|   South Carolina           |   |   58-2322486                 |
|---------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of |   | (IRS Employer Identification No.) |
| incorporation or organization)  |   |                              |

----

| Item 1.   | Financial Statements                                                                        |   |
|-----------|---------------------------------------------------------------------------------------------|--------|
|      |                                                                                        |   |
|      | Consolidated Balance Sheets                                                                 | 4      |
|      | Consolidated Statements of Income                                                           | 5      |
|      | Consolidated Statements of Changes in Shareholders’ Equity                            | 7      |
|      | Consolidated Statements of Cash Flows                                                       | 8      |
|      | Notes to Unaudited Consolidated Financial Statements                                        | 9      |
|      |                                                                                        |   |
| Item 2.   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19     |
| Item 4T.  | Controls and Procedures                                                                     | 29     |
|      |                                                                                        |   |
| PART II - | OTHER INFORMATION                                                                           |   |
|      |                                                                                        |   |
| Item 6.   | Exhibits                                                                                    | 30     |
|      |                                                                                        |   |
| SIGNATURE |                                                                                        | 31     |
|      |                                                                                        |   |

----

----

| COMMUNITY FIRST BANCORPORATION                                                         |   |                                     |    |   |         |   |
|----------------------------------------------------------------------------------------|--------|------------------------------------------|---------|--------|--------------|--------|
| Consolidated Balance Sheets                                                            |   |                                     |    |   |         |   |
|                                                                                   |   | (Unaudited)                              |    |   |         |   |
|                                                                                   |   | September 30,                            |    |   | December 31, |   |
|                                                                                   |   | 2010                                     |    |   | 2009         |   |
|                                                                                   |   | (Dollars in thousands, except per share) |    |
| Assets                                                                                 |   |                                     |    |   |         |   |
|  Cash and due from banks                                                          |   | $                                        | 1,801   |   |         | $      | 1,463 |   |
|     Interest bearing balances due from banks                            |   |                                     | 30,193  |   |         |   | 46,020 |   |
|  Cash and cash equivalents                                                        |   |                                     | 31,994  |   |         |   | 47,483 |   |
|     Securities available-for-sale                                       |   |                                     | 187,311 |   |         |   | 141,710 |   |
|       Securities held-to-maturity (fair value $7,614 for 2010 |   |                                     |    |   |         |   |   |   |
|   and $9,476 for 2009)                                                            |   |                                     | 7,128   |   |         |   | 9,024 |   |
|  Other investments                                                                |   |                                     | 1,213   |   |         |   | 1,307 |   |
|  Loans                                                                            |   |                                     | 261,904 |   |         |   | 267,248 |   |
|  Allowance for loan losses                                                        |   |                                     | (6,336  | )      |         |   | (6,052 | ) |
| Loans - net                                                                            |   |                                     | 255,568 |   |         |   | 261,196 |   |
|     Premises and equipment - net                                   |   |                                     | 8,264   |   |         |   | 8,470 |   |
|     Accrued interest receivable                                    |   |                                     | 3,195   |   |         |   | 2,424 |   |
|  Foreclosed assets                                                                |   |                                     | 8,553   |   |         |   | 6,078 |   |
|     Bank-owned life insurance                                           |   |                                     | 9,562   |   |         |   | 9,289 |   |
|  Other assets                                                                     |   |                                     | 3,834   |   |         |   | 5,916 |   |
| Total assets                                                                           |   | $                                        | 516,622 |   |         | $      | 492,897 |   |
|                                                                                   |   |                                     |    |   |         |   |   |   |
| Liabilities                                                                            |   |                                     |    |   |         |   |   |   |
| Deposits                                                                               |   |                                     |    |   |         |   |   |   |
| Noninterest bearing                                                                    |   | $                                        | 44,531  |   |         | $      | 47,067 |   |
| Interest bearing                                                                       |   |                                     | 413,847 |   |         |   | 389,581 |   |
| Total deposits                                                                         |   |                                     | 458,378 |   |         |   | 436,648 |   |
| Accrued interest payable                                                               |   |                                     | 2,436   |   |         |   | 2,043 |   |
| Long-term debt                                                                         |   |                                     | 6,500   |   |         |   | 8,000 |   |
| Other liabilities                                                                      |   |                                     | 1,966   |   |         |   | 1,388 |   |
| Total liabilities                                                                      |   |                                     | 469,280 |   |         |   | 448,079 |   |
|                                                                                   |   |                                     |    |   |         |   |   |   |
| Shareholders' equity                                                                   |   |                                     |    |   |         |   |   |   |
| Preferred stock - Series A - non-voting 5% cumulative - $1,000 per share               |   |                                     |    |   |         |
|     liquidation preference; 5,000 shares authorized;                    |   |                                     |    |   |         |   |   |   |
|  issued and outstanding - 3,150 shares                                            |   |                                     | 3,126   |   |         |   | 3,126 |   |
| Preferred stock - no par value; 9,995,000 shares authorized;                           |   |                                     |    |   |         |   |   |   |
| None issued and outstanding                                                            |   |                                     | -       |   |         |   | - |   |
| Common stock - no par value; 10,000,000 shares authorized;                             |   |                                     |    |   |         |   |   |   |
|    issued and outstanding - 3,784,159 for 2010 and                           |   |                                     |    |   |         |   |   |   |
|    3,782,415 for 2009                                                        |   |                                     | 38,940  |   |         |   | 38,923 |   |
|  Additional paid-in capital                                                       |   |                                     | 748     |   |         |   | 748 |   |
|  Retained earnings                                                                |   |                                     | 2,308   |   |         |   | 1,434 |   |
| Accumulated other comprehensive income (loss)                                          |   |                                     | 2,220   |   |         |   | 587 |   |
| Total shareholders' equity                                                             |   |                                     | 47,342  |   |         |   | 44,818 |   |
| Total liabilities and shareholders' equity                                             |   | $                                        | 516,622 |   |         | $      | 492,897 |   |
|                                                                                   |   |                                     |    |   |         |   |   |   |
|                                                                                   |   |                                     |    |   |         |   |   |   |
| See accompanying notes to unaudited consolidated financial statements.                 |   |                                     |    |   |         |   |   |   |

