |   |   | 0.11 | % |   |   | 0.08 | % |   |   | 0.07 | % |   |   | 0.02 | % |
|                                                              |   |
| Provision charged to income as a percent of average loans         |   |   | 0.26 | % |   |   | 0.17 | % |   |   | 0.14 | % |   |   | 0.06 | % |   |   | 0.05 | % |
| Loan loss reserve to average loans outstanding                    |   |   | 0.96 | % |   |   | 0.93 | % |   |   | 0.90 | % |   |   | 1.15 | % |   |   | 0.86 | % |
| Loan loss reserve to non-accruing loans(2)                        |   |   | 84.23 | % |   |   | 89.78 | % |   |   | 152.57 | % |   |   | 226.16 | % |   |   | 314.56 | % |

| Allocation of Allowance for Loan Losses (1) |   |
|---------------------------------------------|--------|
|                                        |   |
| December 31,                                |   | 2010 |   |   | % |   |   | 2009 |   |   | % |   |   | 2008 |   |   | % |   |   | 2007 |   |   | % |   |   | 2006 |   |   | % |   |
|                                        |   | (Dollars in Thousands) |   |
| Domestic                                    |   |
|  Residential real estate               |   | $ | 1,831 |   |   |   | 55 | % |   | $ | 1,589 |   |   |   | 57 | % |   | $ | 1,404 |   |   |   | 58 | % |   | $ | 1,258 |   |   |   | 55 | % |   | $ | 1,055 |   |   |   | 58 | % |
|  Commercial (2)                        |   |   | 1,694 |   |   |   | 42 | % |   |   | 1,616 |   |   |   | 40 | % |   |   | 1,497 |   |   |   | 37 | % |   |   | 1,486 |   |   |   | 40 | % |   |   | 956 |   |   |   | 34 | % |
|  Consumer                              |   |   | 152 |   |   |   | 3 | % |   |   | 182 |   |   |   | 3 | % |   |   | 255 |   |   |   | 5 | % |   |   | 248 |   |   |   | 5 | % |   |   | 204 |   |   |   | 8 | % |
| Unallocated                                 |   |   | 51 |   |   |   | 0 | % |   |   | 64 |   |   |   | 0 | % |   |   | 77 |   |   |   | 0 | % |   |   | 34 |   |   |   | 0 | % |   |   | 53 |   |   |   | 0 | % |
|                                        |   |
|      Total         |   | $ | 3,728 |   |   |   | 100 | % |   | $ | 3,451 |   |   |   | 100 | % |   | $ | 3,233 |   |   |   | 100 | % |   | $ | 3,026 |   |   |   | 100 | % |   | $ | 2,268 |   |   |   | 100 | % |

| (1)  Does not include loan loss allowance information for the acquired LyndonBank for 2006 and 2007.   |
|------------------------------------------------------------------------------------------------------------------|
| (2)  Includes commercial loans secured by real estate, as well as unsecured commercial loans and those |
|       secured by other types of collateral.                                        |

