<HTML>
<HEAD>
<TITLE>ATHENS BANCSHARES CORPORATION</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">As filed with the Securities and Exchange Commission on September&nbsp;17, 2009
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 0pt">Registration No.&nbsp;333-__________
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 6pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>







<DIV align="center" style="font-size: 14pt; margin-top: 10pt"><B>UNITED STATES</B><BR>
<B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-1</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
UNDER THE SECURITIES ACT OF 1933</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Athens Bancshares Corporation<BR>
and<BR>
Athens Federal Community Bank 401(k) Plan</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 0pt">(Exact name of registrant as specified in its charter)
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Tennessee</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>6035</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">27-0920126</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of <BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Primary Standard Industrial<BR>
Classification Code Number)
</TD>
    <TD>&nbsp;</TD>

<TD align="center" valign="top" style="border-top:0px solid black">(IRS
Employer Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>106 Washington Avenue<BR>
Athens, Tennessee 37303<BR>
(423)&nbsp;745-1111</B><BR>
(Address, including zip code, and telephone number,<BR>
including area code, of registrant&#146;s principal executive offices)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Jeffrey L. Cunningham<BR>
President and Chief Executive Officer<BR>
106 Washington Avenue<BR>
Athens, Tennessee 37303<BR>
(423)&nbsp;745-1111</B><BR>
(Name, address, including zip code, and telephone number,<BR>
including area code, of agent for service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Copies to:</B></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Paul M. Aguggia, Esq.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Martin Meyrowitz, Esq.</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>Victor L. Cangelosi, Esq.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Silver Freedman &#038; Taff, LLP</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>Kilpatrick Stockton LLP</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>3299 K Street, Suite&nbsp;100</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>607
14</B><SUP style="font-size: 85%; vertical-align: text-top"><B>th</B></SUP>
<B>Street, NW, Suite&nbsp;900</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Washington, DC 20007</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>Washington, DC 20005</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(202)&nbsp;295-4513</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>(202)&nbsp;508-5854</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Approximate date of commencement of proposed sale to the public: </B>As soon as practicable after
this Registration Statement becomes effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933, check the following box.
<FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of &#147;large
accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the
Exchange Act.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Large accelerated filer <FONT face="Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Accelerated filer <FONT face="Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Non-accelerated filer <FONT face="Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Smaller reporting company <FONT face="Wingdings">&#254;</FONT></FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">(Do not check if a smaller reporting company)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Calculation of Registration Fee</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR style="font-size: 1px" valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Proposed Maximum</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Proposed Maximum</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amount of</TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left">Title of Each Class of</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amount to</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Offering Price</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Aggregate Offering</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Registration</TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left">Securities to be Registered</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">be Registered</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Per Unit</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Price (2)</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Fee</TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock
$.01 par value</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD colspan="3" align="right" style="border-top: 2px solid #000000" nowrap>2,512,750 shares (1)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">10.00</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">25,127,500</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">1,403.00</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">Participation Interests</DIV></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" colspan="2">(3)</TD>

    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size:4pt">
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares of common stock to be issued to the Athens Federal Foundation, a private
foundation.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated solely for the purpose of calculating the registration fee.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>In addition, pursuant to Rule 416(c) under the Securities Act, this registration statement
also covers an indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>The securities of Athens Bancshares Corporation to be purchased by the Athens Federal
Community Bank 401(k) Plan included in the amount shown for common stock. Accordingly, no
separate fee is required for the participation interests. In accordance with Rule 457(h) of
the Securities Act, as amended, the registration fee has been calculated on the basis of the
number of shares of common stock that may be purchased with the current assets of such Plan.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section&nbsp;8(a), may determine.</B>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>








<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>PARTICIPATION INTERESTS IN<BR>
ATHENS FEDERAL COMMUNITY BANK<BR>
EMPLOYEES&#146; SAVINGS &#038; PROFIT SHARING PLAN AND TRUST<BR>
AND<BR>
OFFERING OF 526,533 SHARES OF<BR>
ATHENS BANCSHARES CORPORATION<BR>
COMMON STOCK ($.01 PAR VALUE)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement relates to the offer and sale to participants in the Athens Federal
Community Bank Employees&#146; Savings &#038; Profit Sharing Plan and Trust (the &#147;401(k) Plan&#148;), of
participation interests and shares of common stock of Athens Bancshares Corporation (&#147;Athens
Bancshares&#148;) in connection with the Athens Bancshares initial public offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;401(k) Plan participants may direct the 401(k) Plan trustee, to use all or a portion of their
account balances to subscribe for and purchase shares of Athens Bancshares common stock through the
Athens Bancshares Stock Fund. Based upon the value of the 401(k) Plan assets as of September&nbsp;14,
2009, the Athens Bancshares Stock Fund trustee may purchase up to 526,533 shares of Athens
Bancshares common stock at a purchase price of $10.00 per share. This prospectus supplement
relates to the election of 401(k) Plan participants to direct the 401(k) Plan trustee to invest
their 401(k) Plan account balances in Athens Bancshares common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Athens Bancshares
Corporation prospectus dated _______________, 200_, which we have
attached to this prospectus supplement, includes detailed information regarding the offering of
shares of Athens Bancshares common stock and the financial condition, results of operations and
business of Athens Federal Community Bank (&#147;Athens Federal &#147;). This prospectus supplement provides
information regarding the 401(k) Plan. You should read this prospectus supplement together with
the prospectus and keep both for future reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Please refer to &#147;Risk Factors&#148; beginning on page _____ of the prospectus.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal<BR>
Deposit Insurance Corporation, nor any other state or federal agency or any state securities<BR>
commission, has approved or disapproved these securities. Any representation to the contrary is a<BR>
criminal offense.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>These securities are not deposits or accounts and are not insured or guaranteed by the Federal<BR>
Deposit Insurance Corporation or any other government agency.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement may be used only in connection with offers and sales by Athens
Bancshares of participation interests or shares of common stock under the 401(k) Plan in the
offering. No one may use this prospectus supplement to re-offer or resell interests or shares of
common stock acquired through the 401(k) Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained in this prospectus supplement and the
attached prospectus. Neither Athens Bancshares, Athens Federal nor the 401(k) Plan have authorized
anyone to provide you with different information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement does not constitute an offer to sell or solicitation of an offer to
buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer
or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the
prospectus nor any sale of common stock shall under any circumstances imply that there has been no
change in the affairs of Athens Federal or the 401(k) Plan since the date of this prospectus
supplement, or that the information contained in this prospectus supplement or incorporated by
reference is correct as of any time after the date of this prospectus supplement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The date of this Prospectus Supplement is ________________, 200_.</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">TABLE OF CONTENTS
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 8pt">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid black" align="center">Page</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">THE OFFERING </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#102">Securities Offered </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#103">Election to Purchase Athens Bancshares Corporation Common Stock in the
Stock Offering </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#104">Value of Participation Interests </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#105">Method of Directing Transfer </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#106">Time for Directing Transfer </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#107">Irrevocability of Transfer Direction </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#108">Purchase Price of Athens Bancshares Corporation Common Stock </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#109">Nature of a Participant&#146;s Interest in Athens Bancshares Corporation Common Stock </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#110">Voting and Tender Rights of Athens Bancshares Corporation Stock </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">DESCRIPTION OF THE 401(k) PLAN </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#112">Introduction </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#113">Eligibility and Participation </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#114">Contributions Under the 401(k) Plan </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#115">Limitations on Contributions </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#116">401(k) Plan Investments </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#117">Benefits Under the 401(k) Plan </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#118">Withdrawals and Distributions from the 401(k) Plan </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#119">ADMINISTRATION OF THE 401(k) PLAN </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#120">Trustees </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#121">Reports to 401(k) Plan Participants </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#122">Plan Administrator </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#123">Amendment and Termination </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#124">Merger, Consolidation or Transfer </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#125">Federal Income Tax Consequences </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#126">Restrictions on Resale </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#127">SEC Reporting and Short-Swing Profit Liability </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#128">LEGAL OPINION </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE OFFERING</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Securities Offered</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The securities offered in connection with this prospectus supplement are participation
interests in the 401(k) Plan. At a purchase price of $10.00 per share, the 401(k) Plan trustee may
acquire up to 526,533 shares of Athens Bancshares common stock in the stock offering (the &#147;Stock
Offering&#148;). The interests offered under this prospectus supplement are conditioned on the close of
the Stock Offering. Certain subscription rights and purchase limitations also govern your
investment in the Athens Bancshares Stock Fund in connection with the Stock Offering. See <I>&#147;The
Conversion and Stock Offering &#151; Subscription Offering and
Subscription Rights&#148; </I>and <I>&#147;&#151; Limitations
on Purchases of Shares&#148; </I>in the prospectus attached to this prospectus supplement for further
discussion of these subscription rights and purchase limitations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement contains information regarding the 401(k) Plan. The attached
prospectus contains information regarding the Stock Offering and the financial condition, results
of operations and business of Athens Federal and its affiliates. The address of the principal
executive office of Athens Federal is 106 Washington Avenue, Athens, Tennessee 37371. The
telephone number of Athens Federal is (800)&nbsp;526-3572.
</DIV>
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Election to Purchase Athens Bancshares Corporation Common Stock in the Stock Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Stock Offering, you may direct the 401(k) Plan trustee to transfer all
or a portion of your 401(k) Plan account balance to the Athens Bancshares Stock Fund. The 401(k)
Plan trustee will subscribe for Athens Bancshares common stock offered for sale in the Stock
Offering in accordance with each participant&#146;s direction. If there is not enough Athens Bancshares
common stock available in the Stock Offering to fill all subscriptions, the common stock will be
apportioned and the 401(k) Plan trustee may not be able to purchase all of the common stock you
requested. If the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan
funds (which are not invested in Athens Bancshares common stock) will be reinvested in accordance
with the investment elections that you have in place for your elective deferrals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All eligible plan participants are permitted to direct a transfer of all or a portion of their
account balances in the 401(k) Plan into the Athens Bancshares Stock Fund. However, transfer
directions are subject to subscription rights and purchase priorities. See <I>&#147;Summary &#151; Persons Who
Can Order Stock in the Offering&#148; </I>in the attached prospectus. Athens Bancshares has granted rights
to subscribe for shares of Athens Bancshares common stock to the following persons in the following
order of priority: (1)&nbsp;persons with $50 or more on deposit at Athens Federal as of the close of
business on March&nbsp;31, 2008; (2)&nbsp;the Athens Federal Community Bank Employee Stock Ownership Plan;
(3)&nbsp;persons with $50 or more on deposit at Athens Federal as of the close of business on September
30, 2009; and (4)&nbsp;depositors of Athens Federal as of the close of business on _________________ who
are not eligible under categories 1 and 3 above and borrowers of Athens Federal as of May&nbsp;1, 1999
whose borrowings still exist as of the close of business on ___________________. If you fall
into one of the above subscription offering categories, you have subscription rights to purchase
shares of Athens Bancshares common stock in the Stock Offering and you may use your account balance
in the 401(k) Plan to subscribe for shares of Athens Bancshares common stock.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The limitations on the total amount of Athens Bancshares common stock that you may purchase in
the Stock Offering, as described in the prospectus (see <I>&#147;The Conversion and Stock Offering &#151;
Limitations on Purchases of Shares&#148;</I>), will be calculated based on the aggregate amount that you
subscribed for: (a)&nbsp;through your 401(k) Plan account and (b)&nbsp;through your sources of funds outside
of the 401(k) Plan. Whether you place an order through the 401(k) Plan, outside the 401(k) Plan,
or both, the number of shares of Athens Bancshares common stock, if any, that you receive will be
determined based on the total number of subscriptions, your purchase priority and the allocation
priorities described in the prospectus. If, as a result of the calculation, you are allocated
insufficient shares to fill all of your orders, available shares will be allocated between orders
on a pro rata basis.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Value of Participation Interests</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of September&nbsp;14, 2009, the market value of the 401(k) Plan assets equaled approximately
$5,265,332. The plan administrator has distributed quarterly statements to each participant
reflecting the value of his or her beneficial interest in the 401(k) Plan as of June&nbsp;30, 2009. The
value of the 401(k) Plan assets represents past contributions made to the 401(k) Plan on your
behalf, plus or minus earnings or losses on the contributions, less previous withdrawals.