----

| COMMUNITY FIRST BANCORPORATION                                         |   |                                           |   |   |              |   |   |   |   |   |   |   |
|------------------------------------------------------------------------|--------|------------------------------------------------|--------|--------|-------------------|--------|--------|--------|--------|--------|--------|--------|
| Consolidated Statements of Income                                      |   |                                           |   |   |              |   |   |   |   |   |   |   |
|                                                                   |   | (Unaudited)                               |   |
|                                                                   |   | Period Ended September 30,                     |   |
|                                                                   |   | Three Months                              |   |   | Nine Months  |   |
|                                                                   |   | 2010                                           |   |   | 2009              |   |   | 2010   |   |   | 2009   |   |
|                                                                   |   | (Dollars in thousands, except per share)  |   |
| Interest income                                                        |   |                                           |   |   |              |   |   |   |   |   |   |   |
|  Loans, including fees                                            |   | $                                              | 4,068  |   |              | $      | 4,214  |   |   | $      | 12,125 |   |   | $ | 12,460 |   |
| Interest bearing balances due from banks                               |   |                                           | 28     |   |              |   | 14     |   |   |   | 98     |   |   |   | 36 |   |
|  Securities                                                       |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|     Taxable                                             |   |                                           | 1,258  |   |              |   | 1,298  |   |   |   | 3,875  |   |   |   | 4,260 |   |
| Tax-exempt                                                             |   |                                           | 188    |   |              |   | 201    |   |   |   | 584    |   |   |   | 612 |   |
|  Other investments                                                |   |                                           | 1      |   |              |   | 3      |   |   |   | 3      |   |   |   | 3 |   |
|  Federal funds sold                                               |   |                                           | -      |   |              |   | -      |   |   |   | -      |   |   |   | 3 |   |
| Total interest income                                                  |   |                                           | 5,543  |   |              |   | 5,730  |   |   |   | 16,685 |   |   |   | 17,374 |   |
| Interest expense                                                       |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    Time deposits $100M and over                         |   |                                           | 806    |   |              |   | 904    |   |   |   | 2,285  |   |   |   | 2,987 |   |
|  Other deposits                                                   |   |                                           | 1,303  |   |              |   | 1,709  |   |   |   | 4,158  |   |   |   | 5,282 |   |
|  Long-term debt                                                   |   |                                           | 70     |   |              |   | 93     |   |   |   | 219    |   |   |   | 275 |   |
| Total interest expense                                                 |   |                                           | 2,179  |   |              |   | 2,706  |   |   |   | 6,662  |   |   |   | 8,544 |   |
| Net interest income                                                    |   |                                           | 3,364  |   |              |   | 3,024  |   |   |   | 10,023 |   |   |   | 8,830 |   |
| Provision for loan losses                                              |   |                                           | 1,025  |   |              |   | 1,010  |   |   |   | 3,275  |   |   |   | 2,460 |   |
| Net interest income after provision                                    |   |                                           | 2,339  |   |              |   | 2,014  |   |   |   | 6,748  |   |   |   | 6,370 |   |
| Other income                                                           |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                    |   |                                           | 319    |   |              |   | 377    |   |   |   | 929    |   |   |   | 1,048 |   |
| Debit card transaciton fees                                            |   |                                           | 183    |   |              |   | 154    |   |   |   | 533    |   |   |   | 450 |   |
| Net gains (losses) on sales of securities                              |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| available-for-sale                                                     |   |                                           | -      |   |              |   | -      |   |   |   | -      |   |   |   | 90 |   |
| Increase in value of bank-owned                                        |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| life insurance                                                         |   |                                           | 90     |   |              |   | 91     |   |   |   | 272    |   |   |   | 274 |   |
| Other income                                                           |   |                                           | 76     |   |              |   | 82     |   |   |   | 162    |   |   |   | 165 |   |
| Total other income                                                     |   |                                           | 668    |   |              |   | 704    |   |   |   | 1,896  |   |   |   | 2,027 |   |
| Other expenses                                                         |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                         |   |                                           | 1,205  |   |              |   | 1,206  |   |   |   | 3,528  |   |   |   | 3,631 |   |
|   Net occupancy expense                                           |   |                                           | 133    |   |              |   | 132    |   |   |   | 416    |   |   |   | 401 |   |
| Furniture and equipment expense                                        |   |                                           | 95     |   |              |   | 94     |   |   |   | 281    |   |   |   | 287 |   |
| Amortization of computer software                                      |   |                                           | 97     |   |              |   | 112    |   |   |   | 306    |   |   |   | 319 |   |
| Debit card transaction expenses                                        |   |                                           | 120    |   |              |   | 101    |   |   |   | 343    |   |   |   | 315 |   |
|  Directors' fees                                                  |   |                                           | 49     |   |              |   | 28     |   |   |   | 127    |   |   |   | 85 |   |
| FDIC insurance assessment                                              |   |                                           | 233    |   |              |   | 165    |   |   |   | 866    |   |   |   | 535 |   |
|  Other expense                                                    |   |                                           | 558    |   |              |   | 459    |   |   |   | 1,571  |   |   |   | 1,247 |   |
| Total other expenses                                                   |   |                                           | 2,490  |   |              |   | 2,297  |   |   |   | 7,438  |   |   |   | 6,820 |   |
| Income before income taxes                                             |   |                                           | 517    |   |              |   | 421    |   |   |   | 1,206  |   |   |   | 1,577 |   |
| Income tax expense                                                     |   |                                           | 131    |   |              |   | 101    |   |   |   | 214    |   |   |   | 354 |   |
| Net income                                                             |   |                                           | 386    |   |              |   | 320    |   |   |   | 992    |   |   |   | 1,223 |   |
| Deductions for amounts not available to common shareholders:           |   |                                           |   |   |              |   |   |   |   |   |   |   |   |
| Dividends declared or accumulated on                                   |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| preferred stock                                                        |   |                                           | (39    | )      |              |   | -      |   |   |   | (138   | )      |   |   | - |   |
| Net income available to common shareholders                            |   | $                                              | 347    |   |              | $      | 320    |   |   | $      | 854    |   |   | $ | 1,223 |   |
|                                                                   |   |                                           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited consolidated financial statements. |   |                                           |   |   |              |   |   |   |   |   |   |   |   |

----

| COMMUNITY FIRST BANCORPORATION                |   |                                           |   |   |              |   |   |   |   |   |   |   |
|-----------------------------------------------|--------|------------------------------------------------|--------|--------|-------------------|--------|--------|--------|--------|--------|--------|--------|
| Consolidated Statements of Income - continued |   |                                           |   |   |              |   |   |   |   |   |   |   |
|                                          |   | Unaudited)                                |   |
|                                          |   | Period Ended September 30,                     |   |
|                                          |   | Three Months                              |   |   | Nine Months  |   |
|                                          |   | 2010                                           |   |   | 2009              |   |   | 2010   |   |   | 2009   |   |
|                                          |   | (Dollars in thousands, except per share)  |

| Per common share*                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Net income                                                                                                                 |   | $      | 0.09   |   |   | $      | 0.08   |   |   | $      | 0.23   |   |   | $ | 0.32 |   |
|    Net income, assuming dilution                                                                                 |   |   | 0.09   |   |   |   | 0.08   |   |   |   | 0.23   |   |   |   | 0.32 |   |
| __________________                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| * Per common share information has been retroactively adjusted to reflect a 5% stock dividend effective December 15, 2009. |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited consolidated financial statements.                                                     |   |   |   |   |   |   |   |   |   |   |   |   |

----

| COMMUNITY FIRST BANCORPORATION                                  |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |
|---------------------------------------------------------------------------|--------|------------------------------|-----------|--------|-----------|--------|--------|--------|--------|--------|------------|--------|--------|----------|--------|--------|
| Consolidated Statements of Changes in Shareholders' Equity           |   |                         |      |   |      |   |   |   |   |   |       |   |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |
| (Unaudited)                                                               |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   | Accumulated |   |   |   |   |
|                                                                      |   | Shares of                    |      |   |      |   |   |   |   |   | Additional |   |   |     |   |   | Other |   |   |   |   |
|                                                                      |   | Common                       |      |   | Preferred |   |   | Common |   |   | Paid-in    |   |   | Retained |   |   | Comprehensive |   |   |   |   |
|                                                                      |   | Stock                        |      |   | Stock     |   |   | Stock  |   |   | Capital    |   |   | Earnings |   |   | Income (Loss) |   |   | Total |   |
|                                                                      |   | (Dollars in thousands)  |      |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                             |   |                         | 3,564,279 |   |      | $      | -      |   |   | $      | 37,084     |   |   | $        | 748    |   |   | $ | 1,769 |   |   | $ | 327 |   |   | $ | 39,928 |   |
| Comprehensive income:                                                     |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                |   |                         | -         |   |      |   | -      |   |   |   | -          |   |   |     | -      |   |   |   | 1,223 |   |   |   | - |   |   |   | 1,223 |   |
| Unrealized holding gains and losses                                       |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     on available-for-sale securities                       |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     arising during the period, net of                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     income taxes of $630                                   |   |                         | -         |   |      |   | -      |   |   |   | -          |   |   |     | -      |   |   |   | - |   |   |   | 1,126 |   |   |   | 1,126 |   |
| Reclassification adjustment,                                              |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     net of income tax effects of $32                       |   |                         | -         |   |      |   | -      |   |   |   | -          |   |   |     | -      |   |   |   | - |   |   |   | (58 | ) |   |   | (58 | ) |
|   Total other comprehensive     income |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   | 1,068 |   |
|    Total comprehensive income                              |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   | 2,291 |   |
| Exercise of employee stock options                                        |   |                         | 45,532    |   |      |   | -      |   |   |   | 486        |   |   |     | -      |   |   |   | - |   |   |   | - |   |   |   | 486 |   |
| Balance, September 30, 2009                                          |   |                         | 3,609,811 |   |      | $      | -      |   |   | $      | 37,570     |   |   | $        | 748    |   |   | $ | 2,992 |   |   | $ | 1,395 |   |   | $ | 42,705 |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2010                                                  |   |                         | 3,782,415 |   |      | $      | 3,126  |   |   | $      | 38,923     |   |   | $        | 748    |   |   | $ | 1,434 |   |   | $ | 587 |   |   | $ | 44,818 |   |
| Comprehensive income:                                                     |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                |   |                         | -         |   |      |   | -      |   |   |   | -          |   |   |     | -      |   |   |   | 992 |   |   |   | - |   |   |   | 992 |   |
| Unrealized holding gains and losses                                       |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     on available-for-sale securities                       |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     arising during the period, net of                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     income taxes of $914                                   |   |                         | -         |   |      |   | -      |   |   |   | -          |   |   |     | -      |   |   |   | - |   |   |   | 1,633 |   |   |   | 1,633 |   |
|  Total other comprehensive   income                        |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   | 1,633 |   |
|    Total comprehensive income                         |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   | 2,625 |   |
| Dividends paid on preferred stock                                         |   |                         | -         |   |      |   | -      |   |   |   | -          |   |   |     | -      |   |   |   | (118 | ) |   |   | - |   |   |   | (118 | ) |
| Exercise of employee stock options                                        |   |                         | 1,744     |   |      |   | -      |   |   |   | 17         |   |   |     | -      |   |   |   | - |   |   |   | - |   |   |   | 17 |   |
| Balance, September 30, 2010                                          |   |                         | 3,784,159 |   |      | $      | 3,126  |   |   | $      | 38,940     |   |   | $        | 748    |   |   | $ | 2,308 |   |   | $ | 2,220 |   |   | $ | 47,342 |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |                         |      |   |      |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited consolidated financial statements.    |   |                         |      |   |      |   |   |   |   |   |       |   |   |