| Non-Performing Assets (1)                                    |   |
|--------------------------------------------------------------|--------|
| December 31,                                                 |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                         |   | (Dollars in Thousands) |   |
| Accruing loans past due 90 days or more:                     |   |
|   Consumer                                         |   | $ | 38 |   |   | $ | 20 |   |   | $ | 2 |   |   | $ | 11 |   |   | $ | 32 |   |
|   Commercial                                       |   |   | 29 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 60 |   |
|   Commercial real estate                           |   |   | 95 |   |   |   | 0 |   |   |   | 0 |   |   |   | 70 |   |   |   | 0 |   |
|   Residential real estate                          |   |   | 1,195 |   |   |   | 538 |   |   |   | 245 |   |   |   | 57 |   |   |   | 113 |   |
|      Total past due 90 days or more |   |   | 1,357 |   |   |   | 558 |   |   |   | 247 |   |   |   | 138 |   |   |   | 205 |   |
|                                                         |   |
| Non-accrual loans:                                           |   |
|   Consumer                                         |   |   | 0 |   |   |   | 0 |   |   |   | 274 |   |   |   | 0 |   |   |   | 0 |   |
|   Commercial                                       |   |   | 61 |   |   |   | 201 |   |   |   | 470 |   |   |   | 45 |   |   |   | 43 |   |
|   Commercial real estate                           |   |   | 1,146 |   |   |   | 1,161 |   |   |   | 120 |   |   |   | 707 |   |   |   | 508 |   |
|   Residential real estate                          |   |   | 3,219 |   |   |   | 2,482 |   |   |   | 1,255 |   |   |   | 586 |   |   |   | 170 |   |
|      Total non-accrual loans        |   |   | 4,426 |   |   |   | 3,844 |   |   |   | 2,119 |   |   |   | 1,338 |   |   |   | 721 |   |
|                                                         |   |
| Total non-accrual, past due loans                            |   |   | 5,783 |   |   |   | 4,402 |   |   |   | 2,366 |   |   |   | 1,476 |   |   |   | 926 |   |
| Other real estate owned                                      |   |   | 1,210 |   |   |   | 743 |   |   |   | 185 |   |   |   | 0 |   |   |   | 0 |   |
|    Total non-performing assets                |   | $ | 6,993 |   |   | $ | 5,145 |   |   | $ | 2,551 |   |   | $ | 1,476 |   |   | $ | 926 |   |
|                                                         |   |
| Percent of gross loans                                       |   |   | 1.79 | % |   |   | 1.35 | % |   |   | 0.70 | % |   |   | 0.41 | % |   |   | 0.34 | % |
| Reserve coverage of non-performing loans                     |   |   | 53.31 | % |   |   | 67.07 | % |   |   | 126.73 | % |   |   | 205.01 | % |   |   | 244.92 | % |

----

|                                                        |   |                   |   |   | Gross      |   |   | Gross      |   |   |   |   |
|-------------------------------------------------------------|--------|------------------------|--------|--------|------------|--------|--------|------------|--------|--------|--------|--------|
|                                                        |   | Amortized              |   |   | Unrealized |   |   | Unrealized |   |   | Fair   |   |
|                                                        |   | Cost                   |   |   | Gains      |   |   | Losses     |   |   | Value  |   |
| December 31, 2010                                           |   | (Dollars in Thousands) |   |
|                                                        |   |
| Available-for-sale                                          |   |
|    U.S. GSE debt securities                  |   | $                      | 16,235 |   |       | $      | 88     |       |   | $      | 10     |   |   | $ | 16,313 |   |
|    U.S. Government securities                |   |                   | 5,037  |   |       |   | 38     |       |   |   | 0      |   |   |   | 5,075 |   |
|    U.S. GSE preferred stock                  |   |                   | 42     |   |       |   | 0      |       |   |   | 0      |   |   |   | 42 |   |
|                                                        |   | $                      | 21,314 |   |       | $      | 126    |       |   | $      | 10     |   |   | $ | 21,430 |   |
|                                                        |   |
| Held-to-maturity                                            |   |
|    States and political subdivisions         |   | $                      | 37,441 |   |       | $      | 716    |       |   | $      | 0      |   |   | $ | 38,157 |   |
|                                                        |   |
| Restricted equity securities (1)                            |   | $                      | 4,309  |   |       | $      | 0      |       |   | $      | 0      |   |   | $ | 4,309 |   |
|                                                        |   |
|          Total |   | $                      | 63,064 |   |       | $      | 842    |       |   | $      | 10     |   |   | $ | 63,896 |   |
|                                                        |   |
| December 31, 2009                                           |   |
|                                                        |   |
| Available-for-sale                                          |   |
|    U.S. GSE debt securities                  |   | $                      | 18,687 |   |       | $      | 138    |       |   | $      | 18     |   |   | $ | 18,807 |   |
|    U.S. Government securities                |   |                   | 5,049  |   |       |   | 49     |       |   |   | 1      |   |   |   | 5,097 |   |
|    U.S. GSE preferred stock                  |   |                   | 68     |   |       |   | 3      |       |   |   | 0      |   |   |   | 71 |   |
|                                                        |   | $                      | 23,804 |   |       | $      | 190    |       |   | $      | 19     |   |   | $ | 23,975 |   |
|                                                        |   |
| Held-to-maturity                                            |   |
|    States and political subdivisions         |   | $                      | 44,766 |   |       | $      | 777    |       |   | $      | 0      |   |   | $ | 45,543 |   |
|                                                        |   |
| Restricted equity securities (1)                            |   | $                      | 3,907  |   |       | $      | 0      |       |   | $      | 0      |   |   | $ | 3,907 |   |
|                                                        |   |
|          Total |   | $                      | 72,477 |   |       | $      | 967    |       |   | $      | 19     |   |   | $ | 73,425 |   |