</DIV>
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Method of Directing Transfer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to facilitate your investment in the Athens Bancshares Stock Fund in connection with
the Stock Offering, you must complete, sign and submit the <B>blue </B>form included with this prospectus
supplement (the &#147;Investment Form&#148;). In order to invest in the Athens Bancshares Stock Fund, you
must direct the 401(k) Plan trustee to transfer a percentage of your beneficial interest in the
assets of the 401(k) Plan to the Athens Bancshares Stock Fund (in multiples of not less than 1%).
If you do not wish to invest in the Athens Bancshares Stock Fund at this time, you do not need to
take any action. The minimum investment in the Athens Bancshares Stock Fund during the Stock
Offering is $25 and the maximum individual investment is $ ___________. <B>Your blue Investment Form must
be received by __________________ by noon on __________________, 200_.</B>
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Time for Directing Transfer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The deadline to submit your Investment Form to __________________ is 12:00 noon, local time, on
____________________, 200_, <B>unless extended by Athens Federal. </B>If you have any questions regarding
the Athens Bancshares Stock Fund, you can call ________________ at (_____) ______________.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Irrevocability of Transfer Direction</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once you have submitted your Investment Form, you cannot change your direction to transfer
amounts credited to your account in the 401(k) Plan to the Athens Bancshares Stock Fund. Following
the closing of the Stock Offering and the initial purchase of shares in the Athens Bancshares Stock
Fund, you will again have complete access to any funds you directed towards the purchase of shares
of Athens Bancshares common stock in the Stock Offering. Special restrictions may apply to
transfers directed to and from the Athens Bancshares Stock Fund by participants who are subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended. See <I>&#147;SEC Reporting and
Short-Swing Profit Liability&#148;</I>.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purchase Price of Athens Bancshares Corporation Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee will use the funds transferred to the Athens Bancshares Stock Fund to purchase
shares of Athens Bancshares common stock in the Stock Offering. The Athens Bancshares Stock Fund
trustee will pay the same price for shares of Athens Bancshares common stock as all other persons
who purchase
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">shares of Athens Bancshares common stock in the Stock Offering. If there is not enough common
stock available in the Stock Offering to fill all subscriptions, the common stock will be
apportioned and the trustee may not be able to purchase all of the common stock you requested. If
the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan funds (which are
not invested in Athens Bancshares common stock) will be reinvested in accordance with the
investment elections that you have in place for your elective deferrals.
</DIV>

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Nature of a Participant&#146;s Interest in Athens Bancshares Corporation Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee will hold Athens Bancshares common stock in the name of the 401(k) Plan. The
trustee will credit shares of Athens Bancshares common stock acquired at your direction to your
account under the 401(k) Plan.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Voting and Tender Rights of Athens Bancshares Corporation Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 401(k) Plan trustee will exercise voting and tender rights attributable to all Athens
Bancshares common stock held in the Athens Bancshares Stock Fund, as directed by participants with
interests in the Athens Bancshares Stock Fund. With respect to each matter as to which holders of
Athens Bancshares common stock have a right to vote, you will have voting instruction rights that
reflect your proportionate interest in the Athens Bancshares Stock Fund. The number of shares of
Athens Bancshares common stock held in the Athens Bancshares Stock Fund voted for and against each
matter will be proportionate to the number of voting instruction rights exercised. If there is a
tender offer for Athens Bancshares common stock, the 401(k) Plan allots each participant a number
of tender instruction rights reflecting the participant&#146;s proportionate interest in the Athens
Bancshares Stock Fund. The percentage of shares of Athens Bancshares common stock held in the
Athens Bancshares Stock Fund that will be tendered will be the same as the percentage of the total
number of tender instruction rights exercised in favor of the tender offer. The remaining shares
of Athens Bancshares common stock held in the Athens Bancshares Stock Fund will not be tendered.
The 401(k) Plan provides that participants will exercise their voting instruction rights and tender
instruction rights on a confidential basis.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF THE 401(k) PLAN</B>
</DIV>

<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Introduction</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal adopted the amended and restated 401(k) Plan effective _________________, 200_.
Athens Federal intends for the 401(k) Plan to comply, in form and in operation, with all applicable
provisions of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as
amended (&#147;ERISA&#148;). Athens Federal may change the 401(k) Plan from time to time in the future to
ensure continued compliance with these laws. Athens Federal may also amend the 401(k) Plan from
time to time in the future to add, modify, or eliminate certain features of the plan, as it sees
fit. Federal law provides you with various rights and protections as a participant in the 401(k)
Plan, which is governed by ERISA. However, the Pension Benefit Guaranty Corporation does not
guarantee your benefits under the 401(k) Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Reference to Full Text of the Plan. </I></B>The following portions of this prospectus supplement
summarize the material provisions of the 401(k) Plan. Athens Federal qualifies this summary in its
entirety by reference to the full text of the 401(k) Plan. You may obtain copies of the 401(k)
Plan document, including any amendments to the plan and a summary plan description, by contacting
__________________ at (______) _____________. You should carefully read the 401(k) Plan documents to understand
your rights and obligations under the 401(k) Plan.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Eligibility and Participation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a regular full time or part time employee of Athens Federal, you are eligible to commence
participation in the 401(k) Plan as of the first Plan entry date following your employment. The
Plan entry dates are the 1<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> day of each month.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of September&nbsp;14, 2009, all eligible employees of Athens Federal actively participated in
the 401(k) Plan.
</DIV>
<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Contributions Under the 401(k) Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Employee Pre-Tax Salary Deferrals. </I></B>Subject to certain Internal Revenue Service limitations,
the 401(k) Plan permits you to make pre-tax salary deferrals each payroll period of up to 75% of
your compensation. Compensation is defined for purposes of the 401(k) Plan as each participant&#146;s
Box 1, form W-2 compensation. In addition to pre-tax salary deferrals, you may make &#147;catch up&#148;
contributions if you are currently age 50 or will be 50 before the end of the calendar year. You
are always 100% vested in your elective deferrals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Athens Federal Safe Harbor Matching Contributions. </I></B>The 401(k) Plan provides that Athens
Federal will make matching contributions on behalf of each eligible participant with respect to
each eligible participant&#146;s elective deferrals. If you elect to defer funds into the 401(k) Plan,
Athens Federal will match 100% of your elective deferrals up to 6% of your compensation. Athens
Federal makes matching contributions only to those participants who actively defer a percentage of
their compensation into the 401(k) Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Safe Harbor Basic Contributions. </I></B>The 401(k) Plan provides that Athens Federal may make
additional employer contributions under the Plan. Currently, Athens Federal makes a monthly safe
harbor basic contribution to the 401(k) Plan on behalf of each participant equal to 3% of each
participant&#146;s compensation. Participants vest in their basic contributions at a rate of
33<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>% each
year after two years of service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Rollover Contributions. </I></B>Athens Federal allows employees who receive a distribution from a
previous employer&#146;s tax-qualified employee benefit plan to deposit that distribution into a
Rollover Contribution account under the 401(k) Plan, provided the rollover contribution satisfies
IRS requirements. For additional information on Rollover Contributions see the Summary Plan
Description for the 401(k) Plan.
</DIV>
<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Limitations on Contributions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Limitation on Employee Salary Deferrals. </I></B>By law, your total deferrals under the 401(k) Plan,
together with similar plans, may not exceed $16,500 for 2009. Eligible employees who are age 50
and over may also make additional &#147;catch-up&#148; contributions to the plan, up to a maximum of $5,500
for 2009. The Internal Revenue Service periodically increases these limitations. An eligible
participant who exceeds these limitations must include any excess deferrals in gross income for
federal income tax purposes in the year of deferral. In addition, the participant must pay federal
income taxes on any excess deferrals when distributed by the 401(k) Plan to the participant, unless
the plan distributes the excess deferrals and any related income no later than the first April&nbsp;15th
following the close of the taxable year in which the participant made the excess deferrals. Any
income on excess deferrals distributed before such date is treated, for federal income tax
purposes, as earned and received by the participant in the taxable year of the distribution.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Limitation on Annual Additions and Benefits. </I></B>As required by the Internal Revenue Code, the
401(k) Plan provides that the total amount of contributions and forfeitures (annual additions)
credited to a participant during any year under all defined contribution plans of Athens Federal
(including the 401(k) Plan and the proposed Athens Federal Community Bank Employee Stock Ownership
Plan) may not exceed the lesser of 100% of the participant&#146;s annual compensation or $49,000 for
2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Limitation on Plan Contributions for Highly Compensated Employees. </I></B>Special provisions of the
Internal Revenue Code limit the amount of pre-tax and matching contributions that may be made to
the 401(k) Plan in any year on behalf of highly compensated employees, in relation to the amount of
pre-tax and matching contributions made by or on behalf of all other employees eligible to
participate in the 401(k) Plan. If pre-tax and matching contributions exceed these limitations,
the plan must adjust the contribution levels for highly compensated employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, a highly compensated employee includes any employee who (1)&nbsp;was a 5% owner of the
sponsoring employer at any time during the year or the preceding year, or (2)&nbsp;had compensation for
the preceding year in excess of $110,000 and, if the sponsoring employer so elects, was in the top
20% of employees by compensation for such year. The preceding dollar amount applies for 2009 and
may be adjusted periodically by the Internal Revenue Service .
