| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
|---|------------------------------------------------------------------------------------------|

|  ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
|--------|-------------------------------------------------------------------------------------------|

| NorthWest Indiana Bancorp                              |
|--------------------------------------------------------|
| (Exact name of registrant as specified in its charter) |

| Indiana                                       |         | 35-1927981             |   |
|-----------------------------------------------|--------------|------------------------|--------|
| (State or other jurisdiction of incorporation |         | (I.R.S. Employer       |   |
| or organization)                              |    | Identification Number) |   |

| 9204 Columbia Avenue                     |         |       |   |
|------------------------------------------|--------------|------------|--------|
| Munster, Indiana                         |         | 46321      |   |
| (Address of principal executive offices) |    | (ZIP code) |   |

----

|                                                                              |         |                                                                                                   |   | Page   |
|-----------------------------------------------------------------------------------|--------------|--------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                              |         |                                                                                                   |   | Number |
| PART I. Financial Information                                      |         |                                                                                                   |   |
|                                                                              |         |                                                                                                   |   |   |   |
| Item 1.                                                                           |         | Unaudited Financial Statements                                                                         |   |   |   |
|                                                                              |         |                                                                                                   |   |   |   |
|                                                                              |         | Consolidated Balance Sheets, March 31, 2011 and December 31, 2010                                      |   | 1      |   |
|                                                                              |         |                                                                                                   |   |   |   |
|                                                                              |         | Consolidated Statements of Income, Three Months Ended March 31, 2011 and 2010                          |   | 2      |   |
|                                                                              |         |                                                                                                   |   |   |   |
|                                                                              |         | Consolidated Statements of Changes in Stockholders' Equity, Three Months Ended March 31, 2011 and 2010 |   | 3      |   |
|                                                                              |         |                                                                                                   |   |   |   |
|                                                                              |         | Consolidated Statements of Cash Flows, Three Months Ended March 31, 2011 and 2010                      |   | 4      |   |
|                                                                              |         |                                                                                                   |   |   |   |
|                                                                              |         | Notes to Consolidated Financial Statements                                                             |   | 5-17   |   |
|                                                                              |         |                                                                                                   |   |   |   |
| Item 2.                                                                           |         | Management’s Discussion and Analysis of Financial Condition and Results of Operations            |   | 18-26  |   |
|                                                                              |         |                                                                                                   |   |   |   |
| Item 3.                                                                           |         | Quantitative and Qualitative Disclosures about Market Risk                                             |   | 27     |   |
|                                                                              |         |                                                                                                   |   |   |   |
| Item 4.                                                                           |         | Controls and Procedures                                                                                |   | 27     |   |
|                                                                              |         |                                                                                                   |   |   |   |
| PART II. Other Information                                                        |         | 28                                                                                                     |   |
|                                                                              |         |                                                                                                   |   |   |   |
| SIGNATURES                                                                        |    | 29                                                                                                     |   |
|                                                                              |         |                                                                                                   |   |   |   |
| EXHIBITS                                                                          |         |                                                                                                   |   |   |   |
| 31.1  Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |         |                                                                                                   |   |
| 31.2  Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |         |                                                                                                   |   |
| 32.1  Section 1350 Certifications                                       |         |                                                                                                   |   |

----

|                                                                                    |   | March 31, |    |   | December 31, |   |
|-----------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                    |   | 2011           |    |   | 2010              |   |
| (Dollars in thousands)                                                                  |   | (unaudited)    |    |   |              |   |
|                                                                                    |   |           |    |   |              |   |
| ASSETS                                                                                  |   |           |    |   |              |   |
|                                                                                    |   |           |    |   |              |   |
| Cash and non-interest bearing balances in financial institutions                        |   | $              | 7,433   |   |              | $      | 7,427 |   |
| Interest bearing balances in financial institutions                                     |   |           | 10,445  |   |              |   | 90 |   |
| Federal funds sold                                                                      |   |           | 702     |   |              |   | 3,421 |   |
| Total cash and cash equivalents                                                         |   |           | 18,580  |   |              |   | 10,938 |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| Securities available-for-sale                                                           |   |           | 153,400 |   |              |   | 142,055 |   |
| Securities held-to-maturity                                                             |   |           | 17,772  |   |              |   | 18,397 |   |
| Loans held-for-sale                                                                     |   |           | -       |   |              |   | 422 |   |
| Loans receivable                                                                        |   |           | 411,350 |   |              |   | 418,233 |   |
| Less: allowance for loan losses                                                         |   |           | (9,692  | )      |              |   | (9,121 | ) |
| Net loans receivable                                                                    |   |           | 401,658 |   |              |   | 409,112 |   |
| Federal Home Loan Bank stock                                                            |   |           | 3,381   |   |              |   | 3,381 |   |
| Accrued interest receivable                                                             |   |           | 2,498   |   |              |   | 2,591 |   |
| Premises and equipment                                                                  |   |           | 18,945  |   |              |   | 19,293 |   |
| Foreclosed real estate                                                                  |   |           | 2,788   |   |              |   | 3,298 |   |
| Cash value of bank owned life insurance                                                 |   |           | 12,552  |   |              |   | 12,452 |   |
| Prepaid FDIC insurance premium                                                          |   |           | 2,066   |   |              |   | 2,425 |   |
| Other assets                                                                            |   |           | 6,236   |   |              |   | 6,689 |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| Total assets                                                                            |   | $              | 639,876 |   |              | $      | 631,053 |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                    |   |           |    |   |              |   |   |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| Deposits:                                                                               |   |           |    |   |              |   |   |   |
| Non-interest bearing                                                                    |   | $              | 56,471  |   |              | $      | 50,712 |   |
| Interest bearing                                                                        |   |           | 468,717 |   |              |   | 469,559 |   |
| Total                                                                                   |   |           | 525,188 |   |              |   | 520,271 |   |
| Repurchase agreements                                                                   |   |           | 24,049  |   |              |   | 16,074 |   |
| Borrowed funds                                                                          |   |           | 26,387  |   |              |   | 32,544 |   |
| Accrued expenses and other liabilities                                                  |   |           | 6,961   |   |              |   | 6,075 |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| Total liabilities                                                                       |   |           | 582,585 |   |              |   | 574,964 |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| Stockholders' Equity:                                                                   |   |           |    |   |              |   |   |   |
| Preferred stock, no par or stated value; 10,000,000 shares authorized, none outstanding |   |           | -       |   |              |   | - |   |
| Common stock, no par or stated value; 10,000,000 shares authorized;                     |   |           |    |   |              |   |   |   |
| shares issued:  March 31, 2011 - 2,888,902                                    |   |           | 361     |   |              |   | 361 |   |
| December 31, 2010 - 2,888,902                                                           |   |           |    |   |              |   |   |   |
| shares outstanding:  March 31, 2011 - 2,828,977                               |   |           |    |   |              |   |   |   |
| December 31, 2010 - 2,826,796                                                           |   |           |    |   |              |   |   |   |
| Additional paid in capital                                                              |   |           | 5,149   |   |              |   | 5,140 |   |
| Accumulated other comprehensive income/(loss)                                           |   |           | (77     | )      |              |   | (492 | ) |
| Retained earnings                                                                       |   |           | 53,131  |   |              |   | 52,398 |   |
| Treasury stock, common shares at cost:  March 31, 2011 - 59,925               |   |           |    |   |              |   |   |   |
| December 31, 2010 - 62,106                                                              |   |           | (1,273  | )      |              |   | (1,318 | ) |
|                                                                                    |   |           |    |   |              |   |   |   |
| Total stockholders' equity                                                              |   |           | 57,291  |   |              |   | 56,089 |   |
|                                                                                    |   |           |    |   |              |   |   |   |
| Total liabilities and stockholders' equity                                              |   | $              | 639,876 |   |              | $      | 631,053 |   |