----

| COMMUNITY FIRST BANCORPORATION        |   |                   |   |   |   |   |
|---------------------------------------|--------|------------------------|--------|--------|--------|--------|
| Consolidated Statements of Cash Flows |   |                   |   |   |   |   |
|                                  |   | (Unaudited)            |   |
|                                  |   | Nine Months Ended      |   |
|                                  |   | September 30,     |   |
|                                  |   | 2010                   |   |   | 2009   |   |
|                                  |   | (Dollars in thousands) |   |
| Operating activities                  |   |                   |   |   |   |   |
|                                  |   | $                      | 992    |   |   | $      | 1,223 |   |
|    Net income               |   |                   |   |   |   |   |   |   |

|   Adjustments to reconcile net income to net                                     |   |   |     |   |   |   |     |   |
|---------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|
|       cash provided by operating activities                       |   |   |     |   |   |   |     |   |
|        Provision for loan losses                        |   |   | 3,275    |   |   |   | 2,460    |   |
|        Depreciation                                     |   |   | 287      |   |   |   | 293      |   |
|        Amortization of net loan (fees) and costs        |   |   | (59      | )      |   |   | (105     | )      |
|        Securities accretion and premium amortization         |   |   | 1,079    |   |   |   | 576      |   |
|        Net (gains) on sales of securities available-for-sale |   |   | -        |   |   |   | (90      | )      |
|        Net (gains) on sales of foreclosed assets             |   |   | (7       | )      |   |   | (4       | )      |
|        Increase in value of bank-owned life insurance        |   |   | (273     | )      |   |   | (274     | )      |
|        (Increase) decrease in interest receivable            |   |   | (771     | )      |   |   | 34       |   |
|        Increase (decrease) in interest payable               |   |   | 393      |   |   |   | (723     | )      |
|        Decrease in prepaid expenses and other assets         |   |   | 1,168    |   |   |   | 258      |   |
|        Increase in other accrued expenses                    |   |   | 578      |   |   |   | 610      |   |
|         Net cash provided by operating activities       |   |   | 6,662    |   |   |   | 4,258    |   |
|                                                                                  |   |   |     |   |   |   |     |   |
| Investing activities                                                                  |   |   |     |   |   |   |     |   |
|     Purchases of available-for-sale securities                         |   |   | (144,027 | )      |   |   | (121,643 | )      |
|     Maturities, calls and paydowns of securities available-for-sale    |   |   | 99,895   |   |   |   | 95,545   |   |
|     Maturities, calls and paydowns of securities held-to-maturity      |   |   | 1,895    |   |   |   | 2,316    |   |
|     Proceeds of sales of securities available-for-sale                 |   |   | -        |   |   |   | 5,853    |   |
|     Purchases of other investments                                     |   |   | -        |   |   |   | (125     | )      |
|     Proceeds from sales of other investments                           |   |   | 94       |   |   |   | 38       |   |
|     Net increase in loans made to customers                            |   |   | (618     | )      |   |   | (5,105   | )      |
|     Purchases of premises and equipment                                |   |   | (81      | )      |   |   | (177     | )      |
|     Proceeds of sale of foreclosed assets                              |   |   | 591      |   |   |   | 463      |   |
|     Additional investments in foreclosed assets                        |   |   | (29      | )      |   |   | (244     | )      |
|     Proceeds of redemption of bank-owned life insurance                |   |   | -        |   |   |   | 1,062    |   |
|     Investment in bank-owned life insurance                            |   |   | -        |   |   |   | (1,500   | )      |
|         Net cash used by investing activities           |   |   | (42,280  | )      |   |   | (23,517  | )      |
|                                                                                  |   |   |     |   |   |   |     |   |
| Financing activities                                                                  |   |   |     |   |   |   |     |   |
|     Net decrease in demand deposits, interest                          |   |   |     |   |   |   |     |   |
|        bearing transaction accounts and savings accounts     |   |   | (4,542   | )      |   |   | (14,506  | )      |
|     Net increase in certificates of deposit and other                  |   |   |     |   |   |   |     |   |
|       time deposits                                               |   |   | 26,272   |   |   |   | 16,185   |   |
|     Net increase in short-term borrowings                              |   |   | -        |   |   |   | 1,710    |   |
|     Repayments of long-term debt                                       |   |   | (1,500   | )      |   |   | -        |   |
|     Cash paid in lieu of issuing fractional shares                     |   |   | -        |   |   |   | (3       | )      |
|     Dividends paid on preferred stock                                  |   |   | (118     | )      |   |   | -        |   |
|     Exercise of employee stock options                                 |   |   | 17       |   |   |   | 486      |   |
|         Net cash provided by financing activities       |   |   | 20,129   |   |   |   | 3,872    |   |
| Decrease in cash and cash equivalents                                                 |   |   | (15,489  | )      |   |   | (15,387  | )      |
| Cash and cash equivalents, beginning                                                  |   |   | 47,483   |   |   |   | 40,966   |   |
| Cash and cash equivalents, ending                                                     |   | $      | 31,994   |   |   | $      | 25,579   |   |
|                                                                                  |   |   |     |   |   |   |     |   |
| See accompanying notes to unaudited consolidated financial statements.                |   |   |     |   |   |   |     |   |

----

| COMMUNITY FIRST BANCORPORATION                    |   |                   |   |   |   |   |
|---------------------------------------------------|--------|------------------------|--------|--------|--------|--------|
| Consolidated Statements of Cash Flows - continued |   |                   |   |   |   |   |
|                                              |   |                   |   |   |   |   |
|                                              |   |                   |   |   |   |   |
|                                              |   | (Unaudited)            |   |
|                                              |   | Nine Months Ended      |   |
|                                              |   | September 30,     |   |
|                                              |   | 2010                   |   |   | 2009   |   |
|                                              |   | (Dollars in thousands) |   |
|                                              |   |                   |   |   |   |   |   |   |

| Supplemental Disclosure of Cash Flow Information                       |   |    |   |   |   |    |
|------------------------------------------------------------------------|--------|---------|--------|--------|--------|---------|
| Cash paid during the year for:                                         |   |    |   |   |   |    |
|     Interest                                            |   |  $ | 6,269  |   |   |  $ | 9,267 |   |
|     Income taxes                                        |   |    | 68     |   |   |    | 27 |   |
| Net transfers from loans to foreclosed assets                          |   |    | 3,030  |   |   |    | 3,371 |   |
| Noncash investing and financing activities:                            |   |    |   |   |   |    |   |   |
|    Other comprehensive income                                |   |    | 1,633  |   |   |    | 1,068 |   |
|                                                                   |   |    |   |   |   |    |   |   |
| See accompanying notes to unaudited consolidated financial statements. |   |    |   |   |   |    |   |   |

----

|                                      |   | September 30, 2010     |    |
|-------------------------------------------|--------|------------------------|---------|
|                                      |   |                   |    |   | Gross |   |   | Gross |   |   |   |   |
|                                      |   |                   |    |   | Unrealized |   |   | Unrealized |   |   | Estimated |   |
|                                      |   | Amortized              |    |   | Holding |   |   | Holding |   |   | Fair |   |
|                                      |   | Cost                   |    |   | Gains |   |   | Losses |   |   | Value |   |
|                                      |   | (Dollars in thousands) |    |
| Available-for-sale                        |   |                   |    |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                |   |                   |    |   |   |   |   |   |   |   |   |   |
| issued by US Government agencies          |   | $                      | 1,196   |   |   | $ | 63 |   |   | $ | - |   |   | $ | 1,259 |   |
| Government sponsored enterprises (GSEs)   |   |                   | 141,272 |   |   |   | 1,672 |   |   |   | 3 |   |   |   | 142,941 |   |
| Mortgage-backed securities issued by GSEs |   |                   | 23,329  |   |   |   | 1,192 |   |   |   | - |   |   |   | 24,521 |   |
| State, county and municipal               |   |                   | 18,050  |   |   |   | 565 |   |   |   | 25 |   |   |   | 18,590 |   |
| Total                                     |   | $                      | 183,847 |   |   | $ | 3,492 |   |   | $ | 28 |   |   | $ | 187,311 |   |
|                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued by US Government agencies          |   | $                      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Government sponsored enterprises (GSEs)   |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Mortgage-backed securities issued by GSEs |   |                   | 7,128   |   |   |   | 486 |   |   |   | - |   |   |   | 7,614 |   |
| State, county and municipal               |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                     |   | $                      | 7,128   |   |   | $ | 486 |   |   | $ | - |   |   | $ | 7,614 |   |
|                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | December 31, 2009      |    |
|                                      |   |                   |    |   |   | Gross |   |   | Gross |   |   |   |   |   |
|                                      |   |                   |    |   |   | Unrealized |   |   | Unrealized |   |   | Estimated |   |
|                                      |   | Amortized              |    |   | Holding |   |   | Holding |   |   | Fair |   |
|                                      |   | Cost                   |    |   | Gains |   |   | Losses |   |   | Value |   |
|                                      |   | (Dollars in thousands) |    |
| Available-for-sale                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued by US Government agencies          |   | $                      | 1,426   |   |   | $ | 49 |   |   | $ | - |   |   | $ | 1,475 |   |
| Government sponsored enterprises (GSEs)   |   |                   | 87,143  |   |   |   | 643 |   |   |   | 823 |   |   |   | 86,963 |   |
| Mortgage-backed securities issued by GSEs |   |                   | 32,707  |   |   |   | 1,005 |   |   |   | 10 |   |   |   | 33,702 |   |
| State, county and municipal               |   |                   | 19,517  |   |   |   | 241 |   |   |   | 188 |   |   |   | 19,570 |   |
| Total                                     |   | $                      | 140,793 |   |   | $ | 1,938 |   |   | $ | 1,021 |   |   | $ | 141,710 |   |
|                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued by US Government agencies          |   | $                      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Government sponsored enterprises (GSEs)   |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Mortgage-backed securities issued by GSEs |   |                   | 9,024   |   |   |   | 452 |   |   |   | - |   |   |   | 9,476 |   |
| State, county and municipal               |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                     |   | $                      | 9,024   |   |   | $ | 452 |   |   | $ | - |   |   | $ | 9,476 |   |