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Top-Heavy Plan Requirements. </I></B>If the 401(k) Plan is a Top-Heavy Plan for any calendar year,
Athens Federal may be required to make certain minimum contributions to the 401(k) Plan on behalf
of non-key employees. In general, the 401(k) Plan will be treated as a &#147;Top-Heavy Plan&#148; for any
calendar year if, as of the last day of the preceding calendar year, the aggregate balance of the
accounts of &#147;Key Employees&#148; exceeds 60% of the aggregate balance of the accounts of all employees
under the plan. A Key Employee is generally any employee who, at any time during the calendar year
or any of the four preceding years, is:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an officer of Athens Federal whose annual compensation exceeds $145,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a 5% owner of the employer, meaning an employee who owns more than 5% of the
outstanding stock of Athens Bancshares, or who owns stock that possesses more than 5%
of the total combined voting power of all stock of Athens Bancshares; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a 1% owner of the employer, meaning an employee who owns more than 1% of the
outstanding stock of Athens Bancshares, or who owns stock that possesses more than 1%
of the total combined voting power of all stock of Athens Bancshares, <I>and </I>whose annual
compensation exceeds $150,000.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The foregoing dollar amounts are for 2009.</I></B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>401(k) Plan Investments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective October&nbsp;1, 2009, the 401(k) Plan offers the following investment choices:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>Annual Rates of Return as of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Fund Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P 500 Stock Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stable Value Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P MidCap Stock Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short Term Investment Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">International Stock Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Growth Index Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value Index Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Russell 2000 Stock Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">NASDAQ 100 Stock Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S. REIT Index Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Target Retirement Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Target Retirement Funds (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Aggregate Bond Index Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Government Short Term Investment Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Treasury Inflation Protection Fund</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>&#091;INSERT DESCRIPTION OF FUNDS&#093;</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Stock Fund.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Stock Offering, Athens Federal has added the Athens Bancshares Stock
Fund as an additional choice to the investment alternatives described above. The Athens Bancshares
Stock Fund invests primarily in the common stock of Athens Bancshares. Participants in the 401(k)
Plan may direct the 401(k) Plan trustee to invest all or a portion of their 401(k) Plan account
balances in the Athens Bancshares Stock Fund during the Stock Offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Athens Bancshares Stock Fund consists of investments in the common stock of Athens
Bancshares made on the closing date of the Stock Offering. Your investment in the Athens
Bancshares Stock Fund will be recorded using the <I>unitized accounting </I>method. If cash dividends are
paid on Athens Bancshares common stock, the trustee will, to the extent practicable, use the
dividends held in the Athens Bancshares Stock Fund to purchase shares of the common stock. Pending
investment in the common stock, assets held in the Athens Bancshares Stock Fund will be placed in
the short term investment component of the Athens Bancshares Stock Fund. The Stock Fund will
maintain a 3-5% cash ratio target following the Stock Offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this prospectus supplement, no shares of Athens Bancshares common stock have
been issued or are outstanding, and there is no established market for Athens Bancshares common
stock. Accordingly, there is no record of the historical performance of the Athens Bancshares
Stock Fund. Performance of the Athens Bancshares Stock Fund depends on a number of factors,
including the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">financial condition and profitability of Athens Federal and general stock market conditions. See
<I>&#147;Risk Factors&#148; </I>in the attached prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Once you have submitted your Investment Form, you may not change your investment directions in
the Stock Offering.</B>
</DIV>
<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Benefits Under the 401(k) Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Vesting. </I></B>All participants are 100% vested in their pre-tax elective deferrals and safe harbor
employer matching contributions. This means that participants have a non-forfeitable right to
these funds and any earnings on the funds at all times. Participants vest in their safe harbor
basic contribution at a rate of 33<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>
% each year after two years of service.
</DIV>
<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Withdrawals and Distributions from the 401(k) Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Withdrawals Before Termination of Employment. </I></B>While in active service, participants may take
&#091;&#95;&#95;&#95;&#093; loans from the 401(k) Plan per plan year (subject to the restrictions set forth in the
401(k) Plan and the Athens Federal loan policy). A participant may also take &#091;&#95;&#95;&#95;&#093; hardship
withdrawal per plan year, provided the participant has a hardship event as defined by the Internal
Revenue Service regulations and subject to approval by the Plan Administrator.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Distribution Upon Retirement, Death or Disability. </I></B>If a participant&#146;s accounts are $1,000 or
less upon termination of employment, payment will be in the form of a lump sum as of a valuation
date as soon thereafter as administratively possible. If a participant&#146;s accounts exceed $1,000
upon termination of employment, and the participant does not elect to have his/her distribution
paid, payment will be in the form of a Direct Rollover to an individual retirement plan designated
by the Plan Administrator.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Distribution Upon Termination for Any Other Reason. </I></B>If a participant&#146;s accounts are $1,000 or
less upon termination of employment, payment will be in the form of a lump sum as of a valuation
date as soon thereafter as administratively possible. If a participant&#146;s accounts exceed $1,000
upon termination of employment, and the participant does not elect to have his/her distribution
paid, payment will be in the form of a Direct Rollover to an individual retirement plan designated
by the Plan Administrator.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Nonalienation of Benefits. </I></B>Except with respect to federal income tax withholding, and as
provided for under a qualified domestic relations order, benefits payable under the 401(k) Plan
will not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary,
and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any rights to benefits payable under the 401(k) Plan will be void.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Applicable federal tax law requires the </B><B>401(k)</B><B> Plan to impose substantial restrictions on your
right to withdraw amounts held under the </B><B>401(k)</B><B> Plan before your termination of employment with
Athens Federal. Federal law may also impose an excise tax on withdrawals from the </B><B>401(k)</B><B> Plan
before you attain 59<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT> years of age, regardless of whether the withdrawal occurs during your
employment with Athens Federal or after termination of employment.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADMINISTRATION OF THE 401(k) PLAN</B>
</DIV>

<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Trustees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The board of directors of Athens Federal has appointed Pentegra Trust Company to serve as
trustee for the 401(k) Plan. The Reliance Trust Company serves as the custodian of all of the
Plan assets. The trustees receive, hold and invest the contributions to the 401(k) Plan in trust
and distribute them to participants and beneficiaries in accordance with the terms of the 401(k)
Plan and the directions of the Plan Administrator. The trustees are responsible for the investment
of the trust assets, as directed by the Plan Administrator and the participants.
</DIV>
<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Reports to 401(k) Plan Participants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan Administrator furnishes participants quarterly statements that show the balance in
their accounts as of the statement date, contributions made to their accounts during that period
and any additional adjustments required to reflect earnings or losses.
</DIV>
<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Plan Administrator</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal currently acts as Plan Administrator for the 401(k) Plan. The Plan
Administrator handles the following administrative functions: interpreting the provisions of the
plan, prescribing procedures for filing applications for benefits, preparing and distributing
information explaining the plan, maintaining plan records, books of account and all other data
necessary for the proper administration of the plan, preparing and filing all returns and reports
required by the U.S. Department of Labor and the IRS and making all required disclosures to
participants, beneficiaries and others under ERISA.
</DIV>
<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Amendment and Termination</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal expects to continue the 401(k) Plan indefinitely. Nevertheless, Athens Federal
may terminate the 401(k) Plan at any time. If Athens Federal terminates the 401(k) Plan in whole
or in part, all affected participants become fully vested in their accounts, regardless of other
provisions of the 401(k) Plan. Athens Federal reserves the right to make, from time to time,
changes which do not cause any part of the trust to be used for, or diverted to, any purpose other
than the exclusive benefit of participants or their beneficiaries. Athens Federal may amend the
plan, however, as necessary or desirable, in order to comply with ERISA or the Internal Revenue
Code.
</DIV>
<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Merger, Consolidation or Transfer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the 401(k) Plan merges or consolidates with another plan or transfers the trust assets to
another plan, and either the 401(k) Plan or the other plan is subsequently terminated, the 401(k)
Plan requires that you receive a benefit immediately after the merger, consolidation or transfer
that would equal or exceed the benefit you would have been entitled to receive immediately before
the merger, consolidation or transfer, if the 401(k) Plan had terminated at that time.
</DIV>
<DIV align="left">
<A name="125"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Income Tax Consequences</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following briefly summarizes the material federal income tax aspects of the 401(k) Plan.
You should not rely on this summary as a complete or definitive description of the material federal
income tax consequences of the 401(k) Plan. Statutory provisions change, as do their
interpretation, and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">their application may vary in individual circumstances. Finally, applicable state and local income
tax laws may have different tax consequences than the federal income tax laws. <B>401(k) Plan
participants should consult a tax advisor with respect to any transaction involving the 401(k)
Plan, including any distribution from the 401(k) Plan.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a &#147;tax-qualified retirement plan,&#148; the Internal Revenue Code affords the 401(k) Plan
certain tax advantages, including the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the sponsoring employer may take an immediate tax deduction for the amount
contributed to the plan each year;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>participants pay no current income tax on amounts contributed by the employer
on their behalf; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>earnings of the plan are tax-deferred, thereby permitting the tax-free
accumulation of income and gains on investments.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal administers the 401(k) Plan to comply in operation with the requirements of the
Internal Revenue Code as of the applicable effective date of any change in the law. If Athens
Federal should receive an adverse determination letter from the Internal Revenue Service regarding
the 401(k) Plan&#146;s tax exempt status, all participants would generally recognize income equal to
their vested interests in the 401(k) Plan, the participants would not be permitted to transfer
amounts distributed from the 401(k) Plan to an Individual Retirement Account or to another
qualified retirement plan, and Athens Federal would be denied certain tax deductions taken in
connection with the 401(k) Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Lump Sum Distribution. </I></B>A distribution from the 401(k) Plan to a participant or the
beneficiary of a participant qualifies as a lump sum distribution if it is made within one taxable
year, on account of the participant&#146;s death, disability or separation from service, or after the
participant attains age 59<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT>; and consists of the balance credited to the participant under this
plan and all other profit sharing plans, if any, maintained by Athens Federal. The portion of any
lump sum distribution included in taxable income for federal income tax purposes consists of the
entire amount of the lump sum distribution, less the amount of after-tax contributions, if any,
made to any other profit-sharing plans maintained by Athens Federal, if the distribution includes
those amounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Athens Bancshares Common Stock Included in Lump Sum Distribution. </I></B>If a lump sum distribution
includes Athens Bancshares common stock, the distribution generally is taxed in the manner
described above. The total taxable amount is reduced, however, by the amount of any net unrealized
appreciation on Athens Bancshares common stock; that is, the excess of the value of Athens
Bancshares common stock at the time of the distribution over the cost or other basis of the
securities to the trust. The tax basis of Athens Bancshares common stock, for purposes of
computing gain or loss on a subsequent sale, equals the value of Athens Bancshares common stock at
the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent
sale or other taxable disposition of Athens Bancshares common stock, to the extent of the net
unrealized appreciation at the time of distribution, is long-term capital gain, regardless of how
long you hold the Athens Bancshares common stock, or the &#147;holding period.&#148; Any gain on a
subsequent sale or other taxable disposition of Athens Bancshares common stock that exceeds the
amount of net unrealized appreciation upon distribution is considered long-term capital gain,
regardless of the holding period. The recipient of a distribution may elect to include the amount
of any net unrealized appreciation in the total taxable amount of the distribution, to the extent
allowed under IRS regulations.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We have provided you with a brief description of the material federal income tax aspects of
the </B><B>401(k)</B><B> Plan that are generally applicable under the Internal Revenue Code. We do not intend
this description to be a complete or definitive description of the federal income tax consequences
of participating in or receiving distributions from the </B><B>401(k)</B><B> Plan. Accordingly, you should
consult a tax advisor concerning the federal, state and local tax consequences of participating in
and receiving distributions from the </B><B>401(k)</B><B> Plan.</B>
</DIV>
<DIV align="left">
<A name="126"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions on Resale</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any &#147;affiliate&#148; of Athens Bancshares under Rules&nbsp;144 and 405 of the Securities Act of 1933, as
amended, who receives a distribution of common stock under the 401(k) Plan, may re-offer or resell
such shares only under a registration statement filed under the Securities Act of 1933, as amended,
assuming the availability of a registration statement, or under Rule&nbsp;144 or some other exemption
from these registration requirements. An &#147;affiliate&#148; of Athens Bancshares is someone who directly
or indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, Athens Bancshares. Generally, a director, principal officer or major shareholder of
a corporation is deemed to be an &#147;affiliate&#148; of that corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any person who may be an &#147;affiliate&#148; of Athens Bancshares may wish to consult with counsel
before transferring any common stock they own. In addition, participants should consult with
counsel regarding the applicability to them of Section&nbsp;16 of the Securities Exchange Act of 1934,
as amended, which may restrict the sale of Athens Bancshares common stock acquired under the 401(k)
Plan or other sales of Athens Bancshares common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Persons who are <B><I>not </I></B>deemed to be &#147;affiliates&#148; of Athens Bancshares at the time of resale may
resell freely any shares of Athens Bancshares common stock distributed to them under the 401(k)
Plan, either publicly or privately, without regard to the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended, or compliance with the restrictions and
conditions contained in the exemptions available under federal law. A person deemed an &#147;affiliate&#148;
of Athens Bancshares at the time of a proposed resale may publicly resell common stock only under a
&#147;re-offer&#148; prospectus or in accordance with the restrictions and conditions contained in Rule&nbsp;144
of the Securities Act of 1933, as amended, or some other exemption from registration, and may not
use this prospectus supplement or the accompanying prospectus in connection with any such resale.