----

|                                                                        |   | Three Months Ended |   |
|-----------------------------------------------------------------------------|--------|------------------------------|--------|
| (Dollars in thousands, except per share data) |   | March 31,               |   |
|                                                                        |   | 2011                         |   |   | 2010 |   |
| Interest income:                                                            |   |                         |   |   |   |   |
| Loans receivable                                                            |   |                         |   |   |   |   |
| Real estate loans                                                           |   | $                            | 4,386  |   |   | $ | 5,156 |   |
| Commercial loans                                                            |   |                         | 960    |   |   |   | 1,032 |   |
| Consumer loans.                                                             |   |                         | 13     |   |   |   | 24 |   |
| Total loan interest                                                         |   |                         | 5,359  |   |   |   | 6,212 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Securities                                                                  |   |                         | 1,520  |   |   |   | 1,530 |   |
| Other interest earning assets                                               |   |                         | 7      |   |   |   | 7 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Total interest income                                                       |   |                         | 6,886  |   |   |   | 7,749 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Interest expense:                                                           |   |                         |   |   |   |   |   |   |
| Deposits                                                                    |   |                         | 712    |   |   |   | 1,201 |   |
| Repurchase agreements                                                       |   |                         | 28     |   |   |   | 52 |   |
| Borrowed funds                                                              |   |                         | 173    |   |   |   | 269 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Total interest expense                                                      |   |                         | 913    |   |   |   | 1,522 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Net interest income                                                         |   |                         | 5,973  |   |   |   | 6,227 |   |
| Provision for loan losses                                                   |   |                         | 1,110  |   |   |   | 1,235 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Net interest income after provision for loan losses                         |   |                         | 4,863  |   |   |   | 4,992 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Noninterest income:                                                         |   |                         |   |   |   |   |   |   |
| Fees and service charges.                                                   |   |                         | 585    |   |   |   | 609 |   |
| Wealth management operations                                                |   |                         | 274    |   |   |   | 281 |   |
| Gain on sale of securities, net                                             |   |                         | 263    |   |   |   | 289 |   |
| Increase in cash value of bank owned life insurance                         |   |                         | 101    |   |   |   | 100 |   |
| Gain on sale of loans held-for-sale, net                                    |   |                         | 81     |   |   |   | 109 |   |
| Gain on foreclosed real estate, net                                         |   |                         | 59     |   |   |   | 22 |   |
| Other-than-temporary impairment of securities                               |   |                         | -      |   |   |   | (19 | ) |
| Portion of loss recognized in other comprehensive income                    |   |                         | -      |   |   |   | (94 | ) |
| Other                                                                       |   |                         | 20     |   |   |   | 4 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Total noninterest income                                                    |   |                         | 1,383  |   |   |   | 1,301 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Noninterest expense:                                                        |   |                         |   |   |   |   |   |   |
| Compensation and benefits                                                   |   |                         | 2,365  |   |   |   | 2,409 |   |
| Occupancy and equipment                                                     |   |                         | 848    |   |   |   | 785 |   |
| Federal deposit insurance premiums                                          |   |                         | 373    |   |   |   | 231 |   |
| Data processing                                                             |   |                         | 252    |   |   |   | 233 |   |
| Marketing                                                                   |   |                         | 141    |   |   |   | 125 |   |
| Other                                                                       |   |                         | 922    |   |   |   | 892 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Total noninterest expense                                                   |   |                         | 4,901  |   |   |   | 4,675 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Income before income tax expenses                                           |   |                         | 1,345  |   |   |   | 1,618 |   |
| Income tax expenses                                                         |   |                         | 173    |   |   |   | 229 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Net income                                                                  |   | $                            | 1,172  |   |   | $ | 1,389 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Earnings per common share:                                                  |   |                         |   |   |   |   |   |   |
| Basic                                                                       |   | $                            | 0.41   |   |   | $ | 0.49 |   |
| Diluted                                                                     |   | $                            | 0.41   |   |   | $ | 0.49 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| Dividends declared per common share                                         |   | $                            | 0.15   |   |   | $ | 0.21 |   |

----

|                                                                                             |   | Three Months Ended |   |
|--------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
| (Dollars in thousands)                                                                 |   | March 31,               |   |
|                                                                                             |   | 2011                         |   |   | 2010 |   |
|                                                                                             |   |                         |   |   |   |   |
| Balance at beginning of period                                                                   |   | $                            | 56,089 |   |   | $ | 53,078 |   |
|                                                                                             |   |                         |   |   |   |   |   |   |
| Comprehensive income:                                                                            |   |                         |   |   |   |   |   |   |
| Net income                                                                                       |   |                         | 1,172  |   |   |   | 1,389 |   |
| Net unrealized change on securities available-for-sale, net of reclassifications and tax effects |   |                         | 416    |   |   |   | 396 |   |
| Amortization of unrecognized gain                                                                |   |                         | (2     | ) |   |   | (2 | ) |
| Comprehensive income                                                                             |   |                         | 1,586  |   |   |   | 1,783 |   |
|                                                                                             |   |                         |   |   |   |   |   |   |
| Stock based compensation expense                                                                 |   |                         | 9      |   |   |   | 10 |   |
|                                                                                             |   |                         |   |   |   |   |   |   |
| Sale of treasury stock                                                                           |   |                         | 31     |   |   |   | 40 |   |
|                                                                                             |   |                         |   |   |   |   |   |   |
| Cash dividends                                                                                   |   |                         | (424   | ) |   |   | (592 | ) |
|                                                                                             |   |                         |   |   |   |   |   |   |
| Balance at end of period                                                                         |   | $                            | 57,291 |   |   | $ | 54,319 |   |

----

|                                                                    |   | Three Months Ended |    |
|-------------------------------------------------------------------------|--------|------------------------------|---------|
| (Dollars in thousands)                                        |   | March 31,               |    |
|                                                                    |   | 2011                         |    |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                   |   |                         |    |   |   |   |
| Net income                                                              |   | $                            | 1,172   |   |   | $ | 1,389 |   |
| Adjustments to reconcile net income to                                  |   |                         |    |   |   |   |   |   |
| net cash provided by operating activities:                              |   |                         |    |   |   |   |   |   |
| Origination of loans for sale                                           |   |                         | (2,788  | ) |   |   | (3,680 | ) |
| Sale of loans originated for sale                                       |   |                         | 3,261   |   |   |   | 4,477 |   |
| Depreciation and amortization, net of accretion                         |   |                         | 548     |   |   |   | 467 |   |
| Amortization of mortgage servicing rights                               |   |                         | 45      |   |   |   | 30 |   |
| Stock based compensation expense                                        |   |                         | 9       |   |   |   | 10 |   |
| Gain on sale of securities, net                                         |   |                         | (263    | ) |   |   | (289 | ) |
| Gain on sale of loans held-for-sale, net                                |   |                         | (81     | ) |   |   | (109 | ) |
| Net losses due to other-than-temporary impairment of securities         |   |                         | -       |   |   |   | 113 |   |
| Gain/(loss) on foreclosed real estate, net                              |   |                         | (59     | ) |   |   | (22 | ) |
| Provision for loan losses                                               |   |                         | 1,110   |   |   |   | 1,235 |   |
| Net change in:                                                          |   |                         |    |   |   |   |   |   |
| Interest receivable                                                     |   |                         | 93      |   |   |   | (31 | ) |
| Other assets                                                            |   |                         | 539     |   |   |   | 1,304 |   |
| Cash value of bank owned life insurance                                 |   |                         | (101    | ) |   |   | (100 | ) |
| Accrued expenses and other liabilities                                  |   |                         | 924     |   |   |   | 3,560 |   |
| Total adjustments                                                       |   |                         | 3,237   |   |   |   | 6,965 |   |
| Net cash - operating activities                                         |   |                         | 4,409   |   |   |   | 8,354 |   |
|                                                                    |   |                         |    |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                   |   |                         |    |   |   |   |   |   |
| Proceeds from maturities and pay downs of securities available-for-sale |   |                         | 8,875   |   |   |   | 6,034 |   |
| Proceeds from sales of securities available-for-sale                    |   |                         | 6,384   |   |   |   | 5,683 |   |
| Purchases of securities available-for-sale                              |   |                         | (25,858 | ) |   |   | (25,815 | ) |
| Proceeds from maturities and pay downs of securities held-to-maturity   |   |                         | 619     |   |   |   | 926 |   |
| Net change in loans receivable                                          |   |                         | 6,281   |   |   |   | (2,858 | ) |
| Purchase of premises and equipment, net                                 |   |                         | (42     | ) |   |   | (97 | ) |
| Proceeds from sales of foreclosed real estate                           |   |                         | 633     |   |   |   | 337 |   |
| Net cash - investing activities                                         |   |                         | (3,108  | ) |   |   | (15,790 | ) |
|                                                                    |   |                         |    |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                   |   |                         |    |   |   |   |   |   |
| Change in deposits                                                      |   |                         | 4,917   |   |   |   | 27,007 |   |
| Proceeds from  FHLB advances                                  |   |                         | -       |   |   |   | 4,000 |   |
| Repayment of FHLB advances                                              |   |                         | (3,000  | ) |   |   | (8,000 | ) |
| Change in other borrowed funds                                          |   |                         | 4,817   |   |   |   | (3,893 | ) |
| Proceeds from sale of treasury stock                                    |   |                         | 31      |   |   |   | 40 |   |
| Dividends paid                                                          |   |                         | (424    | ) |   |   | (592 | ) |
| Net cash - financing activities                                         |   |                         | 6,341   |   |   |   | 18,562 |   |
| Net change in cash and cash equivalents                                 |   |                         | 7,642   |   |   |   | 11,126 |   |
| Cash and cash equivalents at beginning of period                        |   |                         | 10,938  |   |   |   | 13,222 |   |
| Cash and cash equivalents at end of period                              |   | $                            | 18,580  |   |   | $ | 24,348 |   |
|                                                                    |   |                         |    |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION:                                     |   |                         |    |   |   |   |   |   |
| Cash paid during the period for:                                        |   |                         |    |   |   |   |   |   |
| Interest                                                                |   | $                            | 982     |   |   | $ | 1,546 |   |
| Income taxes                                                            |   | $                            | 5       |   |   | $ | 50 |   |
| SUPPLEMENTAL NONCASH INFORMATION:                                       |   |                         |    |   |   |   |   |   |
| Transfers from loans to foreclosed real estate                          |   | $                            | 120     |   |   | $ | 237 |   |