----

|                                          |   | September 30, 2010       |                               |
|-----------------------------------------------|--------|-------------------------------|------------------------------------|
| Available-for-sale at fair value              |   | Due within one year           |                               | Due after one through five years |   | Due after five through ten years |   | Due after ten years |   |  Total |   |
|                                          |   |                          |  (Dollars in thousands)  |   |   |   |   |
| Non-mortgage-backed securities issued by GSEs |   | $                             | -                                  |   |   | $ | 48,350 |   |   | $ | 57,542 |   |   | $ | 37,049 |   |   | $ | 142,941 |   |
| State, county and municpal issuers            |   |                          | 300                                |   |   |   | 848 |   |   |   | 3,238 |   |   |   | 14,204 |   |   |   | 18,590 |   |
|                                          |   |                          | 300                                |   |   |   | 49,198 |   |   |   | 60,780 |   |   |   | 51,253 |   |   |   | 161,531 |   |
| Mortgage-backed securities issued by:         |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| US Government agencies                        |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,259 |   |
| GSEs                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 24,521 |   |
| Total available-for-sale                      |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 187,311 |   |
|                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity at amortized cost            |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities issued by:         |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GSEs                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 7,128 |   |
| Total held-to-maturity                        |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 7,128 |   |
|                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |  December 31, 2009  |                               |
| Available-for-sale at fair value              |   | Due within one year           |                               | Due after one through five years |   | Due after five through ten years |   | Due after ten years |   | Total |   |
|                                          |   |                          |   (Dollars in thousands)      |   |   |   |   |   |
| Non-mortgage-backed securities issued by GSEs |   | $                             | 1,520                              |   |   | $ | 10,032 |   |   | $ | 32,832 |   |   | $ | 42,579 |   |   | $ | 86,963 |   |
| State, county and municpal issuers            |   |                          | 301                                |   |   |   | 1,000 |   |   |   | 2,656 |   |   |   | 15,613 |   |   |   | 19,570 |   |
|                                          |   |                          | 1,821                              |   |   |   | 11,032 |   |   |   | 35,488 |   |   |   | 58,192 |   |   |   | 106,533 |   |
| Mortgage-backed securities issued by:         |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| US Government agencies                        |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,475 |   |
| GSEs                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 33,702 |   |
| Total available-for-sale                      |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 141,710 |   |
|                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity at amortized cost            |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities issued by:         |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GSEs                                          |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 9,024 |   |
| Total held-to-maturity                        |   |                          |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 9,024 |   |

----

|                                                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |
|-------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|--------|------------------------------|--------|---------------------|-------------|--------|-----------------|--------|---------------------|--------|--------|-----------------|--------|--------|--------|
|                                                                                |   | September 30, 2010                                             |   |
|                                                                                |   | Continuously in Unrealized Loss Position for a Period of  |   |
|                                                                                |   | Less than 12 Months                                            |   |   | 12 Months or more            |   |                | Total  |   |
|                                                                                |   | EstimatedFair Value                                            |   |   | Unrealized Loss              |   | EstimatedFair Value |        |   | Unrealized Loss |   | EstimatedFair Value |   |   | Unrealized Loss |   |
|                                                                                |   |                                                           |   |   |  (Dollars in thousands) |   |                |        |   |            |   |                |
| Available-for-sale                                                                  |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |
|     US Government agencies                                           |   | $                                                              | -      |   |                         | $      | -                   |        |   | $               | -      |                |   | $      | -               |   |   | $      | - |   |   | $ | - |   |
|     Government-sponsored                                             |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|       enterprises (GSEs)                                   |   |                                                           | 997    |   |                         |   | 3                   |        |   |            | -      |                |   |   | -               |   |   |   | 997 |   |   |   | 3 |   |
|     Mortgage-backed securities                                       |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|       issued by GSEs                                       |   |                                                           | -      |   |                         |   | -                   |        |   |            | -      |                |   |   | -               |   |   |   | - |   |   |   | - |   |
|     State, county and                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|       municipal securities                                 |   |                                                           | 162    |   |                         |   | -                   |        |   |            | 485    |                |   |   | 25              |   |   |   | 647 |   |   |   | 25 |   |
|              Total |   | $                                                              | 1,159  |   |                         | $      | 3                   |        |   | $               | 485    |                |   | $      | 25              |   |   | $      | 1,644 |   |   | $ | 28 |   |
|                                                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
| Held-to-maturity                                                                    |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|     GSEs                                                             |   | $                                                              | -      |   |                         | $      | -                   |        |   | $               | -      |                |   | $      | -               |   |   | $      | - |   |   | $ | - |   |
|              Total |   | $                                                              | -      |   |                         | $      | -                   |        |   | $               | -      |                |   | $      | -               |   |   | $      | - |   |   | $ | - |   |
|                                                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|                                                                                |   | December 31, 2009                                              |   |
|                                                                                |   | Continuously in Unrealized Loss Position for a Period of  |   |
|                                                                                |   | Less than 12 Months                                            |   |   | 12 Months or more            |   |                | Total  |   |
|                                                                                |   | EstimatedFair Value                                            |   |   | Unrealized Loss              |   | EstimatedFair Value |        |   | Unrealized Loss |   | EstimatedFair Value |   |   | Unrealized Loss |   |
|                                                                                |   |                                                           |   |   | (Dollars in thousands)       |   |                |        |   |            |   |                |   |   |
| Available-for-sale                                                                  |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|     GSEs                                                             |   | $                                                              | 40,430 |   |                         | $      | 823                 |        |   | $               | -      |                |   | $      | -               |   |   | $      | 40,430 |   |   | $ | 823 |   |
|     Mortgage-backed securities                                       |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|       issued by GSEs                                       |   |                                                           | 2,811  |   |                         |   | 10                  |        |   |            | -      |                |   |   | -               |   |   |   | 2,811 |   |   |   | 10 |   |
|     State, county and                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|       municipal securities                                 |   |                                                           | 6,220  |   |                         |   | 188                 |        |   |            | -      |                |   |   | -               |   |   |   | 6,220 |   |   |   | 188 |   |
|             Total       |   | $                                                              | 49,461 |   |                         | $      | 1,021               |        |   | $               | -      |                |   | $      | -               |   |   | $      | 49,461 |   |   | $ | 1,021 |   |
|                                                                                |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
| Held-to-maturity                                                                    |   |                                                           |   |   |                         |   |                |        |   |            |   |                |   |   |            |   |   |   |   |   |   |   |   |   |
|     GSEs                                                             |   | $                                                              | -      |   |                         | $      | -                   |        |   | $               | -      |                |   | $      | -               |   |   | $      | - |   |   | $ | - |   |
|                                                                                |   | $                                                              | -      |   |                         | $      | -                   |        |   | $               | -      |                |   | $      | -               |   |   | $      | - |   |   | $ | - |   |

----

----

|                                                                                                           |   | Period Ended September 30,                             |      |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|-----------|
|                                                                                                           |   | Three Months                                      |      |   | Nine Months  |   |
|                                                                                                           |   | 2010                                                   |      |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                                                                                           |   | (Dollars in thousands, except per share amounts)  |      |
|                                                                                                           |   |                                                   |      |   |   |   |   |   |   |   |   |   |
| Net income per common share, basic                                                                             |   |                                                   |      |   |   |   |   |   |   |   |   |   |
|   Numerator - net income available to                                                                     |   |                                                   |      |   |   |   |   |   |   |   |   |   |
|       common shareholders                                                             |   | $                                                      | 347       |   |   | $ | 320 |   |   | $ | 854 |   |   | $ | 1,223 |   |
|   Denominator                                                                                             |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Weighted average common shares                                                                          |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       issued and outstanding                                                          |   |                                                   | 3,784,159 |   |   |   | 3,790,302 |   |   |   | 3,783,872 |   |   |   | 3,781,591 |   |
|                                                                                                           |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net income per share, basic                                                                        |   | $                                                      | .09       |   |   | $ | .08 |   |   | $ | .23 |   |   | $ | .32 |   |
|                                                                                                           |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per common share, assuming dilution                                                                 |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Numerator - net income available to                                                                     |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       common shareholders                                                             |   | $                                                      | 347       |   |   | $ | 320 |   |   | $ | 854 |   |   | $ | 1,223 |   |
|   Denominator                                                                                             |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Weighted average common shares                                                                          |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         issued and outstanding                                              |   |                                                   | 3,784,159 |   |   |   | 3,790,302 |   |   |   | 3,783,872 |   |   |   | 3,781,591 |   |
|      Effect of dilutive stock options                                                           |   |                                                   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 Total common shares |   |                                                   | 3,784,159 |   |   |   | 3,790,302 |   |   |   | 3,783,872 |   |   |   | 3,781,591 |   |
|       Net income per common share,                                                    |   |                                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            assuming dilution                                      |   | $                                                      | .09       |   |   | $ | .08 |   |   | $ | .23 |   |   | $ | .32 |   |