In general, Rule&nbsp;144 restricts the amount of common stock which an affiliate may publicly resell in
any three-month period to the greater of one percent of Athens Bancshares common stock then
outstanding or the average weekly trading volume reported on the Nasdaq Capital Market during the
four calendar weeks before the sale. Affiliates may sell only through brokers without solicitation
and only at a time when Athens Bancshares is current in filing all required reports under the
Securities Exchange Act of 1934, as amended.
</DIV>
<DIV align="left">
<A name="127"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Reporting and Short-Swing Profit Liability</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability
requirements on officers, directors and persons who beneficially own more than 10% of public
companies such as Athens Bancshares. Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the filing of reports of beneficial ownership. Within ten days of becoming a
person required to file reports under Section&nbsp;16(a), such person must file a Form&nbsp;3 reporting
initial beneficial ownership with the Securities and Exchange Commission (&#147;SEC&#148;). Such persons
must also report periodically certain changes in beneficial ownership involving the allocation or
reallocation of assets held in their 401(k) Plan accounts, either on a Form&nbsp;4 within two business
days after a transaction, or annually on a Form&nbsp;5 within 45&nbsp;days after the close of a company&#146;s
fiscal year.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the reporting requirements described above, Section 16(b) of the Securities
Exchange Act of 1934, as amended, provides for the recovery by Athens Bancshares of profits
realized from the purchase and sale or sale and purchase of its common stock within any six-month
period by any officer, director or person who beneficially owns more than 10% of the common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC has adopted rules that exempt many transactions involving the 401(k) Plan from the
&#147;short-swing&#148; profit recovery provisions of Section&nbsp;16(b). The exemptions generally involve
restrictions upon the timing of elections to buy or sell employer securities for the accounts of
any officer, director or person who beneficially owns more than 10% of the common stock of a
company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except for distributions of the common stock due to death, disability, retirement, termination
of employment or under a qualified domestic relations order, persons who are subject to Section
16(b) may be required, under limited circumstances involving the purchase of common stock within
six months of the distribution, to hold the shares of common stock distributed from the 401(k) Plan
for six months after the distribution date.
</DIV>
<DIV align="left">
<A name="128"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL OPINION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the issuance of the common stock of Athens Bancshares will be passed upon by
Kilpatrick Stockton LLP, Washington, DC. Kilpatrick Stockton LLP acted as special counsel for
Athens Bancshares in connection with the Stock Offering.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PROSPECTUS</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Athens Bancshares Corporation</B><BR>
(Proposed Holding Company for Athens Federal Community Bank)<BR>
Up to 2,085,000 Shares of Common Stock
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt; margin-top: 6pt">&nbsp;</DIV>







<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation is offering shares of its common stock for sale in connection
with the conversion of Athens Federal Community Bank from the mutual to the stock form of
ownership. After the offering, Athens Bancshares Corporation will be the holding company for
Athens Federal Community Bank through its ownership of 100% of Athens Federal Community Bank&#146;s
outstanding common stock. We also intend to establish a charitable foundation in connection with
the conversion and contribute 100,000 shares of our common stock and $100,000 in cash to the
charitable foundation. We have received conditional approval to list our common stock on the
Nasdaq Capital Market under the symbol &#147;AFCB.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If you are or were a depositor of Athens Federal Community Bank:</I></B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You may have priority rights to purchase shares of common stock.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If you are a participant in the Athens Federal Community Bank 401(k) Plan:</I></B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You may direct that all or part of your current account balance in this plan be
invested in shares of common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You will receive a separate supplement to this prospectus that describes your rights
under this plan.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>If you fit neither of the categories above, but are interested in purchasing shares of our
common stock:</I></B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You may have an opportunity to purchase shares of common stock after priority orders
are filled.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are offering up to 2,085,000 shares of common stock for sale on a best efforts basis,
subject to certain conditions. We must sell a minimum of 1,515,000 shares to complete the
offering. If, as a result of regulatory considerations, demand for the shares or changes in market
conditions, the independent appraiser determines that our market value has increased, we may sell
up to 2,412,750 shares without giving you further notice or the opportunity to change or cancel
your order. The offering is expected to close at &#95;&#95;&#95;:&#95;&#95;&#95; p.m., Eastern time, on &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;. We
may extend this closing date without notice to you until &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, unless the Office of
Thrift Supervision approves a later date, which will not be beyond &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Keefe, Bruyette &#038; Woods, Inc. will use its best efforts to assist us in our selling efforts,
but is not required to purchase any of the common stock that is being offered for sale. Purchasers
will not pay a commission to purchase shares of common stock in the offering. All shares offered
for sale are offered at a price of $10.00 per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The minimum purchase is 25 shares. Once submitted, orders are irrevocable unless the offering
is terminated or extended beyond &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;. If the offering is extended beyond &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;,
subscribers will have the right to modify or rescind their purchase orders. Funds received before
the completion of the offering will be maintained in a segregated account at Athens Federal
Community Bank or, at our discretion, at another federally insured depository institution. All
funds received will bear interest at Athens Federal Community Bank&#146;s passbook savings rate, which
is currently 0.3% per annum. If we terminate the offering for any reason, or if we extend the
offering beyond &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, we will notify you and will promptly return your funds with
interest if you do not respond to the notice.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect our directors and executive officers, together with their associates, to subscribe
for 293,750 shares, which equals 19.4% of the shares offered for sale at the minimum of the
offering range.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Office of Thrift Supervision conditionally approved our plan of conversion on
&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;. However, such approval does not constitute a recommendation or endorsement of
this offering.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>This investment involves a degree of risk, including the possible loss of principal.<BR>
Please read &#147;Risk Factors&#148; beginning on page ____.</B>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>







<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OFFERING SUMMARY</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Price Per Share: $10.00

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Minimum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>As Adjusted</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,515,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,085,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,412,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross offering proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,850,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,127,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated offering expenses, excluding selling agent fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">920,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">920,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">920,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated selling agent fees and expenses<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">260,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">260,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">260,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated net proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13,970,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,670,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,947,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated net proceeds per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.51</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Excludes fees payable if a syndicated community offering is held. For a
discussion of the compensation of Keefe, Bruyette &#038; Woods, Inc., see <I>&#147;The Conversion and
Stock Offering &#151; Marketing Arrangements.&#148;</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>These securities are not deposits or savings accounts and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission, the Office of Thrift Supervision nor any state
securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For assistance, please contact the stock information center at (&#95;&#95;&#95;) &#95;&#95;&#95;-&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Keefe, Bruyette &#038; Woods</B></FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The date of this prospectus is ________________, 2009</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Map of Tennessee showing office locations of Athens Federal Community Bank&#093;
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>PAGE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD colspan="5">&nbsp;</TD></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#129">Summary</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#130">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#131">A Warning About Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#132">Selected Consolidated Financial and Other Data</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#133">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#134">Our Dividend Policy</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#135">Market for the Common Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#136">Capitalization</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#137">Regulatory Capital Compliance</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#138">Pro Forma Data</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#139">Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#140">Our Business</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#141">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#142">Our Management</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#143">Subscriptions by Executive Officers and Directors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#144">Regulation and Supervision</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#145">Federal and State Taxation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#146">The Conversion and Stock Offering</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#147">Athens Federal Foundation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#148">Restrictions on the Acquisition of Athens Bancshares Corporation and Athens Federal Community Bank</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#149">Description of Athens Bancshares Corporation Capital Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#150">Transfer Agent and Registrar</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#151">Registration Requirements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#152">Legal and Tax Opinions</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#153">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#154">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#155">Index to Consolidated Financial Statements of Athens Federal Community Bank</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="129"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Summary</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary highlights selected information from this document and may not contain all the
information that is important to you. To understand the stock offering fully, you should read this
entire document carefully.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Companies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Athens Bancshares Corporation<BR>
Athens Federal Community Bank</B><BR>
106 Washington Avenue<BR>
Athens, Tennessee 37303<BR>
(423)&nbsp;745-1111

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Athens Bancshares Corporation </I></B>This offering is made by Athens Bancshares Corporation, a
Tennessee corporation incorporated in September&nbsp;2009 by Athens Federal Community Bank to be its
holding company. Currently, Athens Bancshares Corporation has no assets. Following the
conversion, Athens Bancshares Corporation will own all of Athens Federal Community Bank&#146;s capital
stock and will direct, plan and coordinate Athens Federal Community Bank&#146;s business activities. In
the future, Athens Bancshares Corporation might also acquire or organize other operating
subsidiaries, including other financial institutions or financial services companies, although it
currently has no specific plans or agreements to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Athens Federal Community Bank. </I></B>Athens Federal Community Bank operates as a community-oriented
financial institution, with seven full-service offices in its primary market area, which
encompasses McMinn, Monroe and Bradley Counties in Tennessee and the surrounding areas. We offer a
variety of deposit products and provide residential mortgage loans and, to a lesser extent,
non-residential real estate loans, construction loans, land and land development loans,
multi-family real estate loans, consumer loans and commercial business loans to borrowers generally
located within our primary market area. At June&nbsp;30, 2009, we had total assets of $243.0&nbsp;million,
total deposits of $202.9&nbsp;million and total equity of $25.3&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our predominant lending activity has been residential mortgage lending in our primary market
area. In recent years, a significant portion of the residential mortgage loans that we have
originated have been secured by non-owner occupied properties. Loans secured by non-owner occupied
properties generally carry a greater risk of loss than loans secured by owner-occupied properties.