----

|                                                                           |   | (Dollars in thousands) |    |
|--------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                           |   |                   |    |   | Gross |   |   | Gross |   |   | Estimated |   |
|                                                                           |   | Cost                   |    |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                                           |   | Basis                  |    |   | Gains |   |   | Losses |   |   | Value |   |
| March 31, 2011                                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |
| U.S. government sponsored entities                                             |   | $                      | 8,351   |   |   | $ | 1 |   |   | $ | (14 | ) |   | $ | 8,338 |   |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |                   | 102,043 |   |   |   | 2,292 |   |   |   | (205 | ) |   |   | 104,130 |   |
| Municipal securities                                                           |   |                   | 37,968  |   |   |   | 1,458 |   |   |   | (60 | ) |   |   | 39,366 |   |
| Collateralized debt obligations                                                |   |                   | 5,215   |   |   |   | - |   |   |   | (3,649 | ) |   |   | 1,566 |   |
| Total securities available-for-sale                                            |   | $                      | 153,577 |   |   | $ | 3,751 |   |   | $ | (3,928 | ) |   | $ | 153,400 |   |
|                                                                           |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                                              |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government sponsored entities                                             |   | $                      | 4,172   |   |   | $ | - |   |   | $ | (3 | ) |   | $ | 4,169 |   |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |                   | 94,930  |   |   |   | 2,372 |   |   |   | (160 | ) |   |   | 97,142 |   |
| Municipal securities                                                           |   |                   | 38,549  |   |   |   | 1,027 |   |   |   | (211 | ) |   |   | 39,365 |   |
| Collateralized debt obligations                                                |   |                   | 5,215   |   |   |   | - |   |   |   | (3,836 | ) |   |   | 1,379 |   |
| Total securities available-for-sale                                            |   | $                      | 142,866 |   |   | $ | 3,399 |   |   | $ | (4,210 | ) |   | $ | 142,055 |   |

----

|                                   |   | (Dollars in thousands) |   |
|----------------------------------------|--------|------------------------|--------|
|                                   |   |                   |   |   | Gross |   |   | Gross |   |   | Estimated |   |
|                                   |   | Cost                   |   |   | Unrecognized |   |   | Unrecognized |   |   | Fair |   |
|                                   |   | Basis                  |   |   | Gains |   |   | Losses |   |   | Value |   |
| March 31, 2011                         |   |                   |   |   |   |   |   |   |   |   |   |   |
| Municipal securities                   |   | $                      | 16,956 |   |   | $ | 723 |   |   | $ | - |   |   | $ | 17,679 |   |
| Residential mortgage-backed securities |   |                   | 816    |   |   |   | 22 |   |   |   | (3 | ) |   |   | 835 |   |
| Total securities held-to-maturity      |   | $                      | 17,772 |   |   | $ | 745 |   |   | $ | (3 | ) |   | $ | 18,514 |   |
|                                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipal securities                   |   | $                      | 17,573 |   |   | $ | 613 |   |   | $ | - |   |   | $ | 18,186 |   |
| Residential mortgage-backed securities |   |                   | 824    |   |   |   | 29 |   |   |   | (1 | ) |   |   | 852 |   |
| Total securities held-to-maturity      |   | $                      | 18,397 |   |   | $ | 642 |   |   | $ | (1 | ) |   | $ | 19,038 |   |

|                                                                           |   | (Dollars in thousands) |    |
|--------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                           |   | Available-for-sale     |    |   | Held-to-maturity |   |
|                                                                           |   | Estimated              |    |   |   |   |   |   |   |   | Estimated |   |   |   |   |
|                                                                           |   | Fair                   |    |   | Tax-Equivalent |   |   | Carrying |   |   | Fair |   |   | Tax-Equivalent |   |
|                                                                           |   | Value                  |    |   | Yield (%) |   |   | Amount |   |   | Value |   |   | Yield (%) |   |
| Due in one year or less                                                        |   | $                      | 195     |   |   |   | 7.07 |   |   | $ | - |   |   | $ | - |   |   |   | - |   |
| Due from one to five years                                                     |   |                   | 9,042   |   |   |   | 2.77 |   |   |   | 1,876 |   |   |   | 1,994 |   |   |   | 6.34 |   |
| Due from five years to ten years                                               |   |                   | 10,849  |   |   |   | 5.63 |   |   |   | 11,369 |   |   |   | 11,869 |   |   |   | 6.03 |   |
| Due over ten years                                                             |   |                   | 29,184  |   |   |   | 5.84 |   |   |   | 3,711 |   |   |   | 3,816 |   |   |   | 6.08 |   |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |                   | 104,130 |   |   |   | 3.88 |   |   |   | 816 |   |   |   | 835 |   |   |   | 4.61 |   |
| Total                                                                          |   | $                      | 153,400 |   |   |   | 4.31 |   |   | $ | 17,772 |   |   | $ | 18,514 |   |   |   | 6.01 |   |

|         |   | (Dollars in thousands) |   |
|--------------|--------|----------------------------------|--------|
|         |   | March 31,                   |   |   | March 31, |   |
|         |   | 2011                             |   |   | 2010 |   |
|         |   |                             |   |   |   |   |
| Proceeds     |   | $                                | 6,384  |   |   | $ | 5,683 |   |
| Gross gains  |   |                             | 263    |   |   |   | 289 |   |
| Gross losses |   |                             | -      |   |   |   | - |   |

|                                 |   | (Dollars in thousands) |   |
|--------------------------------------|--------|----------------------------------|--------|
|                                 |   | Unrealized gains            |   |
| Beginning balance, December 31, 2010 |   | $                                | (561   | ) |
| Current period change                |   |                             | 416    |   |
| Ending balance, March 31, 2011       |   | $                                | (145   | ) |

----

|                                                                      |   |                               |   |   |                               |   |   | (Dollars in thousands) |   |   |       |   |   |      |   |
|--------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------|--------|--------|------------|--------|--------|-----------|--------|
|                                                                           |   | Less than 12 months |   |   | 12 months or longer |   |   | Total                            |   |
|                                                                           |   | Estimated                          |   |   |                               |   |   | Estimated                        |   |   |       |   |   | Estimated |   |   |   |   |
|                                                                           |   | Fair                               |   |   | Unrealized                         |   |   | Fair                             |   |   | Unrealized |   |   | Fair      |   |   | Unrealized |   |
|                                                                           |   | Value                              |   |   | Losses                             |   |   | Value                            |   |   | Losses     |   |   | Value     |   |   | Losses |   |
| March 31, 2011                                                                 |   |                               |   |   |                               |   |   |                             |   |   |       |   |   |      |   |   |   |   |
| U.S. government sponsored entities                                             |   | $                                  | 4,835  |   |                               | $      | (14    | )                                |   | $      | -          |   |   | $         | -      |   |   | $ | 4,835 |   |   | $ | (14 | ) |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |                               | 19,980 |   |                               |   | (208   | )                                |   |   | -          |   |   |      | -      |   |   |   | 19,980 |   |   |   | (208 | ) |
| Municipal securities                                                           |   |                               | 5,238  |   |                               |   | (57    | )                                |   |   | 410        |   |   |      | (3     | ) |   |   | 5,648 |   |   |   | (60 | ) |
| Collateralized debt obligations                                                |   |                               | -      |   |                               |   | -      |                             |   |   | 1,566      |   |   |      | (3,649 | ) |   |   | 1,566 |   |   |   | (3,649 | ) |
| Total temporarily impaired                                                     |   | $                                  | 30,053 |   |                               | $      | (279   | )                                |   | $      | 1,976      |   |   | $         | (3,652 | ) |   | $ | 32,029 |   |   | $ | (3,931 | ) |
| Number of securities                                                           |   |                               |   |   |                               |   | 29     |                             |   |   |       |   |   |      | 5      |   |   |   |   |   |   |   | 34 |   |