----

|                                                               |   |               |    |   | Fair Value Measurement at Reporting Date Using |
|--------------------------------------------------------------------|--------|--------------------|---------|--------|------------------------------------------------|
|                                                               |   |               |    |   | Quoted Prices                                  |   |   |   |   |   |   |   |
|                                                               |   |               |    |   | in Active                                      |   |   | Significant |   |   |   |   |
|                                                               |   |               |    |   | Markets for                                    |   |   | Other |   |   | Significant |   |
|                                                               |   |               |    |   | Identical                                      |   |   | Observable |   |   | Unobservable |   |
|                                                               |   |               |    |   | Assets                                         |   |   | Inputs |   |   | Inputs |   |
| Description                                                        |   | September 30, 2010 |    |   | (Level 1)                                      |   |   | (Level 2) |   |   | (Level 3) |   |
|                                                               |   |               |    |   | (Dollars in thousands)                         |   |   |   |   |
| Securities available-for-sale                                      |   |               |    |   |                                           |   |   |   |   |   |   |   |
| Mortgage-backed securities                                         |   |               |    |   |                                           |   |   |   |   |   |   |   |
|     issued by US Government                         |   |               |    |   |                                           |   |   |   |   |   |   |   |
|     agencies                                        |   | $                  | 1,259   |   |                                           | $ | - |   |   | $ | 1,259 |   |   | $ | - |   |
| Government sponsored                                               |   |               |    |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|     enterprises (GSEs)                              |   |               | 142,941 |   |                                           |   | - |   |   |   | 142,941 |   |   |   | - |   |
| Mortgage-backed securities                                         |   |               |    |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|     issued by GSEs                                  |   |               | 24,521  |   |                                           |   | - |   |   |   | 24,521 |   |   |   | - |   |
| State, county and municipal                                        |   |               | 18,590  |   |                                           |   | - |   |   |   | 18,590 |   |   |   | - |   |
|       Total securities available-for-sale |   | $                  | 187,311 |   |                                           | $ | - |   |   | $ | 187,311 |   |   | $ | - |   |
|                                                               |   |               |    |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |   |               |    |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |   |               |    |   |                                           | Fair Value Measurement at Reporting Date Using  |
|                                                               |   |               |    |   |                                           | Quoted Prices |   |   |   |   |   |   |   |   |   |
|                                                               |   |               |    |   |                                           | in Active |   |   | Significant |   |   |   |   |   |
|                                                               |   |               |    |   |                                           | Markets for |   |   | Other |   |   | Significant |   |
|                                                               |   |               |    |   |                                           | Identical |   |   | Observable |   |   | Unobservable |   |
|                                                               |   |               |    |   |                                           | Assets |   |   | Inputs |   |   | Inputs |   |
| Description                                                        |   | December 31, 2009  |    |   | (Level 1)                                      |   |   | (Level 2) |   |   | (Level 3) |   |
|                                                               |   |               |    |   |                                           | (Dollars in thousands) |   |   |   |   |   |
| Securities available-for-sale                                      |   | $                  | 141,710 |   |                                           | $ | - |   |   | $ | 141,710 |   |   | $ | - |   |

----

|                                                                       |   |               |   |   | Fair Value Measurement at Reporting Date Using |                                           |
|----------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------------------------------------|------------------------------------------------|
|                                                                       |   |               |   |   | Quoted Prices                                  |                                           |   |   |   |   |   |
|                                                                       |   |               |   |   | in Active                                      |                                           |   | Significant |   |   |   |   |
|                                                                       |   |               |   |   | Markets for                                    |                                           |   | Other |   |   | Significant |   |
|                                                                       |   |               |   |   | Identical                                      |                                           |   | Observable |   |   | Unobservable |   |
|                                                                       |   |               |   |   | Assets                                         |                                           |   | Inputs |   |   | Inputs |   |
| Description                                                                |   | September 30, 2010 |   |   | (Level 1)                                      |                                           |   | (Level 2) |   |   | (Level 3) |   |
|                                                                       |   |               |   |   | (Dollars in thousands)                         |                                           |   |   |   |
| Collateral-dependent                                                       |   |               |   |   |                                           |                                           |   |   |   |   |
|     impaired loans                                     |   | $                  | 8,402  |   |                                           | $                                              | - |   |   | $ | 8,402 |   |   | $ | - |   |
|                                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |   |   |   |
| Gains and (losses) recognized during the periods ended September 30, 2010: |   |
|                                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           | Three months                                   |   | Nine Months |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           | (Dollars in thousands)                         |   |   |   |   |   |
| Collateral-dependent impaired loans                                        |   |               | $      | (127   | )                                         |                                           | $ | (961 | )  |   |   |   |   |
|                                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           | Fair Value Measurement at Reporting Date Using |   |
|                                                                       |   |               |   |   |                                           | Quoted Prices                                  |   |   |   |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           | in Active                                      |   |   | Significant |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           | Markets for                                    |   |   | Other |   |   | Significant |   |
|                                                                       |   |               |   |   |                                           | Identical                                      |   |   | Observable |   |   | Unobservable |   |
|                                                                       |   |               |   |   |                                           | Assets                                         |   |   | Inputs |   |   | Inputs |   |
| Description                                                                |   | December 31, 2009  |   |   | (Level 1)                                      |                                           |   | (Level 2) |   |   | (Level 3) |   |
|                                                                       |   |               |   |   |                                           | (Dollars in thousands)                         |   |   |   |   |   |
| Collateral-dependent                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |
|     impaired loans                                     |   | $                  | 11,219 |   |                                           | $                                              | - |   |   | $ | 11,219 |   |   | $ | - |   |
| Foreclosed assets                                                          |   |               | 6,078  |   |                                           |                                           | - |   |   |   | 6,078 |   |   |   | - |   |
|                                                                       |   |               |   |   |                                           |                                           |   |   |   |   |   |   |   |   |   |   |
| Gains and (losses) recognized during the twelve months ended:              |   |               |   |   |                                           |
|                                                                       |   |               |   |   |                                           | December 31, 2009                              |   |   |   |   |   |
|                                                                       |   |               |   |   |                                           | (Dollars in thousands)                         |   |   |   |   |   |
| Collateral-dependent impaired loans                                        |   |               | $      | -      |                                           |                                           |   |   |   |   |   |   |   |
| Foreclosed assets                                                          |   |               |   | -      |                                           |                                           |   |   |   |   |   |   |   |

----

|                                            |   | September 30, 2010            |    |   | December 31, 2009  |   |
|-------------------------------------------------|--------|------------------------------------|---------|--------|-------------------------|--------|
|                                            |   | Carrying                           |    |   | Estimated               |   |   | Carrying |   |   | Estimated |   |
|                                            |   | Amount                             |    |   | Fair Value              |   |   | Amount |   |   | Fair Value |   |
|                                            |   | (Dollars in thousands)   |    |
| Financial assets                                |   |                               |    |   |                    |   |   |   |   |   |   |   |
|   Cash and due from banks                  |   | $                                  | 1,801   |   |                    | $      | 1,801 |   |   | $ | 1,463 |   |   | $ | 1,463 |   |
|   Interest bearing deposits due from banks |   |                               | 30,193  |   |                    |   | 30,193 |   |   |   | 46,020 |   |   |   | 46,020 |   |
|   Securities available-for-sale            |   |                               | 187,311 |   |                    |   | 187,311 |   |   |   | 141,710 |   |   |   | 141,710 |   |
|   Securities held-to-maturity              |   |                               | 7,128   |   |                    |   | 7,614 |   |   |   | 9,024 |   |   |   | 9,476 |   |
|   Federal Home Loan Bank stock             |   |                               | 1,213   |   |                    |   | 1,213 |   |   |   | 1,307 |   |   |   | 1,307 |   |
|   Loans, net                               |   |                               | 255,568 |   |                    |   | 256,072 |   |   |   | 261,196 |   |   |   | 262,308 |   |
|   Accrued interest receivable              |   |                               | 3,195   |   |                    |   | 3,195 |   |   |   | 2,424 |   |   |   | 2,424 |   |
| Financial liabilities                           |   |                               |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Deposits                                 |   |                               | 458,378 |   |                    |   | 460,419 |   |   |   | 436,648 |   |   |   | 436,444 |   |
|   Accrued interest payable                 |   |                               | 2,436   |   |                    |   | 2,436 |   |   |   | 2,043 |   |   |   | 2,043 |   |
|   Long-term debt                           |   |                               | 6,500   |   |                    |   | 6,529 |   |   |   | 8,000 |   |   |   | 8,005 |   |