See <I>&#147;Risk Factors &#151; Risks Related to Our Business &#151; Our concentration in non-owner occupied real
estate loans may expose us to increased credit risk.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our Operating Strategy (page ___)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our mission is to operate and grow a profitable community-oriented financial institution. We
plan to achieve this by executing our strategy of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>remaining a community-oriented financial institution;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continuing our historical focus on residential mortgage lending;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expanding our commercial real estate and multi-family lending activities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>emphasizing lower cost core deposits to maintain low funding costs; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expanding our market share within our primary market area.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Conversion</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Description of the Conversion</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, we are a federally chartered mutual savings bank with no shareholders. Our
depositors currently have the right to vote on certain matters such as the election of directors
and this conversion transaction. The conversion transaction that we are undertaking involves a
change from our mutual form to a stock savings bank that will result in all of Athens Federal
Community Bank&#146;s capital stock being owned by Athens Bancshares Corporation. Voting rights in
Athens Bancshares Corporation will belong to its shareholders, including our employee stock
ownership plan and our charitable foundation. For more information on the charitable foundation
and the employee stock ownership plan, see <I>&#147;Summary&#151;We Will Form the Athens Federal Foundation&#148;</I>
and <I>&#147;Summary&#151;Benefits of the Offering to Management&#151;Employee Stock Ownership Plan.&#148; </I>We are
conducting the conversion under the terms of our plan of conversion. The Office of Thrift
Supervision has conditionally approved the plan of conversion, including a condition that it be
approved by our members. We have called a special meeting of members for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to vote
on the plan of conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following diagram depicts our corporate structure after the conversion and offering:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="g20505g20505002.gif" alt="(CHART)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Regulation and Supervision (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are, and Athens Bancshares Corporation will be upon completion of the conversion, subject
to regulation, supervision and examination by the Office of Thrift Supervision. We are also
subject to regulation by the Federal Deposit Insurance Corporation.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purchase Price</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purchase price is $10.00 per share. You will not pay a commission to buy any shares in
the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Number of Shares to be Sold</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are offering for sale between 1,515,000 and 2,085,000 shares of Athens Bancshares
Corporation common stock in this offering. With regulatory approval, we may increase the number of
shares to be sold to 2,412,750 shares without giving you further notice or the opportunity to
change or cancel your order. In considering whether to increase the offering size, the Office of
Thrift Supervision will consider the level of subscriptions, the views of our independent
appraiser, our financial condition and results of operations and changes in market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>How We Determined the Offering Range (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are offering between 1,515,000 and 2,085,000 shares, which is our offering range, based on
an independent appraisal of our pro forma market value prepared by Keller &#038; Company, Inc., an
independent appraisal firm experienced in appraisals of financial institutions. Keller &#038; Company
estimates that as of August&nbsp;19, 2009, our offering range was between $15.2&nbsp;million and $20.9
million, with a midpoint of $18.0&nbsp;million, and that our pro forma market value was between $16.2
million and $21.9&nbsp;million, with a midpoint of $19.0&nbsp;million, inclusive of shares to be issued to
the charitable foundation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In preparing its appraisal, Keller &#038; Company considered the information in this prospectus,
including our consolidated financial statements. Keller &#038; Company also considered the following
factors, among others:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our historical, present and projected operating results and financial condition and
the economic and demographic characteristics of our primary market area;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a comparative evaluation of the operating and financial statistics of Athens Federal
Community Bank with those of other similarly situated, publicly traded companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the effect of the capital raised in this offering on our net worth and earnings
potential;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the trading market for securities of comparable institutions and general conditions
in the market for such securities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our intention to contribute to the Athens Federal Foundation 100,000 shares of
Athens Bancshares Corporation&#146;s common stock and $100,000 in cash in connection with
the conversion.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Two measures that some investors use to analyze whether a stock might be a good investment are
the ratio of the offering price to the issuer&#146;s &#147;book value&#148; and the ratio of the offering price
per share to the issuer&#146;s core income per share for the past twelve months. Keller &#038; Company
considered these ratios, among other factors, in preparing its appraisal. Book value is the same
as total equity and represents the difference between the issuer&#146;s assets and liabilities. For
purposes of the appraisal, core earnings is defined as net earnings after taxes, plus non-recurring
expenses and minus non-recurring income, adjusted for income taxes in each case. Keller &#038;
Company&#146;s appraisal also incorporates an analysis of a peer group of publicly traded companies that
Keller &#038; Company considered to be comparable to us.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents a summary of selected pricing ratios for the peer group companies
and for us utilized by Keller &#038; Company in its appraisal. These ratios are based on our earnings
for the twelve months ended June&nbsp;30, 2009 and book value as of June&nbsp;30, 2009 and the latest date
for which complete financial data is publicly available for the peer group.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price to Core</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price to Book</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Earnings Multiple</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Value Ratio</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Athens Bancshares Corporation (pro forma):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Minimum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.97x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">42.91</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Midpoint</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47.33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Maximum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Maximum, as adjusted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55.18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peer group companies as of August&nbsp;19, 2009:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.06x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">63.12</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Median</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60.39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compared to the price to book value ratio of the peer group at the maximum of the offering
range, our stock would be priced at a discount of 23.5% to the peer group on a price-to-book basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The independent appraisal does not indicate market value. You should not assume or expect
that the valuation described above means that our common stock will trade at or above the $10.00
purchase price after the offering.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Possible Change in Offering Range (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Keller &#038; Company will update its appraisal before we complete the stock offering. If, as a
result of regulatory considerations, demand for the shares or changes in market conditions, Keller
&#038; Company determines that our pro forma market value has increased, we may sell up to 2,412,750
shares without further notice to you. If our pro forma market value at the end of the stock
offering period is either below $16.2&nbsp;million or above $25.1&nbsp;million, then, after consulting with
the Office of Thrift Supervision, we may: (i)&nbsp;terminate the stock offering and promptly return all
funds, with interest; (ii)&nbsp;set a new offering range and give all subscribers the opportunity to
confirm, modify or rescind their purchase orders for shares of Athens Bancshares Corporation&#146;s
common stock; or (iii)&nbsp;take such other actions as may be permitted by the Office of Thrift
Supervision and the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Possible Termination of the Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We must sell a minimum of 1,515,000 shares to complete the offering. If we do not sell the
minimum number of shares, or if we terminate the offering for any other reason, we will promptly
return all funds, with interest, at our current passbook rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>After-Market Performance of Mutual-to-Stock Conversions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The appraisal prepared by Keller &#038; Company includes examples of after-market stock price
performance for standard mutual-to-stock conversion offerings (i.e., excluding &#147;second step&#148;
conversions by mutual holding companies) completed during the 14-month period ended August&nbsp;19,
2009. The following table presents stock price appreciation information for all standard
mutual-to-stock conversions completed between June&nbsp;30, 2008 and August&nbsp;19, 2009. These companies
did not constitute the group of ten comparable public companies utilized in Keller &#038; Company&#146;s
valuation analysis.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Percentage Change From Initial Offering Price</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Issuer</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Size (In</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After 1</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After 1</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After 1</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Through</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>(Market/Symbol)</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>IPO</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>thousands)</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Day</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Week</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Month</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>August 19, 2009</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Danvers Bancorp, Inc. (DNBK)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/10/2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">171,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2.60</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3.10</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.60</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">27.10</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cape Bancorp, Inc. (CBNJ) (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/31/2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3.00</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(13.00</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Home Bancorp, Inc. (HBCP)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/30/2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">First Savings Financial Group,
Inc. (FSFG)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/07/2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1.00</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8.00</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.90</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Hibernia Homestead Bancorp, Inc.
(HIBE)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/28/2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">St. Joseph Bancorp, Inc. (SJBA)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/02/2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Territorial Bancorp Inc. (TBNK)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/13/2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD >&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Transactions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Median</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">High</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Low</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2.60</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3.10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8.00</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(13.00</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Simultaneously with its initial public offering, Cape Bancorp, Inc. also issued 5,429,507
shares of common stock to former shareholders of
Boardwalk Bancorp, Inc. in connection with its acquisition of Boardwalk Bancorp, Inc.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>This table is not intended to indicate how our stock may perform. Furthermore, this table
presents only short-term price performance with respect to a limited number of companies that have
only recently completed their initial public offerings and may not be indicative of the longer-term
stock price performance of these companies.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock price appreciation or depreciation is affected by many factors, including, but not
limited to: general market and economic conditions; the interest rate environment; the amount of
proceeds a company raises in its offering and its ability to successfully deploy those proceeds
through originating loans and making other investments; and numerous factors relating to the
specific company, including the experience and ability of management, historical and anticipated
operating results, the nature and quality of the company&#146;s assets, and the company&#146;s primary market
area. The companies listed in the table above may not be similar to Athens Bancshares Corporation,
the pricing ratios for their stock offerings were in some cases different from the pricing ratios
for Athens Bancshares Corporation&#146;s common stock and the market conditions in which these offerings
were completed were, in some cases, different from current market conditions. Any or all of these
differences may cause our stock to perform differently from these other offerings. Before you make
an investment decision, we urge you to carefully read this prospectus, including, but not limited
to, the section entitled <I>&#147;Risk Factors.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You also should be aware that, recently, stock prices of some thrift initial public offerings
have decreased once the stock has begun trading. We cannot assure you that our stock will not
trade below the $10.00 purchase price or that our stock will perform similarly to other recent
mutual to stock conversions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Conditions to Completing the Conversion and Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are conducting the conversion and offering under the terms of our plan of conversion. We
cannot complete the conversion and offering unless:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we sell at least the minimum number of shares offered;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we receive the final approval of the Office of Thrift Supervision to complete the
offering; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our members approve the plan of conversion.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Reasons for the Conversion and Offering (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary reasons for the conversion and offering are to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase the capital of Athens Federal Community Bank to support future lending and
operational growth;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enhance profitability and earnings through reinvesting and leveraging the proceeds,
primarily through traditional funding and lending activities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>support future branching activities and/or the acquisition of other financial
institutions or financial services companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>implement equity compensation plans to retain and attract qualified directors,
officers and staff to enhance the current incentive-based compensation programs; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase our philanthropic endeavors to the community we serve through the formation
and funding of the Athens Federal Foundation.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We Will Form the Athens Federal Foundation (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To continue our long-standing commitment to our local communities, we intend to establish a
charitable foundation, named the Athens Federal Foundation, as part of the conversion. Subject to
separate approval by at least a majority of votes eligible to be cast by members of Athens Federal
Community Bank, the charitable foundation will be funded with 100,000 shares of Athens Bancshares
Corporation common stock and $100,000 in cash. This contribution to the charitable foundation
would reduce net earnings by approximately $726,000, after tax, in the year in which the charitable
foundation is established, which is expected to be late 2009 or early 2010. The charitable
foundation will make grants and donations to non-profit and community groups and projects located
within our primary market area. The amount of common stock that we are offering for sale would be
greater if the conversion were to be completed without the formation of the charitable foundation.