|                                                                      |   |                               |   |   |                               |   |   | (Dollars in thousands) |   |   |       |   |   |      |   |
|--------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------|--------|--------|------------|--------|--------|-----------|--------|
|                                                                           |   | Less than 12 months |   |   | 12 months or longer |   |   | Total                            |   |
|                                                                           |   | Estimated                          |   |   |                               |   |   | Estimated                        |   |   |       |   |   | Estimated |   |   |   |   |
|                                                                           |   | Fair                               |   |   | Unrealized                         |   |   | Fair                             |   |   | Unrealized |   |   | Fair      |   |   | Unrealized |   |
|                                                                           |   | Value                              |   |   | Losses                             |   |   | Value                            |   |   | Losses     |   |   | Value     |   |   | Losses |   |
| December 31, 2010                                                              |   |                               |   |   |                               |   |   |                             |   |   |       |   |   |      |   |   |   |   |
| U.S. government sponsored entities                                             |   | $                                  | 2,513  |   |                               | $      | (3     | )                                |   | $      | -          |   |   | $         | -      |   |   | $ | 2,513 |   |   | $ | (3 | ) |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |                               | 13,767 |   |                               |   | (161   | )                                |   |   | -          |   |   |      | -      |   |   |   | 13,767 |   |   |   | (161 | ) |
| Municipal securities                                                           |   |                               | 7,496  |   |                               |   | (194   | )                                |   |   | 398        |   |   |      | (17    | ) |   |   | 7,894 |   |   |   | (211 | ) |
| Collateralized debt obligations                                                |   |                               | -      |   |                               |   | -      |                             |   |   | 1,379      |   |   |      | (3,836 | ) |   |   | 1,379 |   |   |   | (3,836 | ) |
| Total temporarily impaired                                                     |   | $                                  | 23,776 |   |                               | $      | (358   | )                                |   | $      | 1,777      |   |   | $         | (3,853 | ) |   | $ | 25,553 |   |   | $ | (4,211 | ) |
| Number of securities                                                           |   |                               |   |   |                               |   | 27     |                             |   |   |       |   |   |      | 5      |   |   |   |   |   |   |   | 32 |   |

|                                      |   | (Dollars in thousands) |    |
|-------------------------------------------|--------|----------------------------------|---------|
|                                      |   | March 31, 2011         |    |   | December 31, 2010 |   |
| Loans secured by real estate:             |   |                             |    |   |   |   |
| Construction and land development         |   | $                                | 34,763  |   |   | $ | 46,371 |   |
| Residential, including home equity        |   |                             | 149,330 |   |   |   | 153,150 |   |
| Commercial real estate and other dwelling |   |                             | 154,753 |   |   |   | 146,111 |   |
| Total loans secured by real estate        |   |                             | 338,846 |   |   |   | 345,632 |   |
| Consumer loans                            |   |                             | 623     |   |   |   | 765 |   |
| Commercial business                       |   |                             | 63,171  |   |   |   | 61,837 |   |
| Government and other                      |   |                             | 9,062   |   |   |   | 10,380 |   |
| Subtotal                                  |   |                             | 411,702 |   |   |   | 418,614 |   |
| Less:                                     |   |                             |    |   |   |   |   |   |
| Net deferred loan origination fees        |   |                             | (251    | ) |   |   | (273 | ) |
| Undisbursed loan funds                    |   |                             | (101    | ) |   |   | (108 | ) |
| Loans receivable                          |   | $                                | 411,350 |   |   | $ | 418,233 |   |

----

|                                  |   |                   |   |   |     |   |   | Commercial              |   |   |           |   |   |                |   |   |       |   |   |   |   |
|--------------------------------------------|--------|------------------------|--------|--------|----------|--------|--------|-------------------------|--------|--------|----------------|--------|--------|---------------------|--------|--------|------------|--------|--------|--------|--------|
|                                       |   |                   |   |   |     |   |   | Real Estate,       |   |   |           |   |   |                |   |   |       |   |   |   |   |
|                                       |   |                   |   |   |     |   |   | Construction & |   |   |           |   |   |                |   |   |       |   |   |   |   |
|                                       |   |                   |   |   |     |   |   | Land                    |   |   |           |   |   |                |   |   |       |   |   |   |   |
|                                       |   | Residential Real  |   |   |     |   |   | Development,            |   |   | Commercial     |   |   |                |   |   |       |   |   |   |   |
|                                       |   | Estate, Including |   |   | Consumer |   |   | and Other          |   |   | Participations |   |   | Commercial          |   |   |       |   |   |   |   |
| (Dollars in thousands)           |   | Home Equity       |   |   | Loans    |   |   | Dwellings               |   |   | Purchased      |   |   | Business Loans |   |   | Government |   |   | Total  |   |
| For the three months ending March 31, 2011 |   |                   |   |   |     |   |   |                    |   |   |           |   |   |                |   |   |       |   |   |   |   |
| Allowance for loan losses:                 |   |                   |   |   |     |   |   |                    |   |   |           |   |   |                |   |   |       |   |   |   |   |
| Beginning Balance                          |   | $                      | 994    |   |     | $      | 30     |                    |   | $      | 2,773          |   |   | $                   | 4,704  |   |       | $      | 620    |   |   | $ | - |   |   |   | 9,121 |   |
| Charge-offs                                |   |                   | (138   | )      |     |   | (2     | )                       |   |   | (393           | )      |   |                | (40    | )      |       |   | -      |   |   |   | - |   |   |   | (573 | ) |
| Recoveries                                 |   |                   | -      |   |     |   | 9      |                    |   |   | -              |   |   |                | -      |   |       |   | 25     |   |   |   | - |   |   |   | 34 |   |
| Provisions                                 |   |                   | 183    |   |     |   | (17    | )                       |   |   | 617            |   |   |                | 404    |   |       |   | (77    | )      |   |   | - |   |   |   | 1,110 |   |
| Ending Balance                             |   | $                      | 1,039  |   |     | $      | 20     |                    |   | $      | 2,997          |   |   | $                   | 5,068  |   |       | $      | 568    |   |   | $ | - |   |   | $ | 9,692 |   |

| Ending balance: individually     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |
|----------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| evaluated for impairment         |   | $      | 1       |   |   | $      | -      |   |   | $      | 1,074   |   |   | $      | 2,886  |   |   | $      | 18     |   |   | $ | - |   |   | $ | 3,979 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment         |   | $      | 1,038   |   |   | $      | 20     |   |   | $      | 1,923   |   |   | $      | 2,182  |   |   | $      | 550    |   |   | $ | - |   |   | $ | 5,713 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: loans acquired   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with deteriorated credit quality |   | $      | -       |   |   | $      | -      |   |   | $      | -       |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |   | $ | - |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING RECEIVABLES            |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                   |   | $      | 149,071 |   |   | $      | 621    |   |   | $      | 161,268 |   |   | $      | 28,248 |   |   | $      | 63,080 |   |   | $ | 9,062 |   |   | $ | 411,350 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: individually     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment         |   | $      | 119     |   |   | $      | -      |   |   | $      | 10,339  |   |   | $      | 14,619 |   |   | $      | 118    |   |   | $ | - |   |   | $ | 25,195 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment         |   | $      | 148,952 |   |   | $      | 621    |   |   | $      | 150,929 |   |   | $      | 13,629 |   |   | $      | 62,962 |   |   | $ | 9,062 |   |   | $ | 386,155 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: loans acquired   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with deteriorated credit quality |   | $      | -       |   |   | $      | -      |   |   | $      | -       |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |   | $ | - |   |

| Ending balance: individually     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |
|----------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| evaluated for impairment         |   | $      | 1       |   |   | $      | -      |   |   | $      | 875     |   |   | $      | 1,897  |   |   | $      | 21     |   |   | $ | - |   |   | $ | 2,794 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment         |   | $      | 993     |   |   | $      | 30     |   |   | $      | 1,898   |   |   | $      | 2,807  |   |   | $      | 599    |   |   | $ | - |   |   | $ | 6,327 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: loans acquired   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with deteriorated credit quality |   | $      | -       |   |   | $      | -      |   |   | $      | -       |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |   | $ | - |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING RECEIVABLES            |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                   |   | $      | 152,881 |   |   | $      | 874    |   |   | $      | 163,616 |   |   | $      | 28,866 |   |   | $      | 61,726 |   |   | $ | 10,270 |   |   | $ | 418,233 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: individually     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment         |   | $      | 64      |   |   | $      | -      |   |   | $      | 10,974  |   |   | $      | 14,493 |   |   | $      | 482    |   |   | $ | - |   |   | $ | 26,013 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively     |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment         |   | $      | 152,817 |   |   | $      | 874    |   |   | $      | 152,642 |   |   | $      | 14,373 |   |   | $      | 61,244 |   |   | $ | 10,270 |   |   | $ | 392,220 |   |
|                             |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: loans acquired   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with deteriorated credit quality |   | $      | -       |   |   | $      | -      |   |   | $      | -       |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |   | $ | - |   |