----

| Maturities and Yields of Investment Portfolio     |   |
|---------------------------------------------------|--------|
|                                              |   |
| December 31,                                      |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                              |   |   |   |   | Weighted |   |   |   |   |   | Weighted |   |   |   |   |   | Weighted |   |
|                                              |   | Fair |   |   | Average |   |   | Fair |   |   | Average |   |   | Fair |   |   | Average |   |
|                                              |   | Value (1) |   |   | Yield (2) |   |   | Value (1) |   |   | Yield (2) |   |   | Value (1) |   |   | Yield (2) |   |
|                                              |   | (Dollars in Thousands) |   |
| Available-for-sale                                |   |
| U.S. GSE debt & Government securities         |   |
|    Due in one year or less         |   | $ | 14,248 |   |   |   | 1.34 | % |   | $ | 8,311 |   |   |   | 3.17 | % |   | $ | 6,149 |   |   |   | 4.44 | % |
|    Due from one to five years      |   |   | 7,140 |   |   |   | 1.01 | % |   |   | 15,593 |   |   |   | 1.40 | % |   |   | 6,498 |   |   |   | 4.40 | % |
|       Total         |   | $ | 21,388 |   |   |   | 1.23 | % |   | $ | 23,904 |   |   |   | 2.01 | % |   | $ | 12,647 |   |   |   | 4.42 | % |
|                                              |   |
| Tax-exempt municipals                             |   |
|    Due after ten years             |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 1,163 |   |   |   | 5.22 | % |
|                                              |   |
| Mortgage backed securities                        |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 13,883 |   |   |   | 4.70 | % |
|                                              |   |
| Collateralized mortgage obligations               |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 0 |   |   |   | 0.00 | % |   | $ | 1,718 |   |   |   | 3.80 | % |
|                                              |   |
| FRBB stock (3)                                    |   | $ | 588 |   |   |   | 6.00 | % |   | $ | 588 |   |   |   | 6.00 | % |   | $ | 588 |   |   |   | 6.00 | % |
|                                              |   |
| FHLBB stock (3)                                   |   | $ | 3,721 |   |   |   | 0.00 | % |   | $ | 3,319 |   |   |   | 0.00 | % |   | $ | 3,319 |   |   |   | 2.50 | % |
|                                              |   |
| Preferred stock                                   |   | $ | 42 |   |   |   | 0.00 | % |   | $ | 71 |   |   |   | 0.00 | % |   | $ | 39 |   |   |   | 0.00 | % |
|                                              |   |
| Held-to-maturity                                  |   |
|                                              |   |
| Obligations of state & political subdivisions |   |
|    Due in one year or less         |   | $ | 28,469 |   |   |   | 3.48 | % |   | $ | 35,864 |   |   |   | 3.31 | % |   | $ | 28,694 |   |   |   | 4.65 | % |
|    Due from one to five years      |   |   | 4,254 |   |   |   | 4.54 | % |   |   | 4,035 |   |   |   | 5.01 | % |   |   | 3,934 |   |   |   | 5.32 | % |
|    Due from five to ten years      |   |   | 790 |   |   |   | 5.52 | % |   |   | 1,483 |   |   |   | 5.59 | % |   |   | 1,414 |   |   |   | 5.86 | % |
|    Due after ten years             |   |   | 3,928 |   |   |   | 7.21 | % |   |   | 3,384 |   |   |   | 8.03 | % |   |   | 3,246 |   |   |   | 8.24 | % |
|       Total         |   | $ | 37,441 |   |   |   | 4.04 | % |   | $ | 44,766 |   |   |   | 3.89 | % |   | $ | 37,288 |   |   |   | 5.08 | % |