For a further discussion of the financial impact of the charitable foundation, including its effect
on those who purchase shares in the offering and on the shares issued to shareholders of Athens
Bancshares Corporation, see <I>&#147;Comparison of Independent Valuation and Pro Forma Financial
Information With and Without the Foundation.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Benefits of the Offering to Management (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to adopt the following benefit plans and employment agreements:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Employee Stock Ownership Plan. </I></B>We have adopted an employee stock ownership plan that will
purchase in the conversion offering a number of shares of common stock equal to 8% of the sum of
the shares sold in the offering and contributed to the charitable foundation by means of a 15-year
loan from Athens Bancshares Corporation. As the loan is repaid and shares are released from
collateral, the plan will allocate shares to the accounts of participating employees. Participants
will receive allocations based on their individual compensation as a percentage of total plan
compensation. Non-employee directors are not eligible to participate in the employee stock
ownership plan. We will incur additional compensation expense as a result of this plan. See <I>&#147;Pro
Forma Data&#148; </I>for an illustration of the effects of this plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Future Equity Incentive Plan. </I></B>We intend to implement an equity incentive plan no earlier than
six months after completion of the conversion. If we implement the plan within one year after the
conversion, the plan must be approved by a majority of the total votes eligible to be cast by our
shareholders. If we implement the plan more than one year after the conversion, it must be
approved only by a majority of the total votes cast. Under this plan, we may award stock options
and shares of restricted stock to key employees and directors. We will award shares of restricted
stock at no cost to the recipient. We will grant stock options at an exercise price at least equal
to 100% of the fair market value of our common stock on the option grant date. We will incur
additional compensation expense as a result of this plan. See <I>&#147;Pro Forma Data&#148; </I>for an illustration
of the effects of this plan. Under this
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">plan, we may grant stock options in an amount up to 10% of the sum of the number of shares sold in
the offering and contributed to the charitable foundation, and we may grant awards of restricted
stock in an amount up to 4% of the sum of the number of shares sold in the offering and contributed
to the charitable foundation. The equity incentive plan will comply with all applicable Office of
Thrift Supervision regulations except to the extent waived by the Office of Thrift Supervision.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table represents the total value of all shares to be available for restricted
stock awards under the equity incentive plan, based on a range of market prices from $8.00 per
share to $14.00 per share. The value of the grants will depend on the actual trading price of our
common stock at the time of grant.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Value of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>100,510</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>64,600</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>76,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>87,400</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Awarded at</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Awarded at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Awarded at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Awarded at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>15% Above</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Share Price</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>(In thousands, except per share amounts)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">8.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">517</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">608</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">699</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">804</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">646</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">760</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">874</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">775</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">912</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,049</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,206</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">904</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,064</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,224</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,407</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="19" nowrap valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the total value of all stock options available for grant under
the equity incentive plan, based on a range of market prices from $8.00 per share to $14.00 per
share. For purposes of this table, the value of the stock options was determined using the
Black-Scholes option-pricing formula. See <I>&#147;Pro Forma Data.&#148; </I>Financial gains can be realized on a
stock option only if the market price of the common stock increases above the exercise price at
which the option is granted.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Value of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>251,275</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>161,500</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>190,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>218,500</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted at</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>15% Above</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exercise Price</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Option Value</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>(In thousands, except per share amounts)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">8.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">3.32</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">536</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">631</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">725</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">834</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">670</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">789</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">907</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,043</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.98</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">804</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">946</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,089</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,251</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5.81</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">938</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,104</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,269</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,460</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="23" nowrap valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes at the maximum of the offering range the total number and value
of the shares of common stock that the employee stock ownership plan expects to acquire and the
total value of all restricted stock awards and stock options that are expected to be available
under the equity incentive plan. At the maximum of the offering range, we would sell 2,085,000
shares and have 2,185,000 shares outstanding after accounting for the 100,000 shares of common
stock to be contributed to the charitable foundation. The number of shares reflected for the
benefit plans in the table below assumes that Athens Federal Community Bank&#146;s tangible capital will
be 10% or more following the completion of the offering and the application of the net proceeds as
described under <I>&#147;Use of Proceeds.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Number of Shares to be</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Granted or Purchased</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>As a % of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>At Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>As a % of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Sold at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Estimated</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Range</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Range</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value of Grants</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">174,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,748</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restricted stock awards (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">874</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock options (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">907</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">480,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">23.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">22.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,529</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the value of Athens Bancshares Corporation common stock is $10.00 per share for
purposes of determining the total estimated value of the grants.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the value of a stock option is $4.15, which was determined using the Black-Scholes
option-pricing formula. See <I>&#147;Pro Forma Data.&#148;</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Employment Agreements. </I></B>Athens Bancshares Corporation and Athens Federal Community Bank intend
to enter into three-year employment agreements with Jeffrey L. Cunningham, our President and Chief
Executive Officer, Michael R. Hutsell, our Vice President, Chief Operating Officer and Chief
Financial Officer, and Jay Leggett, Jr, City President of our Cleveland Division. Based solely on
current cash compensation and excluding any benefits that would be payable under any employee
benefit plan, if a change in control of Athens Bancshares Corporation occurred and we terminated
Messrs.&nbsp;Cunningham, Hutsell and Leggett the total payments due under the employment agreements
would be approximately $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The Offering Will Not Be Taxable to Persons Receiving or Exercising Subscription Rights (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a general matter, the offering will not be a taxable transaction for purposes of federal
income taxes to persons who receive or exercise subscription rights. We have received an opinion
from our special counsel, Kilpatrick Stockton LLP, that, for federal income tax purposes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it is more likely than not that the members of Athens Federal Community Bank will
not realize any income upon the issuance or exercise of subscription rights;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it is more likely than not that the tax basis to the purchasers in the offering will
be the amount paid for our common stock, and that the holding period for shares of
common stock will begin on the date of completion of the subscription offering; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the holding period for shares of common stock purchased in the community offering or
syndicated community offering will begin on the day after the date of completion of the
purchase.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Persons Who May Order Stock in the Offering (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Note: Subscription rights are not transferable, and persons with subscription rights may not
subscribe for shares for the benefit of any other person. If you violate this prohibition, you may
lose your rights to purchase shares and may face criminal prosecution and/or other sanctions.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have granted rights to subscribe for shares of Athens Bancshares Corporation common stock
in a &#147;subscription offering&#148; to the following persons in the following order of priority:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persons with $50 or more on deposit at Athens Federal Community Bank as of the
close of business on March&nbsp;31, 2008.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our employee stock ownership plan, which will provide retirement benefits to
our employees.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persons (other than our directors and officers) with $50 or more on deposit at
Athens Federal Community Bank as of the close of business on September&nbsp;30, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Athens Federal Community Bank&#146;s depositors as of the close of business on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> who were not able to subscribe for shares under categories 1 or 3 and
borrowers of Athens Federal Community Bank as of May&nbsp;1, 1999 whose borrowings still
exist as of the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we receive subscriptions for more shares than are to be sold in this offering, we may be
unable to fill or may only partially fill your order. Shares will be allocated in order of the
priorities described above under a formula outlined in the plan of conversion. Generally, shares
first will be allocated so as to permit each eligible subscriber, if possible, to purchase a number
of shares sufficient to make the subscriber&#146;s total allocation equal to 100 shares or the number of
shares actually subscribed for, whichever is less. After that, unallocated shares will be
allocated among the remaining eligible subscribers whose subscriptions remain unfilled in
proportion to the amounts that their respective qualifying deposits bear to the total qualifying
deposits of all remaining eligible subscribers whose subscriptions remain unfilled. If we increase
the number of shares to be sold above 2,085,000, the employee stock ownership plan will have the
first priority right to purchase any shares exceeding that amount to the extent that its
subscription has not previously been filled. Any shares remaining will be allocated in the order
of priorities described above. See <I>&#147;The Conversion and Stock Offering &#151; Subscription Offering and
Subscription Rights&#148;</I>
for a description of the allocation procedure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may offer shares not sold in the subscription offering, if any, to the general public in a
community offering. People and trusts for the benefit of people who are residents of Blount,
Bradley, Hamilton, Knox, Loudon, McMinn, Meigs, Monroe and Polk Counties in Tennessee will be given
a preference to purchase shares in the community offering. We may, in our sole discretion, reject
orders received in the community offering either in whole or in part. For example, we would reject
an order submitted by a person whom we believe is making false representations or whom we believe
is attempting to violate, evade or circumvent the terms and conditions of the plan of conversion.
If your order is rejected in part, you cannot cancel the remainder of your order. The community
offering may commence concurrently with the subscription offering or at any time thereafter and may
terminate at any time without notice until <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, unless the Office of Thrift Supervision
approves a later date, which will not be beyond <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares not sold in the subscription offering or the community offering may be offered for sale
in a syndicated community offering, which would be an offering to the general public on a best
efforts basis managed by Keefe, Bruyette &#038; Woods, Inc. Any syndicated community offering may
terminate at any time without notice but not later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, unless the Office of Thrift
Supervision approves a later date, which will not be beyond <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. As in the case of the
community offering, we may, in our sole discretion, reject orders received in the syndicated
community offering either in whole or in part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Deadline for Ordering Stock (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
subscription offering will end at &#95;&#95;&#95;:&#95;&#95;&#95; p.m., Eastern time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. We expect
that the community offering will terminate at the same time, although it may continue for up to 45
days after the end of the subscription offering, or longer if the Office of Thrift Supervision
approves a later date. No single extension may be for more than 90&nbsp;days. If we extend the
offering beyond <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, or if we intend to sell fewer than 1,515,000 shares or more than
2,412,750 shares, all subscribers will be notified and given the opportunity to confirm, change or
cancel their orders. If you do not respond to this notice, we will return your funds promptly with
interest at our passbook rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purchase Limitations (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our plan of conversion establishes limitations on the purchase of stock in the offering.