|             |                    |   (Dollars in thousands)                                                                                     |   |
|------------------|-------------------------|-----------------------------------------------------------------------------------------------------------------------------|--------|
|             |                    | Corporate Credit Exposure - Credit Risk Portfolio By Creditworthiness Category |   |
|             |                    | Commercial Real Estate, Construction                                                                         |   |   |   |   |   |   |   |   |   |   |
|             |                    | & Land Development, and Other Dwellings                                                        |   |   | Commercial Participations Purchased |   |   | Commercial Business Loans |   |   | Government |   |
| Loan Grades |                    | 2011                                                                                                                        |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |
| 2           | Modest risk             |                                                                                                                        | $      | 30 |   |   | $ | 31 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,300 |   |   | $ | 4,724 |   |   | $ | - |   |   | $ | - |   |
| 3           | Acceptable risk         |                                                                                                                        |   | 80,463 |   |   |   | 63,330 |   |   |   | 1,460 |   |   |   | 1,473 |   |   |   | 33,118 |   |   |   | 30,549 |   |   |   | 9,062 |   |   |   | 10,270 |   |
| 4           | Pass/monitor            |                                                                                                                        |   | 58,784 |   |   |   | 78,758 |   |   |   | 6,245 |   |   |   | 6,482 |   |   |   | 20,704 |   |   |   | 21,131 |   |   |   | - |   |   |   | - |   |
| 5           | Special mention (watch) |                                                                                                                        |   | 10,844 |   |   |   | 9,817 |   |   |   | 6,146 |   |   |   | 6,419 |   |   |   | 3,532 |   |   |   | 2,517 |   |   |   | - |   |   |   | - |   |
| 6           | Substandard             |                                                                                                                        |   | 11,149 |   |   |   | 11,680 |   |   |   | 14,396 |   |   |   | 14,492 |   |   |   | 1,425 |   |   |   | 2,805 |   |   |   | - |   |   |   | - |   |
| 7           | Doubtful                |                                                                                                                        |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|             | Total                   |                                                                                                                        | $      | 161,270 |   |   | $ | 163,616 |   |   | $ | 28,247 |   |   | $ | 28,866 |   |   | $ | 63,079 |   |   | $ | 61,726 |   |   | $ | 9,062 |   |   | $ | 10,270 |   |

|          |   | (Dollars in thousands)                                                                                           |    |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------|---------|
|          |   | Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity |    |
|          |   | Residential Real Estate,                                                                                         |    |   |   |   |   |   |   |   |   |
|          |   | Including Home Equity                                                                                            |    |   | Consumer Loans |   |
|          |   | 2011                                                                                                                       |    |   | 2010 |   |   | 2011 |   |   | 2010 |   |
| Performing    |   | $                                                                                                                          | 146,162 |   |   | $ | 149,892 |   |   | $ | 621 |   |   | $ | 871 |   |
| Nonperforming |   |                                                                                                                       | 2,909   |   |   |   | 2,989 |   |   |   | - |   |   |   | 3 |   |
| Total         |   | $                                                                                                                          | 149,071 |   |   | $ | 152,881 |   |   | $ | 621 |   |   | $ | 874 |   |

----

|                                                                             |   |                 |   |   | For the three months ended |   |
|----------------------------------------------------------------------------------|--------|----------------------|--------|--------|----------------------------|--------|
|                                                                             |   | As of March 31, 2011 |   |   | March 31, 2011             |   |
|                                                                             |   |                 |   |   | Average                    |   |   | Interest |   |
| (Dollars in thousands)                                                           |   | Recorded             |   |   | Unpaid Principal           |   |   | Related |   |   | Recorded |   |   | Income |   |
|                                                                             |   | Investment           |   |   | Balance                    |   |   | Allowance |   |   | Investment |   |   | Recognized |   |
| With no related allowance recorded:                                              |   |                 |   |   |                       |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   | $                    | 64     |   |                       | $      | 130 |   |   | $ | - |   |   | $ | 64 |   |   | $ | - |   |
| Commercial real estate, construction & land development, and other dwellings |   |                 | 5,827  |   |                       |   | 6,466 |   |   |   | - |   |   |   | 3,856 |   |   |   | 229 |   |
| Commercial participations purchased                                              |   |                 | 2,696  |   |                       |   | 8,179 |   |   |   | - |   |   |   | 2,878 |   |   |   | 92 |   |
| Commercial business loans                                                        |   |                 | -      |   |                       |   | - |   |   |   | - |   |   |   | 1,370 |   |   |   | - |   |
| With an allowance recorded:                                                      |   |                 |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   |                 | 55     |   |                       |   | 55 |   |   |   | 1 |   |   |   | 28 |   |   |   | 1 |   |
| Commercial real estate, construction & land development, and other dwellings |   |                 | 4,512  |   |                       |   | 4,692 |   |   |   | 1,074 |   |   |   | 5,668 |   |   |   | 139 |   |
| Commercial participations purchased                                              |   |                 | 11,923 |   |                       |   | 11,923 |   |   |   | 2,886 |   |   |   | 10,242 |   |   |   | 236 |   |
| Commercial business loans                                                        |   |                 | 118    |   |                       |   | 118 |   |   |   | 18 |   |   |   | 135 |   |   |   | 6 |   |
| Total:                                                                           |   |                 |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   | $                    | 119    |   |                       | $      | 185 |   |   | $ | 1 |   |   | $ | 92 |   |   | $ | 1 |   |
| Commercial real estate, construction & land development, and other dwellings |   | $                    | 10,339 |   |                       | $      | 11,158 |   |   | $ | 1,074 |   |   | $ | 9,523 |   |   | $ | 368 |   |
| Commercial participations purchased                                              |   | $                    | 14,619 |   |                       | $      | 20,102 |   |   | $ | 2,886 |   |   | $ | 13,120 |   |   | $ | 328 |   |
| Commercial business loans                                                        |   | $                    | 118    |   |                       | $      | 118 |   |   | $ | 18 |   |   | $ | 1,504 |   |   | $ | 6 |   |

|                                                                             |   | As of December 31, 2010 |   |
|----------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                             |   |                    |   |
| (Dollars in thousands)                                                           |   | Recorded                |   |   | Unpaid principal |   |   | Related |   |
|                                                                             |   | investment              |   |   | balance |   |   | allowance |   |
| With no related allowance recorded:                                              |   |                    |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   | $                       | 64     |   |   | $ | 64 |   |   | $ | - |   |
| Commercial real estate, construction & land development, and other dwellings |   |                    | 1,884  |   |   |   | 1,992 |   |   |   | - |   |
| Commercial participations purchased                                              |   |                    | 3,060  |   |   |   | 8,123 |   |   |   | - |   |
| Commercial business loans                                                        |   |                    | 2,739  |   |   |   | 2,831 |   |   |   | - |   |
| With an allowance recorded:                                                      |   |                    |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   |                    | -      |   |   |   | - |   |   |   | - |   |
| Commercial real estate, construction & land development, and other dwellings |   |                    | 6,823  |   |   |   | 6,823 |   |   |   | 1,057 |   |
| Commercial participations purchased                                              |   |                    | 8,560  |   |   |   | 8,560 |   |   |   | 544 |   |
| Commercial business loans                                                        |   |                    | 151    |   |   |   | 151 |   |   |   | 120 |   |
| Total:                                                                           |   |                    |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   | $                       | 64     |   |   | $ | 64 |   |   | $ | - |   |
| Commercial real estate, construction & land development, and other dwellings |   | $                       | 8,707  |   |   | $ | 8,815 |   |   | $ | 1,057 |   |
| Commercial participations purchased                                              |   | $                       | 11,620 |   |   | $ | 16,683 |   |   | $ | 544 |   |
| Commercial business loans                                                        |   | $                       | 2,890  |   |   | $ | 2,982 |   |   | $ | 120 |   |