----

|                                         |   | September 30, 2010  |   |   | December 31, 2009  |   |
|----------------------------------------------|--------|--------------------------|--------|--------|-------------------------|--------|
|                                         |   | Notional/                |   |   | Estimated               |   |   | Notional/ |   |   | Estimated |   |
|                                         |   | Contract                 |   |   | Fair                    |   |   | Contract |   |   | Fair |   |
|                                         |   | Amount                   |   |   | Value                   |   |   | Amount |   |   | Value |   |
|                                         |   | (Dollars in thousands)   |   |   |                    |   |   |   |   |
| Off-balance sheet commitments                |   |                     |   |   |                    |   |   |   |   |   |   |   |
|     Loan commitments          |   | $                        | 29,899 |   |                    | $      | - |   |   | $ | 28,527 |   |   | $ | - |   |
|     Standby letters of credit |   |                     | 846    |   |                    |   | - |   |   |   | 873 |   |   |   | - |   |

----

| ·   | future economic and business conditions; |
|--------------------|------------------------------------------|

| ·   | lack of sustained growth and disruptions in the economies of the Company's market areas; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | government monetary and fiscal policies; |
|--------------------|------------------------------------------|

| ·   | the effects of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the effects of competition from a wide variety of local, regional, national and other providers of financial, investment, and insurance services, as well as competitors that offer banking products and services by mail, telephone, computer and/or the Internet; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | credit risks; |
|--------------------|---------------|

| ·   | higher than anticipated levels of defaults on loans; |
|--------------------|------------------------------------------------------|

| ·   | perceptions by depositors about the safety of their deposits; |
|--------------------|---------------------------------------------------------------|

| ·   | capital adequacy; |
|--------------------|-------------------|

| ·   | the failure of assumptions underlying the establishment of the allowance for loan losses and other estimates, including the value of collateral securing loans; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | ability to weather the current economic downturn; |
|--------------------|---------------------------------------------------|

| ·   | loss of consumer or investor confidence; |
|--------------------|------------------------------------------|

| ·   | availability of liquidity sources; |
|--------------------|------------------------------------|

| ·   | the risks of opening new offices, including, without limitation, the related costs and time of building customer relationships and integrating operations as part of these endeavors and the failure to achieve expected gains, revenue growth and/or expense savings from such endeavors; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in laws and regulations, including tax, banking and securities laws and regulations; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | changes in the requirements of regulatory authorities; |
|--------------------|--------------------------------------------------------|

| ·   | changes in accounting policies, rules and practices; |
|--------------------|------------------------------------------------------|

| ·   | cost and difficulty of implementing changes in technology or products; |
|--------------------|------------------------------------------------------------------------|

| ·   | the effects of war or other conflicts, acts of terrorism or other catastrophic events that may affect general economic conditions and economic confidence; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | other factors and information described in this report and in any of  the other reports that we file with the Securities and Exchange Commission under the Securities Exchange Act of 1934. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                     |   | Summary Income Statement     |   |
|------------------------------------------|--------|------------------------------|--------|
|                                     |   | (Dollars in thousands)  |   |
| For the Three Months Ended September 30, |   | 2010                         |   |   | 2009 |   |   | Dollar Change |   |   | Percentage Change |   |
| Interest income                          |   | $                            | 5,543  |   |   | $ | 5,730 |   |   | $ | (187 | ) |   |   | -3.3 | % |
| Interest expense                         |   |                         | 2,179  |   |   |   | 2,706 |   |   |   | (527 | ) |   |   | -19.5 | % |
| Net interest income                      |   |                         | 3,364  |   |   |   | 3,024 |   |   |   | 340 |   |   |   | 11.2 | % |
| Provision for loan losses                |   |                         | 1,025  |   |   |   | 1,010 |   |   |   | 15 |   |   |   | 1.5 | % |
| Noninterest income                       |   |                         | 668    |   |   |   | 704 |   |   |   | (36 | ) |   |   | -5.1 | % |
| Noninterest expenses                     |   |                         | 2,490  |   |   |   | 2,297 |   |   |   | 193 |   |   |   | 8.4 | % |
| Income tax expense                       |   |                         | 131    |   |   |   | 101 |   |   |   | 30 |   |   |   | 29.7 | % |
| Net income                               |   | $                            | 386    |   |   | $ | 320 |   |   | $ | 66 |   |   |   | 20.6 | % |

|                                    |   | Summary Income Statement     |   |
|-----------------------------------------|--------|------------------------------|--------|
|                                    |   | (Dollars in thousands)  |   |
| For the Nine Months Ended September 30, |   | 2010                         |   |   | 2009 |   |   | Dollar Change |   |   | Percentage Change |   |
| Interest income                         |   | $                            | 16,685 |   |   | $ | 17,374 |   |   | $ | (689 | ) |   |   | -4.0 | % |
| Interest expense                        |   |                         | 6,662  |   |   |   | 8,544 |   |   |   | (1,882 | ) |   |   | -22.0 | % |
| Net interest income                     |   |                         | 10,023 |   |   |   | 8,830 |   |   |   | 1,193 |   |   |   | 13.5 | % |
| Provision for loan losses               |   |                         | 3,275  |   |   |   | 2,460 |   |   |   | 815 |   |   |   | 33.1 | % |
| Noninterest income                      |   |                         | 1,896  |   |   |   | 2,027 |   |   |   | (131 | ) |   |   | -6.5 | % |
| Noninterest expenses                    |   |                         | 7,438  |   |   |   | 6,820 |   |   |   | 618 |   |   |   | 9.1 | % |
| Income tax expense                      |   |                         | 214    |   |   |   | 354 |   |   |   | (140 | ) |   |   | -39.5 | % |
| Net income                              |   | $                            | 992    |   |   | $ | 1,223 |   |   | $ | (231 | ) |   |   | -18.9 | % |