These limitations include the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The minimum purchase is 25 shares.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No individual (or individuals on a single deposit account) may purchase more than
$300,000 of common stock (which equals 30,000 shares) in the subscription offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No individual may purchase more than $300,000 of common stock (which equals 30,000
shares) in the community offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No individual, no individual together with any associates, and no group of persons
acting in concert may purchase more than $500,000 of common stock (which equals 50,000
shares) in all offering categories.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the Office of Thrift Supervision&#146;s approval, we may increase or decrease the
purchase limitations at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>How to Purchase Common Stock (page _____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you want to place an order for shares in the offering, you must complete an original stock
order and certification form and send it to us together with full payment, or deliver it in person
to the stock information center located at Athens Federal Community Bank&#146;s main office in Athens,
Tennessee. We must receive your stock order and certification form before the end of the
subscription offering or the end of the community offering, as appropriate. Once we receive your
order, you cannot cancel or change it without our consent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To ensure that we properly identify your subscription rights, you must list all of your
deposit accounts as of the applicable eligibility date on the stock order form. If you fail to do
so, your subscription may be reduced or rejected if the offering is oversubscribed. To preserve
your purchase priority, only the name(s) of person(s) listed on your deposit account at the
applicable date of eligibility may be listed on your order form. You may not add the names of
others who were not eligible to purchase common stock in the offering on the applicable date of
eligibility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may pay for shares in the subscription offering or the community offering in either of the
following ways:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>By check or money order made payable to Athens Bancshares Corporation; or</I></B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>By authorizing withdrawal from an account at Athens Federal Community Bank.</I></B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To use funds in an Individual Retirement Account at Athens Federal Community Bank, you must
transfer your account to an unaffiliated institution or broker and open a self-directed Individual
Retirement Account. Individual Retirement Accounts at Athens Federal Community Bank are not
self-directed and common stock may only be purchased using a self-directed Individual Retirement
Account. Please contact your broker or financial institution as quickly as possible to determine
if you may transfer your Individual Retirement Account from Athens Federal Community Bank because
the transfer may take several days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay interest on your subscription funds at the rate we pay on passbook accounts, which
is currently 0.3% per annum, from the date we receive your funds until the offering is completed or
terminated. All funds authorized for withdrawal from deposit accounts with us will earn interest
at the applicable account rate until the offering is completed or terminated. If, as a result of a
withdrawal from a certificate of deposit, the balance falls below the minimum balance requirement,
the remaining funds will earn interest at our passbook rate. <B>There will be no early withdrawal
penalty for withdrawals from certificates of deposit used to pay for stock.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>How We Will Use the Proceeds of this Offering (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes how we will use the proceeds of this offering, based on the
sale of shares at the minimum and maximum of the offering range.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Minimum 1,515,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum 2,085,000</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at $10.00 Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at $10.00 Per Share</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net offering proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds contributed to Athens Federal Community Bank</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,835</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds used for loan to employee stock ownership plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,748</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds contributed to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds remaining for Athens Bancshares Corporation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,987</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation may use the portion of the proceeds that it retains to, among
other things, invest in securities, pay cash dividends or repurchase shares of common stock,
subject to regulatory restrictions. Athens Federal Community Bank may use the portion of the
proceeds that it receives to fund new loans, open new branches, invest in securities and expand its
business activities. Athens Bancshares Corporation and Athens Federal Community Bank may also use
the proceeds of the offering to diversify their businesses and acquire other companies, although we
have no specific plans to do so at this time. Except as described above, neither Athens Bancshares
Corporation nor Athens Federal Community Bank has any specific plans for the investment of the
proceeds of this offering and has not allocated a specific portion of the proceeds to any
particular use. For a discussion of our business reasons for undertaking this offering, see <I>&#147;The
Conversion and Stock Offering &#151; Reasons for the Conversion.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purchases by Directors and Executive Officers (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect that our directors and executive officers, together with their associates, will
subscribe for 293,750 shares, which equals 19.4% of the shares that would be sold at the minimum of
the offering range. Our directors and executive officers, together with their associates, will pay
the same $10.00 price per share as everyone else who purchases shares in the offering. Like all of
our depositors, our directors and executive officers and their associates have subscription rights
based on their deposits and, if there is an oversubscription, their orders will be subject to the
allocation provisions set forth in our plan of conversion, unless waived by the Office of Thrift
Supervision. Purchases by our directors and executive officers and their associates will count
towards the minimum number of shares we must sell to close the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Market for Athens Bancshares Corporation&#146;s Common Stock (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have received conditional approval to list the common stock of Athens Bancshares
Corporation for trading on the Nasdaq Capital Market under the symbol &#147;AFCB.&#148; Keefe, Bruyette &#038;
Woods, Inc. currently intends to become a market maker in the common stock, but it is under no
obligation to do so. In addition, if needed, Keefe, Bruyette &#038; Woods, Inc. will assist us in
obtaining additional market makers. We cannot assure you that other market makers will be obtained
or that an active and liquid trading market for our common stock will develop or, if developed,
will be maintained. After shares of the common stock begin trading, you may contact a stock broker
to buy or sell shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Athens Bancshares Corporation&#146;s Dividend Policy (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the offering, we intend to adopt a policy of paying regular cash dividends. Our ability
to pay dividends will depend on a number of factors, including capital requirements, regulatory
limitations and our operating results and financial condition.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Delivery of Prospectus</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>To ensure that each person receives a prospectus at least 48 hours before the offering
deadline, we may not mail prospectuses any later than five days before such date or hand-deliver
prospectuses later than two days before that date. Stock order forms may only be delivered if
accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order
form by means other than U.S. mail.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will make reasonable attempts to provide a prospectus and offering materials to holders of
subscription rights. The subscription offering and all subscription rights will expire at &#95;&#95;&#95;:&#95;&#95;&#95;
p.m., Eastern time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> whether or not we have been able to locate each person
entitled to subscription rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Delivery of Stock Certificates (page ____)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificates representing shares of common stock issued in the offering will be mailed to
purchasers at the address provided by them on the order form as soon as practicable following
completion of the offering. <B>Until certificates for common stock are available and delivered to
subscribers, subscribers may not be able to sell their shares, even though trading of the common
stock will have commenced.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stock Information Center</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you have any questions regarding the offering, please call the stock information center at
(&#95;&#95;&#95;) &#95;&#95;&#95;-&#95;&#95;&#95;&#95;&#95;&#95; to speak to a registered representative of Keefe, Bruyette &#038; Woods, Inc. The stock
information center is open
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;</U>. The stock information center is closed on bank holidays.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="130"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Risk Factors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>You should consider carefully the following risk factors before purchasing Athens Bancshares
Corporation common stock.</I></B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks Related to Our Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our concentration in non-owner occupied real estate loans may expose us to increased credit risk.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, $19.3&nbsp;million, or 24.1% of our residential mortgage loan portfolio and 9.9%
of our total loan portfolio, consisted of loans secured by non-owner occupied residential
properties. Loans secured by non-owner occupied properties generally expose us to greater risk of
non-payment and loss than loans secured by owner occupied properties because the repayment of such
loans depends primarily on the tenant&#146;s continuing ability to pay rent to the property owner, who
is our borrower, or, if the property owner is unable to find a tenant, the property owner&#146;s ability
to repay the loan without the benefit of a rental income stream. In addition, the physical
condition of non-owner occupied properties is often below that of owner occupied properties due to
lax property maintenance standards, which has a negative impact on the value of the collateral
properties. Furthermore, some of our non-owner occupied residential loan borrowers have more than
one loan outstanding with us. Consequently, an adverse development with respect to one credit
relationship may expose us to a greater risk of loss compared to an adverse development with
respect to an owner occupied residential mortgage loan. At June&nbsp;30, 2009, non-performing
non-owner occupied residential mortgage loans totaled $560,000, or 2.9% of our non-owner occupied
residential loan portfolio, of which $473,000 was attributable to a single borrower. At June&nbsp;30,
2009, we did not hold any non-owner occupied residential properties as real estate owned. For more
information about the credit risk we face, see <I>&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations &#151; Risk Management.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our construction loan and land and land development loan portfolios may expose us to increased
credit risk.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, $29.4&nbsp;million, or 15.1% of our loan portfolio, consisted of construction
loans and land and land development loans, and $2.2&nbsp;million, or 18.0% of the construction loan
portfolio, consisted of speculative construction loans. While recently the demand for construction
loans has decreased significantly due to the decline in the housing market, historically,
construction loans, including speculative construction loans, have been a material part of our loan
portfolio. Speculative construction loans are loans made to builders who have not identified a
buyer for the completed property at the time of loan origination. Subject to market conditions, we
intend to continue to emphasize the origination of construction loans and land and land development
loans. These loan types generally expose a lender to greater risk of nonpayment and loss than
residential mortgage loans because the repayment of such loans often depends on the successful
operation or sale of the property and the income stream of the borrowers and such loans typically
involve larger balances to a single borrower or groups of related borrowers. In addition, many
borrowers of these types of loans have more than one loan outstanding with us so an adverse
development with respect to one loan or credit relationship can expose us to significantly greater
risk of non-payment and loss. Furthermore, we may need to increase our allowance for loan losses
through future charges to income as the portfolio of these types of loans grows, which would
decrease our earnings. For more information about the credit risk we face, see <I>&#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations &#151; Risk Management.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our consumer loan portfolio includes consumer loans secured by rapidly depreciable assets and may
expose us to increased credit risk.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, $25.8&nbsp;million, or 13.2% of our loan portfolio, consisted of consumer loans.
Included in consumer loans at that date were $4.6&nbsp;million in automobile loans and $2.2&nbsp;million in
consumer finance loans made to borrowers by our operating subsidiary, Southland Finance, Inc.
These consumer finance loans are generally secured by used automobiles, televisions and various
other personal property and are generally offered to borrowers with historically lower credit
scores at higher risk-adjusted interest rates. At June&nbsp;30, 2009, Southland Finance, Inc.&#146;s average
outstanding loan balance was approximately $3,700 and the weighted-average yield of its loan
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">portfolio was 25.6%. Consumer loans secured by rapidly depreciable assets such as automobiles and
other personal property may be subject to greater risk of loss than loans secured by real estate
because any repossessed collateral for a defaulted consumer loan may not provide an adequate source
of repayment of the outstanding loan balance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Significant loan losses could require us to increase our allowance for loan losses through a charge
to earnings.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When we loan money we incur the risk that our borrowers do not repay their loans. We reserve
for loan losses by establishing an allowance through a charge to earnings. The amount of this
allowance is based on our assessment of loan losses inherent in our loan portfolio. The process for
determining the amount of the allowance is critical to our financial results and condition. It
requires subjective and complex judgments about the future, including forecasts of economic or
market conditions that might impair the ability of our borrowers to repay their loans. We might
underestimate the loan losses inherent in our loan portfolio and have loan losses in excess of the
amount reserved. We might increase the allowance because of changing economic conditions. For
example, in a rising interest rate environment, borrowers with adjustable-rate loans could see
their payments increase. There may be a significant increase in the number of borrowers who are
unable or unwilling to repay their loans, resulting in our charging off more loans and increasing
our allowance. In addition, when real estate values decline, the potential severity of loss on a
real estate-secured loan can increase significantly, especially in the case of loans with high
combined loan-to-value ratios. The recent decline in the national economy and the local economies
of the areas in which the loans are concentrated could result in an increase in loan delinquencies,
foreclosures or repossessions resulting in increased charge-off amounts and the need for additional
loan loss allowances in future periods. In addition, our determination as to the amount of our
allowance for loan losses is subject to review by our primary regulator, the Office of Thrift
Supervision, as part of its examination process, which may result in the establishment of an
additional allowance based upon the judgment of the Office of Thrift Supervision after a review of
the information available at the time of its examination. Our allowance for loan losses amounted
to $2.8&nbsp;million, or 1.39% of total loans outstanding and 345.04% of nonperforming loans, at June
30, 2009. Our allowance for loan losses at June&nbsp;30, 2009 may not be sufficient to cover future
loan losses. A large loss could deplete the allowance and require increased provisions to replenish
the allowance, which would decrease our earnings. In addition, at June&nbsp;30, 2009, we had 32 loan
relationships with outstanding balances that exceeded $1.0&nbsp;million, all of which were performing
according to their original terms. However, the deterioration of one or more of these loans could
result in a significant increase in our nonperforming loans and our provision for loan losses,
which would negatively impact our results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>A continuation of recent turmoil in the financial markets could have an adverse effect on our
financial position or results of operations.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning in 2008, United States and global financial markets have experienced severe
disruption and volatility, and general economic conditions have declined significantly. Adverse
developments in credit quality, asset values and revenue opportunities throughout the financial
services industry, as well as general uncertainty regarding the economic, industry and regulatory
environment, have had a marked negative impact on the industry. Dramatic declines in the U.S.