----

|                                                                        |   | (Dollars in thousands) |   |   |       |   |   |         |   |   |       |   |
|----------------------------------------------------------------------------------|--------|------------------------|--------|--------|------------|--------|--------|--------------|--------|--------|------------|--------|
|                                                                             |   |                   |   |   |       |   |   |         |   |   |       |   |   |   |   |   |   |   |   | Recorded |   |
|                                                                             |   |                   |   |   |       |   |   |         |   |   |       |   |   |   |   |   | Total |   |   | Investments |   |
|                                                                             |   | 30-59 Days             |   |   | 60-89 Days |   |   | Greater Than |   |   | Total Past |   |   |   |   |   | Financing |   |   | 90 Days and |   |
|                                                                             |   | Past Due               |   |   | Past Due   |   |   | 90 Days      |   |   | Due        |   |   | Current |   |   | Receivables |   |   | Accruing |   |
| March 31, 2011                                                                   |   |                   |   |   |       |   |   |         |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   | $                      | 4,037  |   |       | $      | 838    |         |   | $      | 2,549      |   |   | $ | 7,424 |   |   | $ | 141,647 |   |   | $ | 149,071 |   |   | $ | 323 |   |
| Consumer loans                                                                   |   |                   | -      |   |       |   | -      |         |   |   | 38         |   |   |   | 38 |   |   |   | 583 |   |   |   | 621 |   |   |   | 2 |   |
| Commercial real estate, construction & land development, and other dwellings |   |                   | 2,250  |   |       |   | 28     |         |   |   | 5,111      |   |   |   | 7,389 |   |   |   | 153,879 |   |   |   | 161,268 |   |   |   | - |   |
| Commercial participations purchased                                              |   |                   | -      |   |       |   | -      |         |   |   | 14,396     |   |   |   | 14,396 |   |   |   | 13,852 |   |   |   | 28,248 |   |   |   | - |   |
| Commercial business loans                                                        |   |                   | 463    |   |       |   | 73     |         |   |   | 18         |   |   |   | 554 |   |   |   | 62,526 |   |   |   | 63,080 |   |   |   | - |   |
| Government                                                                       |   |                   |   |   |       |   |   |         |   |   |       |   |   |   | - |   |   |   | 9,062 |   |   |   | 9,062 |   |   |   | - |   |
| Total                                                                            |   | $                      | 6,750  |   |       | $      | 939    |         |   | $      | 22,112     |   |   | $ | 29,801 |   |   | $ | 381,549 |   |   | $ | 411,350 |   |   | $ | 325 |   |
|                                                                             |   |                   |   |   |       |   |   |         |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                                                |   |                   |   |   |       |   |   |         |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential real estate, including home equity                                   |   | $                      | 5,832  |   |       | $      | 2,423  |         |   | $      | 2,859      |   |   | $ | 11,114 |   |   | $ | 141,767 |   |   | $ | 152,881 |   |   | $ | 145 |   |
| Consumer loans                                                                   |   |                   | 29     |   |       |   | -      |         |   |   | 3          |   |   |   | 32 |   |   |   | 842 |   |   |   | 874 |   |   |   | 3 |   |
| Commercial real estate, construction & land development, and other dwellings |   |                   | 410    |   |       |   | 2,573  |         |   |   | 3,747      |   |   |   | 6,730 |   |   |   | 156,886 |   |   |   | 163,616 |   |   |   | - |   |
| Commercial participations purchased                                              |   |                   | -      |   |       |   | -      |         |   |   | 14,492     |   |   |   | 14,492 |   |   |   | 14,374 |   |   |   | 28,866 |   |   |   | - |   |
| Commercial business loans                                                        |   |                   | 408    |   |       |   | 18     |         |   |   | 354        |   |   | $ | 780 |   |   |   | 60,946 |   |   |   | 61,726 |   |   |   | - |   |
| Government                                                                       |   |                   | -      |   |       |   | -      |         |   |   | -          |   |   |   | - |   |   |   | 10,270 |   |   |   | 10,270 |   |   |   | - |   |
| Total                                                                            |   | $                      | 6,679  |   |       | $      | 5,014  |         |   | $      | 21,455     |   |   | $ | 33,148 |   |   | $ | 385,085 |   |   | $ | 418,233 |   |   | $ | 148 |   |

|                                                                             |   | (Dollars in thousands) |   |
|----------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                             |   | March 31,                   |   |   | December 31, |   |
|                                                                             |   | 2011                             |   |   | 2010 |   |
| Residential real estate, including home equity                                   |   | $                                | 2,546  |   |   | $ | 2,843 |   |
| Consumer loans                                                                   |   |                             | 38     |   |   |   | - |   |
| Commercial real estate, construction & land development, and other dwellings |   |                             | 5,772  |   |   |   | 6,150 |   |
| Commercial participations purchased                                              |   |                             | 14,396 |   |   |   | 14,492 |   |
| Commercial business loans                                                        |   |                             | 136    |   |   |   | 482 |   |
| Government                                                                       |   |                             | -      |   |   |   | - |   |
| Total                                                                            |   | $                                | 22,888 |   |   | $ | 23,967 |   |

|                                      |   | (Dollars in thousands) |   |
|-------------------------------------------|--------|------------------------|--------|
|                                      |   | March 31,         |   |   | December 31, |   |
|                                      |   | 2011                   |   |   | 2010 |   |
| Commercial real estate and other dwelling |   |                   | 1,974  |   |   |   | 563 |   |
| Residential real estate                   |   |                   | 678    |   |   |   | 931 |   |
| Construction and land development         |   | $                      | 136    |   |   | $ | 1,804 |   |
| Total                                     |   | $                      | 2,788  |   |   | $ | 3,298 |   |

----

|                                                                      |   | (Dollars in thousands, except per share data) |      |
|---------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|-----------|
|                                                                      |   | Three Months Ended                                                          |      |
|                                                                      |   | March 31,                                                                   |      |
|                                                                      |   | 2011                                                                        |      |   | 2010 |   |
| Basic earnings per common share:                                          |   |                                                                        |      |   |   |   |
| Net income as reported                                                    |   | $                                                                           | 1,172     |   |   | $ | 1,389 |   |
| Weighted average common shares outstanding:                               |   |                                                                        | 2,828,977 |   |   |   | 2,820,842 |   |
| Basic earnings per common share:                                          |   | $                                                                           | 0.41      |   |   | $ | 0.49 |   |
| Diluted earnings per common share:                                        |   |                                                                        |      |   |   |   |   |   |
| Net income as reported                                                    |   | $                                                                           | 1,172     |   |   | $ | 1,389 |   |
| Weighted average common shares outstanding:                               |   |                                                                        | 2,828,977 |   |   |   | 2,820,842 |   |
| Add: Dilutive effect of assumed stock option exercises:                   |   |                                                                        | -         |   |   |   | - |   |
| Weighted average common and dilutive potential common shares outstanding: |   |                                                                        | 2,828,977 |   |   |   | 2,820,842 |   |
| Diluted earnings per common share:                                        |   | $                                                                           | 0.41      |   |   | $ | 0.49 |   |

|                           |   |   |   |      |   |   | Weighted-   |   |   |      |
|--------------------------------|--------|--------|--------|-----------|--------|--------|-------------|--------|--------|-----------|
|                           |   |   |   | Weighted- |   |   | Average     |   |   |      |
|                           |   |   |   | Average   |   |   | Remaining   |   |   | Aggregate |
|                           |   |   |   | Exercise  |   |   | Contractual |   |   | Intrinsic |
| Options                        |   | Shares |   | Price     |   |   | Term        |   |   | Value     |
| Outstanding at January 1, 2011 |   |   | 49,247 |      |   | $      | 24.27       |   |   |      |   |   |   |
| Granted                        |   |   | -      |      |   |   | -           |   |   |      |   |   |   |
| Exercised                      |   |   | -      |      |   |   | -           |   |   |      |   |   |   |
| Forfeited                      |   |   | -      |      |   |   | -           |   |   |      |   |   |   |
| Expired                        |   |   | (8,747 | )         |   | $      | 19.50       |   |   |      |   |   |   |
| Outstanding at March 31, 2011  |   |   | 40,500 |      |   | $      | 25.30       |   |   |  1.9 |   |   | - |
| Exercisable at March 31, 2011  |   |   | 39,500 |      |   | $      | 25.22       |   |   | 1.7       |   |   | - |

----

----

|                                |   | (Dollars in thousands)     |   |
|-------------------------------------|--------|--------------------------------------|--------|
|                                |   | Other-than-temporary impairment |   |
| Ending balance, December 31, 2010   |   | $                                    | 264    |   |
| Additions not previously recognized |   |                                 | -      |   |
| Ending balance, March 31, 2011      |   | $                                    | 264    |   |