| (1)  Investments classified as available-for-sale are presented at fair value, and investments classified as held-to-maturity are presented at book value. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) The yield on obligations of state and political subdivisions is calculated on a tax equivalent basis assuming a 34 percent tax rate.                   |
| (3) Required equity purchases for membership in the Federal Reserve System and Federal Home Loan Bank System.                                                   |

|                                           |   | 2010                   |   |   | 2009   |   |
|------------------------------------------------|--------|------------------------|--------|--------|--------|--------|
|                                           |   | (Dollars in Thousands) |   |
|                                           |   |                   |   |   |   |   |
| Buildings and improvements                     |   | $                      | 10,515 |   |   | $      | 10,439 |   |
| Land and land improvements                     |   |                   | 2,379  |   |   |   | 2,572 |   |
| Furniture and equipment                        |   |                   | 6,199  |   |   |   | 6,242 |   |
| Leasehold improvements                         |   |                   | 1,293  |   |   |   | 1,277 |   |
| Capital lease                                  |   |                   | 928    |   |   |   | 928 |   |
| Other prepaid assets                           |   |                   | 90     |   |   |   | 14 |   |
|                                           |   |                   | 21,404 |   |   |   | 21,472 |   |
| Less accumulated depreciation and amortization |   |                   | (8,612 | )      |   |   | (7,835 | ) |
|                                           |   | $                      | 12,792 |   |   | $      | 13,637 |   |

|                                                          |   | Contract or            |   |
|---------------------------------------------------------------|--------|------------------------|--------|
|                                                          |   | -Notional Amount-      |   |
|                                                          |   | 2010                   |   |   | 2009 |   |
|                                                          |   | (Dollars in Thousands) |   |
|                                                          |   |                   |   |   |   |   |
| Unused portions of home equity lines of credit                |   | $                      | 18,937 |   |   | $ | 15,557 |   |
| Other commitments to extend credit                            |   |                   | 30,582 |   |   |   | 26,613 |   |
| Residential construction lines of credit                      |   |                   | 2,045  |   |   |   | 1,671 |   |
| Commercial real estate and other construction lines of credit |   |                   | 6,892  |   |   |   | 12,664 |   |
| Standby letters of credit and commercial letters of credit    |   |                   | 1,267  |   |   |   | 735 |   |
| Recourse on sale of credit card portfolio                     |   |                   | 372    |   |   |   | 391 |   |
| MPF credit enhancement obligation, net (See Note 16)          |   |                   | 1,807  |   |   |   | 1,486 |   |

|                                                            |   | 2010                   |   |   | 2009   |   |
|-----------------------------------------------------------------|--------|------------------------|--------|--------|--------|--------|
| Long-Term Borrowings                                            |   | (Dollars in Thousands) |   |
| FHLBB term borrowing, 2.13% fixed rate, due January 31, 2011    |   | $                      | 10,000 |   |   | $      | 10,000 |   |
| FHLBB Community Investment Program borrowing, 7.67% fixed rate, |   |                   |   |   |   |   |   |   |
|    due November 16, 2012                         |   |                   | 10     |   |   |   | 10 |   |
| FHLBB term borrowing, 1.00% fixed rate, due January 27, 2012    |   |                   | 6,000  |   |   |   | 0 |   |
| FHLBB term borrowing, 1.71% fixed rate, due January 27, 2013    |   |                   | 6,000  |   |   |   | 0 |   |
| FHLBB term borrowing, 2.72% fixed rate, due January 27, 2015    |   |                   | 6,000  |   |   |   | 0 |   |
|                                                            |   |                   | 28,010 |   |   |   | 10,010 |   |
| Short-Term Advances                                             |   |
| FHLBB term borrowing, 0.39% fixed rate, due January 19, 2011    |   |                   | 5,000  |   |   |   | 0 |   |
|                                                            |   |
| Overnight Borrowings                                            |   |
| Federal funds purchased (FHLBB), 0.200%, respectively           |   |                   | 0      |   |   |   | 3,401 |   |
|                                                            |   |
| Total borrowings                                                |   | $                      | 33,010 |   |   | $      | 13,411 |   |

