December 31,

December 31,

Assets

2010

2009

Cash and due from banks

$

40,376,267

$

36,942,636

Short term investments

196,159

101,029

Total cash and cash equivalents

40,572,426

37,043,665

Investment securities:

Investment securities available for sale, at fair value

27,269,670

22,705,612

FHLBI and FRB stock, at cost

901,350

994,950

Total investment securities

28,171,020

23,700,562

Loans held for investment:

Commercial

203,025,518

235,937,243

Consumer

16,641,544

18,777,849

Real estate mortgage

16,271,284

19,330,658

Total loans held for investment

235,938,346

274,045,750

Less allowance for loan losses

(13,970,170

)

(18,665,173

)

Net loans held for investment

221,968,176

255,380,577

Premises and equipment, net

7,692,185

8,091,463

Other real estate owned, held for sale

4,294,212

3,777,119

Facilities held for sale, net

-

60,453

Accrued interest and other assets

2,642,511

4,336,526

Total assets

$

305,340,530

$

332,390,365

Liabilities and Shareholders' Equity

Liabilities

Deposits:

Demand (non-interest bearing)

$

62,294,189

$

65,643,739

NOW

52,018,941

50,642,881

Savings and money market

75,226,475

72,297,919

Time deposits

100,382,011

121,200,201

Brokered certificates of deposit

3,358,573

5,410,951

Total deposits

293,280,189

315,195,691

Other borrowings

-

413,970

Accrued interest, taxes, and other liabilities

1,926,543

2,404,440

Total liabilities

295,206,732

318,014,101

Shareholders' Equity

Preferred stock, no par value.  Authorized 30,000 shares; no shares

issued and outstanding

-

-

Common stock, no par value. Authorized 7,000,000 shares at December 31, 2010

and December 31, 2009; 3,165,392 shares issued and outstanding at December 31,

2010 and 3,149,850 shares issued and outstanding at December 31, 2009

6,935,140

6,738,128

Retained earnings

2,747,615

6,641,060

Deferred directors' compensation

708,372

885,919

Accumulated other comprehensive income

(257,329

)

111,157

Total shareholders' equity

10,133,798

14,376,264

Total liabilities and shareholders' equity

$

305,340,530

$

332,390,365

Three months ended Dec 31

Twelve months ended Dec 31

2010

2009

2010

2009

Interest and dividend income:

Interest and fees on loans

$

3,196,703

$

3,615,742

$

13,153,069

$

16,009,172

Interest and dividends on investment securities:

U.S. Treasury, agency securities and CMOs

180,229

232,264

770,493

1,205,935

Obligations of states and political subdivisions

71,363

81,360

282,384

446,827

Other securities

6,120

6,120

20,484

29,984

Interest on certificates of deposit

-

16,269

-

162,812

Interest on short term investments

163

416

487

14,813

Total interest and dividend income

3,454,578

3,952,171

14,226,917

17,869,543

Interest expense:

Interest on deposits

513,216

880,831

2,494,914

4,566,956

Interest on other borrowings

-

7,713

1,174

65,399

Total interest expense

513,216

888,544

2,496,088

4,632,355

Net interest income

2,941,362

3,063,627

11,730,829

13,237,188

Provision for loan losses

2,375,000

1,200,000

5,975,000

15,846,853

Net interest income (deficiency) after provision

for loan losses

566,362

1,863,627

5,755,829

(2,609,665

)

Noninterest income:

Service charges and other fee income

671,391

837,448

2,954,457

3,223,857

Trust income

51,938

77,426

238,602

336,258

Gain on available for sale securities

329,110

106,542

329,110

198,651

Other

29,777

4,511

32,138

9,129

Total noninterest income

1,082,216

1,025,927

3,554,307

3,767,895

Noninterest expense:

Salaries and employee benefits

1,171,020

1,513,521

5,100,377

6,532,037

Net occupancy expense

228,687

286,249

1,048,165

1,138,208

Equipment expense

85,232

93,351

338,412

382,701

Professional and service fees

544,016

487,072

1,826,368

2,058,513

Loan collection and foreclosed property expenses

119,326

339,964

689,826

1,099,083

Computer service fees

112,597

126,401

455,663

464,224

Amortization expense

59,832

66,771

254,582

267,852

FDIC assessment fees

353,885

348,890

1,428,838

1,639,183

Insurance

154,534

151,167

681,299

509,486

Printing and supplies

40,369

44,839

147,437

184,058

Director fees

15,575

15,300

64,025

73,742

Net loss on sale/writedown of OREO and

repossessions

124,443

364,457

378,893

827,324

Other

187,863

161,426

732,433

762,270

Total noninterest expense

3,197,379

3,999,408

13,146,318

15,938,681

Loss before federal income taxes

(1,548,801

)

(1,109,854

)

(3,836,182

)

(14,780,451

)

Federal income tax expense (benefit)

127,396

(1,552,054

)

57,263

(1,084,568

)

Net income (loss)

$

(1,676,197

)

$

442,200

$

(3,893,445

)

$

(13,695,883

)

Per share statistics:

Basic and Diluted EPS

$

(0.52

)

$

0.14

$

(1.22

)

$

(4.32

)

Dividends

$

-

$

-

$

-

$

-

Basic and diluted average shares outstanding

3,197,425

3,178,514

3,193,101

3,167,918