----

| Cusip                                                                    |   | 74043CAC1   |      |   | 74042TAJ0    |   |       | 01449TAB9 |   |   | 01450NAC6   |   |
|--------------------------------------------------------------------------|--------|-------------|-----------|--------|--------------|--------|------------|-----------|--------|--------|-------------|--------|
| Deal name                                                                |   | PreTSL XXIV |      |   | PreTSL XXVII |   |       | Alesco IX |   |   | Alesco XVII |   |
| Class                                                                    |   | Caaa3       |      |   | Ca           |   |       | CCC-      |   |   | Ca          |   |
| Book value                                                               |   |        | 1,256,972 |   |         |   | 1,296,077  |      |   |   | 1,309,886   |   |   |   | 1,351,903 |   |
| Fair value                                                               |   |        | 330,261   |   |         |   | 201,451    |      |   |   | 755,100     |   |   |   | 279,651 |   |
| Unrealized gains/(losses)                                                |   |        | (926,710  | )      |         |   | (1,094,626 | )         |   |   | (554,786    | )      |   |   | (1,072,252 | ) |
| Lowest credit rating assigned                                            |   | Caa3        |      |   |         | C      |       |      | CCC-   |   |        |   | C |   |
| Number of performing banks                                               |   |        | 47        |   |         |   | 27         |      |   |   | 43          |   |   |   | 36 |   |
| Number of performing insurance companies                                 |   |        | 12        |   |         |   | 7          |      |   |   | 10          |   |   |   | n/a |   |
| Number of issuers in default                                             |   |        | 15        |   |         |   | 6          |      |   |   | 7           |   |   |   | 7 |   |
| Number of issuers in deferral                                            |   |        | 19        |   |         |   | 9          |      |   |   | 16          |   |   |   | 13 |   |
| Defaults & deferrals as a % of performing collateral                 |   |        | 61.55     | %      |         |   | 37.12      | %         |   |   | 45.03       | %      |   |   | 55.48 | % |
| Subordination:                                                           |   |        |      |   |         |   |       |      |   |   |        |   |   |   |   |   |
| As a % of performing collateral                                          |   |        | -23.73    | %      |         |   | -21.31     | %         |   |   | 16.24       | %      |   |   | -4.04 | % |
| As a % of performing collateral - adjusted for projected future defaults |   |        | -29.02    | %      |         |   | -27.56     | %         |   |   | 12.29       | %      |   |   | -8.38 | % |
| Other-than-temporary impairment model assumptions:                       |   |        |      |   |         |   |       |      |   |   |        |   |   |   |   |   |
| Defaults:                                                                |   |        |      |   |         |   |       |      |   |   |        |   |   |   |   |   |
| Year 1 - issuer average                                                  |   |        | 2.10      | %      |         |   | 2.30       | %         |   |   | 2.10        | %      |   |   | 2.00 | % |
| Year 2 - issuer average                                                  |   |        | 1.00      | %      |         |   | 1.30       | %         |   |   | 1.20        | %      |   |   | 1.00 | % |
| Year 3 - issuer average                                                  |   |        | 1.00      | %      |         |   | 1.30       | %         |   |   | 1.20        | %      |   |   | 1.00 | % |
| > 3 Years - issuer average                                            |   |        | (1        | )      |         |   | (1         | )         |   |   | (1          | )      |   |   | (1 | ) |
| Discount rate - 3 month Libor, plus implicit yield spread at purchase    |   |        | 1.48      | %      |         |   | 1.23       | %         |   |   | 1.27        | %      |   |   | 1.44 | % |
| Recovery assumptions                                                     |   |        | (2        | )      |         |   | (2         | )         |   |   | (2          | )      |   |   | (2 | ) |
| Prepayments                                                              |   |        | 0.00      | %      |         |   | 0.00       | %         |   |   | 0.00        | %      |   |   | 0.00 | % |
| Other-than-temporary impairment                                          |   |        | 41,100    |   |         |   | 132,000    |      |   |   | 29,250      |   |   |   | 61,950 |   |

----

|                                                                           |   |               |    |   | (Dollars in thousands)                                                          |   |
|--------------------------------------------------------------------------------|--------|--------------------|---------|--------|-------------------------------------------------------------------------------------------|--------|
|                                                                           |   |               |    |   | Fair Value Measurements at March 31, 2011 Using        |   |
|                                                                           |   | March 31,2011 |    |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservable Inputs(Level 3) |   |
|                                                                           |   |               |    |   |                                                                                      |   |   |   |   |   |   |   |
| Assets:                                                                        |   |               |    |   |                                                                                      |   |   |   |   |   |   |   |
| Available-for-sale debt securities                                             |   |               |    |   |                                                                                      |   |   |   |   |   |   |   |
| U.S. government sponsored entities                                             |   | $                  | 8,338   |   |                                                                                      | $      | - |   |   | $ | 8,338 |   |   | $ | - |   |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |               | 104,130 |   |                                                                                      |   | - |   |   |   | 104,130 |   |   |   | - |   |
| Municipal securities                                                           |   |               | 39,366  |   |                                                                                      |   | - |   |   |   | 39,366 |   |   |   | - |   |
| Collateralized debt obligations                                                |   |               | 1,566   |   |                                                                                      |   | - |   |   |   | - |   |   |   | 1,566 |   |
| Total securities available-for-sale                                            |   | $                  | 153,400 |   |                                                                                      | $      | - |   |   | $ | 151,834 |   |   | $ | 1,566 |   |

|                                                                           |   |                  |    |   | (Dollars in thousands)                                                          |   |
|--------------------------------------------------------------------------------|--------|-----------------------|---------|--------|-------------------------------------------------------------------------------------------|--------|
|                                                                           |   |                  |    |   | Fair Value Measurements at December 31, 2010 Using     |   |
|                                                                           |   | December 31,2010 |    |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservable Inputs(Level 3) |   |
|                                                                           |   |                  |    |   |                                                                                      |   |   |   |   |   |   |   |
| Assets:                                                                        |   |                  |    |   |                                                                                      |   |   |   |   |   |   |   |
| Available-for-sale debt securities                                             |   |                  |    |   |                                                                                      |   |   |   |   |   |   |   |
| U.S. government sponsored entities                                             |   | $                     | 4,169   |   |                                                                                      | $      | - |   |   | $ | 4,169 |   |   | $ | - |   |
| Collateralized Mortgage Obligations and residential mortgage-backed securities |   |                  | 97,142  |   |                                                                                      |   | - |   |   |   | 97,142 |   |   |   | - |   |
| Municipal securities                                                           |   |                  | 39,365  |   |                                                                                      |   | - |   |   |   | 39,365 |   |   |   | - |   |
| Collateralized debt obligations                                                |   |                  | 1,379   |   |                                                                                      |   | - |   |   |   | - |   |   |   | 1,379 |   |
| Total securities available-for-sale                                            |   | $                     | 142,055 |   |                                                                                      | $      | - |   |   | $ | 140,676 |   |   | $ | 1,379 |   |

| (Dollars in thousands)             |   | Fair Value Measurements atMarch 31, 2011 UsingSignificant UnobservableInputs(Level 3) |   |
|----------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------|--------|
|                                         |   | Available-for-sale securities                                                                                            |   |
|                                         |   | Collateralized Debt Obligations                                                                                     |   |
| Beginning balance, December 31, 2010         |   | $                                                                                                                             | 1,379  |   |
| Transfers in and/or (out) of Level 3         |   |                                                                                                                          | -      |   |
| Total gains or (losses)                      |   |                                                                                                                          |   |   |
| Included in earnings                         |   |                                                                                                                          | -      |   |
| Included in other comprehensive income       |   |                                                                                                                          | 187    |   |
| Purchases, issuances, sales, and settlements |   |                                                                                                                          |   |   |
| Purchases                                    |   |                                                                                                                          | -      |   |
| Issuances                                    |   |                                                                                                                          | -      |   |
| Sales                                        |   |                                                                                                                          | -      |   |
| Settlements                                  |   |                                                                                                                          | -      |   |
| Ending balance, March 31, 2011               |   | $                                                                                                                             | 1,566  |   |

----

|              |   |               |   |   | (Dollars in thousands)                                                          |   |
|------------------------|--------|--------------------|--------|--------|-------------------------------------------------------------------------------------------|--------|
|                   |   |               |   |   | Fair Value Measurements at March 31, 2011 Using        |   |
|                   |   | March 31,2011 |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservable Inputs(Level 3) |   |
| Assets:                |   |               |   |   |                                                                                      |   |   |   |   |   |   |   |
| Impaired loans         |   | $                  | 21,215 |   |                                                                                      | $      | - |   |   | $ | - |   |   | $ | 21,215 |   |
| Foreclosed real estate |   |               | 2,447  |   |                                                                                      |   | - |   |   |   | - |   |   |   | 2,447 |   |

|                   |   |                  |   |   | (Dollars in thousands)                                                          |   |
|------------------------|--------|-----------------------|--------|--------|-------------------------------------------------------------------------------------------|--------|
|                   |   |                  |   |   | Fair Value Measurements at December 31, 2010 Using     |   |
|                   |   | December 31,2010 |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservable Inputs(Level 3) |   |
| Assets:                |   |                  |   |   |                                                                                      |   |   |   |   |   |   |   |
| Impaired loans         |   | $                     | 22,419 |   |                                                                                      | $      | - |   |   | $ | - |   |   | $ | 22,419 |   |
| Foreclosed real estate |   |                  | 2,920  |   |                                                                                      |   | - |   |   |   | - |   |   |   | 2,920 |   |