| Balance at December 31, 2009 (book value $7.56 per common share)                               |   | $      | 36,889,838 |   |
|------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
|     Net income                                                             |   |   | 3,946,008  |   |
|     Issuance of stock through the Dividend Reinvestment Plan               |   |   | 712,799    |   |
|     Dividends declared on common stock                                     |   |   | (2,197,251 | )      |
|     Dividends declared on preferred stock                                  |   |   | (187,500   | )      |
|     Change in unrealized gain on available-for-sale securities, net of tax |   |   | (36,225    | )      |
|     Balance at December 31, 2010 (book value $7.92 per common share)       |   | $      | 39,127,669 |   |

|                                     |                   |        |               |              | Minimum |
|------------------------------------------|------------------------|-------------|--------------------|-------------------|---------|
|                                     |                   |        | Minimum            | To Be Well        |
|                                     |                   |        | For Capital        | Capitalized Under |
|                                     |                   |        | Adequacy           | Prompt Corrective |
|                                     | Actual                 | Purposes:   | Action Provisions: |
|                                     | Amount                 | Ratio  | Amount             | Ratio             | Amount  | Ratio |
|                                     | (Dollars in Thousands) |
| As of December 31, 2010:                 |                   |        |               |              |    |   |
| Total capital (to risk-weighted assets)  |                   |        |               |              |    |   |
|    Company                | $43,942                | 12.33%      | $28,505            | 8.00%             | N/A     | N/A |
|    Bank                   | $43,364                | 12.20%      | $28,439            | 8.00%             | $35,549 | 10.00% |
|                                     |                   |        |               |              |    |   |
| Tier I capital (to risk-weighted assets) |                   |        |               |              |    |   |
|    Company                | $40,187                | 11.28%      | $14,253            | 4.00%             | N/A     | N/A |
|    Bank                   | $39,610                | 11.14%      | $14,220            | 4.00%             | $21,329 | 6.00% |
|                                     |                   |        |               |              |    |   |
| Tier I capital (to average assets)       |                   |        |               |              |    |   |
|    Company                | $40,187                | 7.52%       | $21,376            | 4.00%             | N/A     | N/A |
|    Bank                   | $39,610                | 7.42%       | $21,345            | 4.00%             | $26,681 | 5.00% |

| As of December 31, 2009:                 |    |   |    |   |    |   |
|------------------------------------------|---------|--------|---------|--------|---------|--------|
| Total capital (to risk-weighted assets)  |    |   |    |   |    |   |
|    Company                | $40,326 | 11.57% | $27,877 | 8.00%  | N/A     | N/A    |
|    Bank                   | $40,336 | 11.60% | $27,811 | 8.00%  | $34,764 | 10.00% |
|                                     |    |   |    |   |    |   |
| Tier I capital (to risk-weighted assets) |    |   |    |   |    |   |
|    Company                | $36,875 | 10.58% | $13,939 | 4.00%  | N/A     | N/A    |
|    Bank                   | $36,885 | 10.61% | $13,906 | 4.00%  | $20,858 | 6.00%  |
|                                     |    |   |    |   |    |   |
| Tier I capital (to average assets)       |    |   |    |   |    |   |
|    Company                | $36,875 | 7.50%  | $19,674 | 4.00%  | N/A     | N/A    |
|    Bank                   | $36,885 | 7.51%  | $19,643 | 4.00%  | $24,554 | 5.00%  |