----

----

|                                                                                                                        |   |  Average Balances, Yields and Rates |    |
|-----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                                                        |   | Three Months Ended September 30,         |    |
|                                                                                                                        |   | 2010                                     |    |   | 2009 |   |
|                                                                                                                        |   |                                     |    |   | Interest |   |   |   |   |   |   |   |   |  Interest |   |   |   |   |
|                                                                                                                        |   | Average                                  |    |   | Income/ |   |   | Yields/  |   |   | Average |   |   | Income/ |   |   | Yields/   |   |
|                                                                                                                        |   | Balances                                 |    |   | Expense |   |   | Rates (1) |   |   | Balances |   |   | Expense |   |   | Rates (1) |   |
|                                                                                                                        |   | (Dollars in thousands)         |    |
| Assets                                                                                                                      |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing balances due from banks                                                                                    |   | $                                        | 41,788  |   |   | $ | 28 |   |   |   | 0.27 | % |   | $ | 22,205 |   |   | $ | 14 |   |   |   | 0.25 | % |
| Securities                                                                                                                  |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                     |   |                                     | 168,778 |   |   |   | 1,258 |   |   |   | 2.96 | % |   |   | 133,282 |   |   |   | 1,298 |   |   |   | 3.86 | % |
| Tax exempt (2)                                                                                                              |   |                                     | 18,516  |   |   |   | 188 |   |   |   | 4.03 | % |   |   | 19,780 |   |   |   | 201 |   |   |   | 4.03 | % |
| Total investment securities                                                                                                 |   |                                     | 187,294 |   |   |   | 1,446 |   |   |   | 3.06 | % |   |   | 153,062 |   |   |   | 1,499 |   |   |   | 3.89 | % |
| Other investments                                                                                                           |   |                                     | 1,244   |   |   |   | 1 |   |   |   | 0.32 | % |   |   | 1,307 |   |   |   | 3 |   |   |   | 0.91 | % |
| Federal funds sold                                                                                                          |   |                                     | -       |   |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Loans (2) (3) (4)                                                                                                           |   |                                     | 263,210 |   |   |   | 4,068 |   |   |   | 6.13 | % |   |   | 271,751 |   |   |   | 4,214 |   |   |   | 6.15 | % |
| Total interest earning assets                                                                                               |   |                                     | 493,536 |   |   |   | 5,543 |   |   |   | 4.46 | % |   |   | 448,325 |   |   |   | 5,730 |   |   |   | 5.07 | % |
| Cash and due from banks                                                                                                     |   |                                     | 1,930   |   |   |   |   |   |   |   |   |   |   |   | 5,249 |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses                                                                                                   |   |                                     | (6,562  | ) |   |   |   |   |   |   |   |   |   |   | (5,373 | ) |   |   |   |   |   |   |   |   |
| Valuation allowance - Available-for-                                                                                        |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| sale securities                                                                                                             |   |                                     | 3,481   |   |   |   |   |   |   |   |   |   |   |   | 828 |   |   |   |   |   |   |   |   |   |
| Premises and equipment                                                                                                      |   |                                     | 8,443   |   |   |   |   |   |   |   |   |   |   |   | 8,565 |   |   |   |   |   |   |   |   |   |
| Other assets                                                                                                                |   |                                     | 24,717  |   |   |   |   |   |   |   |   |   |   |   | 18,715 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                                                                |   | $                                        | 525,545 |   |   |   |   |   |   |   |   |   |   | $ | 476,309 |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity                                                                                        |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                                                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing transaction accounts                                                                                       |   | $                                        | 56,690  |   |   | $ | 77 |   |   |   | 0.54 | % |   | $ | 52,724 |   |   | $ | 93 |   |   |   | 0.70 | % |
| Savings                                                                                                                     |   |                                     | 20,578  |   |   |   | 22 |   |   |   | 0.42 | % |   |   | 17,663 |   |   |   | 20 |   |   |   | 0.45 | % |
| Time deposits $100M and over                                                                                                |   |                                     | 152,126 |   |   |   | 806 |   |   |   | 2.10 | % |   |   | 131,673 |   |   |   | 904 |   |   |   | 2.72 | % |
| Other time deposits                                                                                                         |   |                                     | 193,587 |   |   |   | 1,204 |   |   |   | 2.47 | % |   |   | 173,608 |   |   |   | 1,596 |   |   |   | 3.65 | % |
|     Total interest bearing                                                                              |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       deposits                                                                                |   |                                     | 422,981 |   |   |   | 2,109 |   |   |   | 1.98 | % |   |   | 375,668 |   |   |   | 2,613 |   |   |   | 2.76 | % |
| Short-term borrowings                                                                                                       |   |                                     | -       |   |   |   | - |   |   |   | 0.00 | % |   |   | 19 |   |   |   | - |   |   |   | 0.00 | % |
|  Long-term debt                                                                                                        |   |                                     | 6,500   |   |   |   | 70 |   |   |   | 4.27 | % |   |   | 9,500 |   |   |   | 93 |   |   |   | 3.88 | % |
|     Total interest bearing                                                                              |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       liabilities                                                                             |   |                                     | 429,481 |   |   |   | 2,179 |   |   |   | 2.01 | % |   |   | 385,187 |   |   |   | 2,706 |   |   |   | 2.79 | % |
| Noninterest bearing demand deposits                                                                                         |   |                                     | 43,418  |   |   |   |   |   |   |   |   |   |   |   | 43,500 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                                           |   |                                     | 3,192   |   |   |   |   |   |   |   |   |   |   |   | 6,119 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                                                        |   |                                     | 49,454  |   |   |   |   |   |   |   |   |   |   |   | 41,503 |   |   |   |   |   |   |   |   |   |
|     Total liabilities and shareholders'                                                                 |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     equity                                                                                              |   | $                                        | 525,545 |   |   |   |   |   |   |   |   |   |   | $ | 476,309 |   |   |   |   |   |   |   |   |   |
| Interest rate spread                                                                                                        |   |                                     |    |   |   |   |   |   |   |   | 2.45 | % |   |   |   |   |   |   |   |   |   |   | 2.28 | % |
| Net interest income and net yield                                                                                           |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on earning assets                                                                                                           |   |                                     |    |   |   | $ | 3,364 |   |   |   | 2.70 | % |   |   |   |   |   | $ | 3,024 |   |   |   | 2.68 | % |
| Interest free funds supporting earning                                                                                      |   |                                     |    |   |   |   |   |   |   |   |   |   |   |
| assets                                                                                                                      |   | $                                        | 64,055  |   |   |   |   |   |   |   |   |   |   | $ | 63,138 |   |   |   |   |   |   |   |   |   |
| _________________________________________                                                                                   |   |                                     |    |   |   |   |   |   |   |
| (1) Yields and rates are annualized.                                                                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (2) Yields on tax exempt instruments have not been adjusted to a tax-equivalent basis.                                 |   |
| (3) Nonaccrual loans are included in the average loan balances and income on such loans is recognized on a cash basis. |   |
| (4) Includes immaterial amounts of loan fees.                                                                          |   |                                     |    |   |   |   |   |   |   |

----

----

|                                                                                                                        |   | Average Balances, Yields and Rates |    |
|-----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|
|                                                                                                                        |   | Nine Months Ended September 30,    |    |
|                                                                                                                        |   | 2010                               |    |   | 2009 |   |
|                                                                                                                        |   |                               |    |   |  Interest |   |   |   |   |   |   |   |   |  Interest |   |   |   |   |
|                                                                                                                        |   | Average                            |    |   | Income/ |   |   | Yields/  |   |   | Average |   |   | Income/ |   |   | Yields/  |   |
|                                                                                                                        |   | Balances                           |    |   | Expense |   |   | Rates (1) |   |   | Balances |   |   | Expense |   |   | Rates (1) |   |
|                                                                                                                        |   | (Dollars in thousands)        |    |
| Assets                                                                                                                      |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing balances due from banks                                                                                    |   | $                                  | 54,473  |   |   | $ | 98 |   |   |   | 0.24 | % |   | $ | 19,291 |   |   | $ | 36 |   |   |   | 0.25 | % |
| Securities                                                                                                                  |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                     |   |                               | 156,916 |   |   |   | 3,875 |   |   |   | 3.30 | % |   |   | 137,055 |   |   |   | 4,260 |   |   |   | 4.16 | % |
| Tax exempt (2)                                                                                                              |   |                               | 19,133  |   |   |   | 584 |   |   |   | 4.08 | % |   |   | 20,043 |   |   |   | 612 |   |   |   | 4.08 | % |
| Total investment securities                                                                                                 |   |                               | 176,049 |   |   |   | 4,459 |   |   |   | 3.39 | % |   |   | 157,098 |   |   |   | 4,872 |   |   |   | 4.15 | % |
| Other investments                                                                                                           |   |                               | 1,285   |   |   |   | 3 |   |   |   | 0.31 | % |   |   | 1,283 |   |   |   | 3 |   |   |   | 0.31 | % |
| Federal funds sold                                                                                                          |   |                               | -       |   |   |   | - |   |   |   | 0.00 | % |   |   | 2,649 |   |   |   | 3 |   |   |   | 0.15 | % |
| Loans (2) (3) (4)                                                                                                           |   |                               | 265,240 |   |   |   | 12,125 |   |   |   | 6.11 | % |   |   | 273,201 |   |   |   | 12,460 |   |   |   | 6.10 | % |
| Total interest earning assets                                                                                               |   |                               | 497,047 |   |   |   | 16,685 |   |   |   | 4.49 | % |   |   | 453,522 |   |   |   | 17,374 |   |   |   | 5.12 | % |
| Cash and due from banks                                                                                                     |   |                               | 1,944   |   |   |   |   |   |   |   |   |   |   |   | 6,953 |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses                                                                                                   |   |                               | (6,271  | ) |   |   |   |   |   |   |   |   |   |   | (5,439 | ) |   |   |   |   |   |   |   |   |
| Valuation allowance - Available-for-                                                                                        |   |                               |    |   |   |   |   |   |   |   |   |   |   |
| sale securities                                                                                                             |   |                               | 2,578   |   |   |   |   |   |   |   |   |   |   |   | 1,178 |   |   |   |   |   |   |   |   |   |
| Premises and equipment                                                                                                      |   |                               | 8,501   |   |   |   |   |   |   |   |   |   |   |   | 8,611 |   |   |   |   |   |   |   |   |   |
| Other assets                                                                                                                |   |                               | 23,495  |   |   |   |   |   |   |   |   |   |   |   | 15,975 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                                                                |   | $                                  | 527,294 |   |   |   |   |   |   |   |   |   |   | $ | 480,800 |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity                                                                                        |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits                                                                                                   |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing transaction accounts                                                                                       |   | $                                  | 55,231  |   |   | $ | 244 |   |   |   | 0.59 | % |   | $ | 55,107 |   |   | $ | 281 |   |   |   | 0.68 | % |
| Savings                                                                                                                     |   |                               | 28,862  |   |   |   | 79 |   |   |   | 0.37 | % |   |   | 22,607 |   |   |   | 63 |   |   |   | 0.37 | % |
| Time deposits $100M and over                                                                                                |   |                               | 148,255 |   |   |   | 2,285 |   |   |   | 2.06 | % |   |   | 131,612 |   |   |   | 2,987 |   |   |   | 3.03 | % |
| Other time deposits                                                                                                         |   |                               | 192,568 |   |   |   | 3,835 |   |   |   | 2.66 | % |   |   | 171,169 |   |   |   | 4,938 |   |   |   | 3.86 | % |
|     Total interest bearing                                                                              |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           deposits                                                             |   |                               | 424,916 |   |   |   | 6,443 |   |   |   | 2.03 | % |   |   | 380,495 |   |   |   | 8,269 |   |   |   | 2.91 | % |
| Short-term borrowings                                                                                                       |   |                               | -       |   |   |   | - |   |   |   | 0.00 | % |   |   | 14 |   |   |   | - |   |   |   | 0.00 | % |
| Long-term debt                                                                                                              |   |                               | 7,451   |   |   |   | 219 |   |   |   | 3.93 | % |   |   | 9,500 |   |   |   | 275 |   |   |   | 3.87 | % |
|     Total interest bearing                                                                              |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           liabilities                                                     |   |                               | 432,367 |   |   |   | 6,662 |   |   |   | 2.06 | % |   |   | 390,009 |   |   |   | 8,544 |   |   |   | 2.93 | % |
| Noninterest bearing demand deposits                                                                                         |   |                               | 44,258  |   |   |   |   |   |   |   |   |   |   |   | 44,567 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                                           |   |                               | 3,654   |   |   |   |   |   |   |   |   |   |   |   | 4,998 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                                                                        |   |                               | 47,015  |   |   |   |   |   |   |   |   |   |   |   | 41,226 |   |   |   |   |   |   |   |   |   |
|    Total liabilities and shareholders'                                                                       |   |                               |    |   |   |   |   |   |   |   |   |   |   |
|          equity                                                                     |   | $                                  | 527,294 |   |   |   |   |   |   |   |   |   |   | $ | 480,800 |   |   |   |   |   |   |   |   |   |
| Interest rate spread                                                                                                        |   |                               |    |   |   |   |   |   |   |   | 2.43 | % |   |   |   |   |   |   |   |   |   |   | 2.19 | % |
| Net interest income and net yield                                                                                           |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on earning assets                                                                                                           |   |                               |    |   |   | $ | 10,023 |   |   |   | 2.70 | % |   |   |   |   |   | $ | 8,830 |   |   |   | 2.60 | % |
| Interest free funds supporting earning                                                                                      |   |                               |    |   |   |   |   |   |   |   |   |   |   |
| assets                                                                                                                      |   | $                                  | 64,680  |   |   |   |   |   |   |   |   |   |   | $ | 63,513 |   |   |   |   |   |   |   |   |   |
| _________________________________________                                                                                   |   |                               |    |   |   |   |   |   |   |
| (1) Yields and rates are annualized.                                                                                   |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (2) Yields on tax exempt instruments have not been adjusted to a tax-equivalent basis.                                 |   |
| (3) Nonaccrual loans are included in the average loan balances and income on such loans is recognized on a cash basis. |   |
| (4) Includes immaterial amounts of loan fees.                                                                          |   |                               |    |   |   |   |   |   |   |