----

|                          |   | (Dollars in thousands) |    |
|-------------------------------|--------|----------------------------------|---------|
|                          |   | March 31, 2011         |    |
|                          |   | Carrying                         |    |   | Estimated |   |
|                          |   | Value                            |    |   | Fair Value |   |
| Financial assets:        |   |                             |    |   |   |   |
| Cash and cash equivalents     |   | $                                | 18,580  |   |   | $ | 18,580 |   |
| Securities available-for-sale |   |                             | 153,400 |   |   |   | 153,400 |   |
| Securities held-to-maturity   |   |                             | 17,772  |   |   |   | 18,514 |   |
| Loans receivable, net         |   |                             | 401,658 |   |   |   | 464,142 |   |
| Federal Home Loan Bank stock  |   |                             | 3,381   |   |   |   | 3,381 |   |
| Accrued interest receivable   |   |                             | 2,498   |   |   |   | 2,498 |   |
|                          |   |                             |    |   |   |   |   |   |
| Financial liabilities:        |   |                             |    |   |   |   |   |   |
| Demand and savings deposits   |   |                             | 333,279 |   |   |   | 333,279 |   |
| Certificates of deposit       |   |                             | 191,909 |   |   |   | 192,114 |   |
| Repurchase agreements         |   |                             | 24,049  |   |   |   | 24,071 |   |
| Borrowed funds                |   |                             | 26,387  |   |   |   | 26,809 |   |
| Accrued interest payable      |   |                             | 57      |   |   |   | 57 |   |

|                          |   | (Dollars in thousands) |    |
|-------------------------------|--------|------------------------|---------|
|                          |   | December 31, 2010      |    |
|                          |   | Carrying               |    |   | Estimated |   |
|                          |   | Value                  |    |   | Fair Value |   |
| Financial assets:             |   |                   |    |   |   |   |
| Cash and cash equivalents     |   | $                      | 10,938  |   |   | $ | 10,938 |   |
| Securities available-for-sale |   |                   | 142,055 |   |   |   | 142,055 |   |
| Securities held-to-maturity   |   |                   | 18,397  |   |   |   | 19,038 |   |
| Loans held-for-sale           |   |                   | 422     |   |   |   | 428 |   |
| Loans receivable, net         |   |                   | 409,112 |   |   |   | 472,307 |   |
| Federal Home Loan Bank stock  |   |                   | 3,381   |   |   |   | 3,381 |   |
| Accrued interest receivable   |   |                   | 2,591   |   |   |   | 2,591 |   |
|                          |   |                   |    |   |   |   |   |   |
| Financial liabilities:        |   |                   |    |   |   |   |   |   |
| Demand and savings deposits   |   |                   | 321,825 |   |   |   | 321,825 |   |
| Certificates of deposit       |   |                   | 198,446 |   |   |   | 198,799 |   |
| Repurchase agreements         |   |                   | 16,074  |   |   |   | 15,959 |   |
| Borrowed funds                |   |                   | 32,544  |   |   |   | 32,983 |   |
| Accrued interest payable      |   |                   | 81      |   |   |   | 81 |   |

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|   | ·  | We expect to face increased regulation of our industry, particularly in connection with the regulatory overhaul provisions of the Dodd-Frank Act.  Compliance with such regulation may increase our costs and limit our ability to pursue business opportunities. |
|--------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ·  | Our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we use to select, manage and underwrite our customers become less predictive of future behaviors. |
|--------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ·  | The process we use to estimate losses inherent in our credit exposure requires difficult, subjective and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers to repay their loans, which may no longer be capable of accurate estimation which may, in turn, impact the reliability of the process. |
|--------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ·  | Our ability to borrow from other financial institutions on favorable terms or at all could be adversely affected by disruptions in the capital markets or other events, including actions by rating agencies and deteriorating investor expectations. |
|--------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ·  | Competition in our industry could intensify as a result of the increasing consolidation of financial services companies in connection with current market conditions. |
|--------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ·  | We may be required to pay significantly higher deposit insurance premiums because market developments have significantly depleted the insurance fund of the Federal Deposit Insurance Corporation (FDIC) and reduced the ratio of reserves to insured deposits. |
|--------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (Dollars in millions)           |   |   |   |   | Required for     |   |   | To be well |   |
|-------------------------------------------|--------|--------|--------|--------|-----------------------|--------|--------|----------------------|--------|
|                                      |   | Actual |   |   | adequate capital |   |   | capitalized          |   |
| At March 31, 2011          |   | Amount |   |   | Ratio                 |   |   | Amount               |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                      |   |   |   |   |                  |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital to risk-weighted assets     |   | $      | 62.1   |   |                  |   | 13.5   | %                    |   | $ | 36.7 |   |   |   | 8.0 | % |   | $ | 45.8 |   |   |   | 10.0 | % |
| Tier 1 capital to risk-weighted assets    |   | $      | 56.3   |   |                  |   | 12.3   | %                    |   | $ | 18.3 |   |   |   | 4.0 | % |   | $ | 27.5 |   |   |   | 6.0 | % |
| Tier 1 capital to adjusted average assets |   | $      | 56.3   |   |                  |   | 8.8    | %                    |   | $ | 19.3 |   |   |   | 3.0 | % |   | $ | 32.1 |   |   |   | 5.0 | % |

| (Dollars in millions)                     |   |   |   |   | Required for     |   |   | To be well  |   |
|-------------------------------------------|--------|--------|--------|--------|------------------|--------|--------|-------------|--------|
|                                      |   | Actual |   |   | adequate capital |   |   | capitalized |   |
| At December 31, 2010                      |   | Amount |   |   | Ratio            |   |   | Amount      |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                      |   |   |   |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital to risk-weighted assets     |   | $      | 61.5   |   |             |   | 12.9   | %           |   | $ | 38.0 |   |   |   | 8.0 | % |   | $ | 47.6 |   |   |   | 10.0 | % |
| Tier 1 capital to risk-weighted assets    |   | $      | 55.5   |   |             |   | 11.7   | %           |   | $ | 19.0 |   |   |   | 4.0 | % |   | $ | 28.5 |   |   |   | 6.0 | % |
| Tier 1 capital to adjusted average assets |   | $      | 55.5   |   |             |   | 8.5    | %           |   | $ | 19.5 |   |   |   | 3.0 | % |   | $ | 32.6 |   |   |   | 5.0 | % |

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| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk |
|--------------------|------------------------------------------------------------|

| Item 4.  | Controls and Procedures |
|--------------------|-------------------------|

|   | (a) | Evaluation of Disclosure Controls and Procedures. |
|--------|-----|---------------------------------------------------|

|   | (b) | Changes in Internal Control Over Financial Reporting. |
|--------|-----|-------------------------------------------------------|

----

| Item 1. | Legal Proceedings |
|--------------|-------------------|

| Item 1A. | Risk Factors |
|---------------|--------------|

| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds |
|--------------------|-------------------------------------------------------------|

| Item 3.  | Defaults Upon Senior Securities |
|--------------------|---------------------------------|

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

| Item 5.  | Other Information |
|--------------------|-------------------|

| Item 6.  | Exhibits |
|--------------------|----------|

| Exhibit |         |                                                              |
|---------|--------------|-------------------------------------------------------------------|
| Number  |         | Description                                                       |
|    |         |                                                              |
| 31.1    |         | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
|    |         |                                                              |
| 31.2    |         | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
|    |         |                                                              |
| 32.1    |    | Section 1350 Certifications                                       |

----

|                            | NORTHWEST INDIANA BANCORP                         |
|---------------------------------|---------------------------------------------------|
|                            |                                              |
| Date:  April 26, 2011 | /s/ David A. Bochnowski                           |
|                            |                                              |
|                            | David A. Bochnowski                               |
|                            | Chairman of the Board and Chief Executive Officer |
|                            |                                              |
| Date:  April 26, 2011 | /s/ Robert T. Lowry                               |
|                            |                                              |
|                            | Robert T. Lowry                                   |
|                            | Senior Vice President, Chief Financial Officer    |
|                            | and Treasurer                                     |

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