----

|                                           |   | Nine Months EndedSeptember 30, 2010 |    |   | Year Ended December 31, 2009 |   |    | Nine Months EndedSeptember 30, 2009 |   |
|------------------------------------------------|--------|-------------------------------------|---------|--------|------------------------------|--------|---------|-------------------------------------|--------|
|                                           |   | (Dollars in thousands)         |    |
| Allowance at beginning of period               |   | $                                   | 6,052   |   |                         | $      | 5,475   |                                |   | $ | 5,475 |   |
| Provision for loan losses                      |   |                                | 3,275   |   |                         |   | 4,355   |                                |   |   | 2,460 |   |
| Net charge-offs                                |   |                                | (2,991  | )      |                         |   | (3,778  | )                                   |   |   | (2,527 | ) |
| Allowance at end of period                     |   | $                                   | 6,336   |   |                         | $      | 6,052   |                                |   | $ | 5,408 |   |
| Allowance as a percentage of loans outstanding |   |                                |    |   |                         |   |    |                                |   |   |   |   |
|     at period end               |   |                                | 2.42    | %      |                         |   | 2.26    | %                                   |   |   | 2.01 | % |
| Loans at end of period                         |   | $                                   | 261,904 |   |                         | $      | 267,248 |                                |   | $ | 269,725 |   |

----

|               |   | Nonaccrual Loans             |   |   | 90 Days or More Past Due and Still Accruing |   |   | Total Nonperforming Loans |   |   | Percentage of Total Loans |   |   | Potential Problem Loans |   |   | Percentage of Total Loans |   |
|--------------------|--------|------------------------------|--------|--------|---------------------------------------------|--------|--------|---------------------------|--------|--------|---------------------------|--------|--------|-------------------------|--------|--------|---------------------------|--------|
|               |   | (Dollars in thousands)  |   |
| January 1, 2009    |   | $                            | 11,799 |   |                                        | $      | -      |                      |   | $      | 11,799                    |   |   |                    | 4.36   | %      |                      | $      | 6,910 |   |   |   | 2.56 | % |
| Net change         |   |                         | 2,835  |   |                                        |   | -      |                      |   |   | 2,835                     |   |   |                    |   |   |                      |   | 2,367 |   |   |   |   |   |
| March 31, 2009     |   |                         | 14,634 |   |                                        |   | -      |                      |   |   | 14,634                    |   |   |                    | 5.31   | %      |                      |   | 9,277 |   |   |   | 3.37 | % |
| Net change         |   |                         | 2,882  |   |                                        |   | -      |                      |   |   | 2,882                     |   |   |                    |   |   |                      |   | (1,511 | ) |   |   |   |   |
| June 30, 2009      |   |                         | 17,516 |   |                                        |   | -      |                      |   |   | 17,516                    |   |   |                    | 6.41   | %      |                      |   | 7,766 |   |   |   | 2.84 | % |
| Net change         |   |                         | (2,632 | )      |                                        |   | -      |                      |   |   | (2,632                    | )      |   |                    |   |   |                      |   | 3,490 |   |   |   |   |   |
| September 30, 2009 |   |                         | 14,884 |   |                                        |   | -      |                      |   |   | 14,884                    |   |   |                    | 5.52   | %      |                      |   | 11,256 |   |   |   | 4.17 | % |
| Net change         |   |                         | (1,014 | )      |                                        |   | -      |                      |   |   | (1,014                    | )      |   |                    |   |   |                      |   | (3,951 | ) |   |   |   |   |
| December 31, 2009  |   |                         | 13,870 |   |                                        |   | -      |                      |   |   | 13,870                    |   |   |                    | 5.19   | %      |                      |   | 7,305 |   |   |   | 2.73 | % |
| Net change         |   |                         | 2,575  |   |                                        |   | -      |                      |   |   | 2,575                     |   |   |                    |   |   |                      |   | (3,844 | ) |   |   |   |   |
| March 31, 2010     |   |                         | 16,445 |   |                                        |   | -      |                      |   |   | 16,445                    |   |   |                    | 6.15   | %      |                      |   | 3,461 |   |   |   | 1.29 | % |
| Net change         |   |                         | (603   | )      |                                        |   | -      |                      |   |   | (603                      | )      |   |                    |   |   |                      |   | (403 | ) |   |   |   |   |
| June 30, 2010      |   |                         | 15,842 |   |                                        |   | -      |                      |   |   | 15,842                    |   |   |                    | 5.97   | %      |                      |   | 3,058 |   |   |   | 1.15 | % |
| Net change         |   |                         | (880   | )      |                                        |   | -      |                      |   |   | (880                      | )      |   |                    |   |   |                      |   | 2,195 |   |   |   |   |   |
| September 30, 2010 |   | $                            | 14,962 |   |                                        | $      | -      |                      |   | $      | 14,962                    |   |   |                    | 5.71   | %      |                      | $      | 5,253 |   |   |   | 2.01 | % |

----

----

|                                   |        |   |        |   | Total       |     |
|----------------------------------------|-------------|--------|-------------|--------|-------------|----------|
|                                   |        |   | Tier 1      |   | Capital     | Leverage |
| Community First Bancorporation         |        | 14.4%  |        | 15.6%  | 8.7%        |
| Community First Bank                   |        |   | 12.9%       |   | 14.2%       | 7.7%     |
| Minimum "well-capitalized" requirement |   6.0% |   | 10.0%       | 6.0%   |
| Minimum requirement                    |        |   |   4.0% |   |   8.0% | 5.0%     |

|                      |   | September 30, 2010     |   |
|---------------------------|--------|------------------------|--------|
|                      |   | (Dollars in thousands) |   |
| Loan commitments          |   | $                      | 29,899 |   |
| Standby letters of credit |   |                   | 846    |   |

----

| Exhibits | 31.  Rule 13a-14(a)/15d-14(a) Certifications |
|----------|--------------------------------------------------------|

----

|              |   | COMMUNITY FIRST BANCORPORATION                          |
|-------------------|--------|---------------------------------------------------------|
|              |   |                                                    |
| November 15, 2010 |   |    /s/ Frederick D. Shepherd, Jr.        |
| Date              |   | Frederick D. Shepherd, Jr., Chief Executive Officer and |
|              |   | Chief Financial Officer                                 |

----