housing market over the past eighteen months, with falling home prices, increasing foreclosures and
increasing unemployment, have negatively affected the credit performance of mortgage loans and
resulted in significant write-downs of asset values by many financial institutions. The United
States and the governments of other countries have taken steps to try to stabilize the financial
system, including investing in financial institutions, and have also been working to design and
implement programs to improve general economic conditions. Notwithstanding the actions of the
United States and other governments, there can be no assurances that these efforts will be
successful in restoring industry, economic or market conditions and that they will not result in
adverse unintended consequences. Factors that could continue to pressure financial services
companies, including Athens Bancshares Corporation, are numerous and include (i)&nbsp;worsening credit
quality, leading among other things to increases in loan losses and reserves, (ii)&nbsp;continued or
worsening disruption and volatility in financial markets, leading among other things to continuing
reductions in asset values, (iii)&nbsp;capital and liquidity concerns regarding financial institutions
generally, (iv)&nbsp;limitations resulting from or imposed in connection with governmental actions
intended to stabilize or provide additional regulation of the financial system, or (v)&nbsp;recessionary
conditions that are deeper or last longer than currently anticipated.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The current economic recession could result in increases in our level of non-performing loans
and/or reduce demand for our products and services, which would lead to lower revenue, higher loan
losses and lower earnings.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business activities and earnings are affected by general business conditions in the United
States and in our local market area. These conditions include short-term and long-term interest
rates, inflation, unemployment levels, monetary supply, consumer confidence and spending,
fluctuations in both debt and equity capital markets and the strength of the economy in the United
States generally and in our market area in particular. In the current recession, the national
economy has experienced general economic downturns, with rising unemployment levels, declines in
real estate values and an erosion in consumer confidence. A prolonged or more severe economic
downturn, continued elevated levels of unemployment, further declines in the values of real estate,
or other events that affect household and/or corporate incomes could impair the ability of our
borrowers to repay their loans in accordance with their terms. Nearly all of our loans are secured
by real estate or made to businesses in our primary market area, which consists of McMinn, Monroe
and Bradley Counties in Tennessee and the surrounding areas. As a result of this concentration, a
prolonged or more severe downturn in the local economy could result in significant increases in
nonperforming loans, which would negatively impact our interest income and result in higher
provisions for loan losses, which would decrease our earnings. The economic downturn could also
result in reduced demand for credit or fee-based products and services, which also would decrease
our revenues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Special Federal Deposit Insurance Corporation assessments and increased base assessment rates by
the Federal Deposit Insurance Corporation will decrease our earnings.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning in late 2008, the economic environment caused higher levels of bank failures, which
dramatically increased Federal Deposit Insurance Corporation resolution costs and led to a
significant reduction in the Deposit Insurance Fund. As a result, the Federal Deposit Insurance
Corporation has significantly increased the initial base assessment rates paid by financial
institutions for deposit insurance. The base assessment rate was increased by seven basis points
(7 cents for every $100 of deposits) for the first quarter of 2009. Effective April&nbsp;1, 2009,
initial base assessment rates were changed to range from 12 basis points to 45 basis points across
all risk categories with possible adjustments to these rates based on certain debt-related
components. These increases in the base assessment rate will increase our deposit insurance costs
and negatively impact our earnings. In addition, in May&nbsp;2009, the Federal Deposit Insurance
Corporation imposed a special assessment on all insured institutions due to recent bank and
savings association failures. The emergency assessment amounts to 5 basis points on each
institution&#146;s assets minus Tier 1 capital as of June&nbsp;30, 2009, subject to a maximum equal to 10
basis points times the institution&#146;s assessment base. The assessment will be collected on
September&nbsp;30, 2009. Based on our assets and Tier 1 capital as of June&nbsp;30, 2009, our special
assessment is approximately $109,000. The special assessment will decrease our earnings. In
addition, the Federal Deposit Insurance Corporation may impose additional emergency special
assessments after June&nbsp;30, 2009, of up to 5 basis points per quarter on each institution&#146;s assets
minus Tier 1 capital if necessary to maintain public confidence in federal deposit insurance or as
a result of deterioration in the Deposit Insurance Fund reserve ratio due to institution failures.
The earliest possible date for imposing any such additional special assessment is September&nbsp;30,
2009, with collection on December&nbsp;31, 2009. The latest date possible for imposing any such
additional special assessment is December&nbsp;31, 2009, with collection on March&nbsp;31, 2010. Any
additional emergency special assessment imposed by the Federal Deposit Insurance Corporation will
further decrease our earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Changing interest rates may decrease our earnings and asset value.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our net interest income is the interest we earn on loans and investments less the interest we
pay on our deposits and borrowings. Our net interest margin is the difference between the yield we
earn on our assets and the interest rate we pay for deposits and our other sources of funding.
Changes in interest rates&#151;up or down&#151;could adversely affect our net interest margin and, as a
result, our net interest income. Although the yield we earn on our assets and our funding costs
tend to move in the same direction in response to changes in interest rates, one can rise or fall
faster than the other, causing our net interest margin to expand or contract. Our liabilities tend
to be shorter in duration than our assets, so they may adjust faster in response to changes in
interest rates. As a result, when interest rates rise, our funding costs may rise faster than the
yield we earn on our assets, causing our net interest margin to contract until the yield catches
up. This contraction could be more severe following a prolonged period of lower interest rates, as
a larger proportion of our fixed rate residential loan portfolio will have been originated at those
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">lower rates and borrowers may be more reluctant or unable to sell their homes in a higher
interest rate environment. Changes in the slope of the &#147;yield
curve&#148;&#151;or the spread between
short-term and long-term interest rates&#151;could also reduce our net interest margin. Normally, the
yield curve is upward sloping, meaning short-term rates are lower than long-term rates. Because our
liabilities tend to be shorter in duration than our assets, when the yield curve flattens or even
inverts, we could experience pressure on our net interest margin as our cost of funds increases
relative to the yield we can earn on our assets. For further discussion of how changes in interest
rates could impact us, see <I>&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results
of Operations &#151;Risk Management &#151; Interest Rate Risk Management.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Strong competition within our primary market area could negatively impact our profits and slow
growth.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face intense competition both in making loans and attracting deposits. This competition
has made it more difficult for us to make new loans and attract deposits. Price competition for
loans and deposits might result in us earning less on our loans and paying more on our deposits,
which would reduce net interest income. Competition also makes it more difficult to grow loans and
deposits. At June&nbsp;30, 2008, which is the most recent date for which data is available from the
Federal Deposit Insurance Corporation, we held approximately 20.2% of the deposits in McMinn
County, Tennessee, 3.2% of the deposits in Monroe County, Tennessee and 1.1% of the deposits in
Bradley County, Tennessee. Some of the institutions with which we compete have substantially
greater resources and lending limits than we have and may offer services that we do not provide.
We expect competition to increase in the future as a result of legislative, regulatory and
technological changes and the continuing trend of consolidation in the financial services industry.
Our profitability depends upon our continued ability to compete successfully in our primary market
area. See <I>&#147;Our Business &#151; Market Area&#148; </I>and <I>&#147;Our Business &#151; Competition&#148; </I>for more information
about our primary market area and the competition we face.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We operate in a highly regulated environment and we may be adversely affected by changes in laws
and regulations.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to extensive regulation, supervision and examination by the Office of Thrift
Supervision, our chartering authority, and by the Federal Deposit Insurance Corporation, as insurer
of our deposits. Athens Bancshares Corporation also will be subject to regulation and supervision
by the Office of Thrift Supervision. Such regulation and supervision governs the activities in
which an institution and its holding company may engage, and are intended primarily for the
protection of the insurance fund and the depositors and borrowers of Athens Federal Community Bank
rather than for holders of Athens Bancshares Corporation common stock. Regulatory authorities have
extensive discretion in their supervisory and enforcement activities, including the imposition of
restrictions on our operations, the classification of our assets and determination of the level of
our allowance for loan losses. If our regulators require us to charge-off loans or increase our
allowance for loan losses, our earnings would suffer. Any change in such regulation and oversight,
whether in the form of regulatory policy, regulations, legislation or supervisory action, may have
a material impact on our operations. For a further discussion, see <I>&#147;Regulation and Supervision.&#148;</I>
The current administration has also proposed comprehensive legislation intended to modernize
regulation of the United States financial system. The proposed legislation contains several
provisions that would have a direct impact on Athens Bancshares Corporation and Athens Federal
Bank. Under the proposed legislation, the federal savings association charter would be eliminated
and the Office of Thrift Supervision would be consolidated with the Comptroller of the Currency
into a new regulator, the National Bank Supervisor. The proposed legislation would also require
Athens Federal Community Bank to become a national bank or convert to a state-chartered
institution. In addition, it would eliminate the status of &#147;savings and loan holding company&#148; and
mandate that all companies that control an insured depository institution register as a bank
holding company. Registration as a bank holding company would represent a significant change, as
material differences currently exist between savings and loan holding company and bank holding
company supervision and regulation. For example, bank holding companies above a specified asset
size are subject to consolidated leverage and risk-based capital requirements whereas savings and
loan holding companies are not subject to such requirements. The proposed legislation would also
create a new federal agency, the Consumer Financial Protection Agency, that would be dedicated to
administering and enforcing fair lending and consumer compliance laws with respect to financial
products and services, which could result in new regulatory requirements and increased regulatory
costs for us. If enacted, the legislation may have a substantial impact on our operations.
However, because any final legislation
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">may differ significantly from the current administration&#146;s proposal, the specific effects of the
legislation cannot be evaluated at this time.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks Related to this Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our stock price may decline when trading commences.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you purchase shares in the offering, you may not be able to sell them at or above the
$10.00 purchase price. After the shares of our common stock begin trading, the trading price of
the common stock will be determined by the marketplace, and will be influenced by many factors
outside of our control, including prevailing interest rates, investor perceptions, securities
analyst research reports and general industry, geopolitical and economic conditions. Publicly
traded stocks, including stocks of financial institutions, often experience substantial market
price volatility. These market fluctuations might not be related to the operating performance of
particular companies whose shares are traded. Additionally, the stock prices of many recently
converted thrift institutions have declined below, and remain below, their initial offering prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>There may be a limited market for our common stock, which may adversely affect our stock price.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we have received conditional approval to list our shares of common stock for trading
on the Nasdaq Capital Market, there is no guarantee that the shares will be actively traded. If an
active trading market for our common stock does not develop, you may not be able to sell all of
your shares of common stock on short notice and the sale of a large number of shares at one time
could temporarily depress the market price. There also may be a wide spread between the bid and
asked price for our common stock. When there is a wide spread between the bid and asked price, the
price at which you may be able to sell our common stock may be significantly lower than the price
at which you could buy it at that time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Additional expenses following the offering from operating as a public company and from new equity
benefit plans will adversely affect our profitability.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following the offering, our noninterest expenses are likely to increase as a result of the
financial accounting, legal and various other additional expenses usually associated with operating
as a public company and complying with public company disclosure obligations, particularly those
obligations imposed by the Sarbanes-Oxley Act of 2002. Compliance with the Sarbanes-Oxley Act of
2002 will require us to upgrade our accounting systems, which will increase our operating expenses.
We also will recognize additional annual employee compensation and benefit expenses stemming from
options and shares granted to employees, directors and executives under new benefit plans. These
additional expenses will adversely affect our profitability. We cannot determine the actual amount
of these new stock-related compensation and benefit expenses at this time because applicable
accounting practices generally require that they be based on the fair market value of the options
or shares of common stock at the date of the grant; however, we expect them to be material. We
will recognize expenses for our employee stock ownership plan when shares are committed to be
released to participants&#146; accounts and will recognize expenses for restricted stock awards and
stock options generally over the vesting period of awards made to recipients. These benefit
expenses in the first year following the offering have been estimated to be approximately $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
at the maximum of the offering range as set forth in the pro forma financial information under <I>&#147;Pro
Forma Data&#148; </I>assuming the $10.00 per share purchase price as fair market value. Actual expenses,
however, may be higher or lower, depending on the price of our common stock. For further
discussion of these plans, see <I>&#147;Our Management &#151; Benefit Plans.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our low return on equity may negatively impact the value of our common stock.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Return on equity, which equals net income divided by average equity, is a ratio used by many
investors to compare the performance of a particular company with other companies. For the six
months ended June&nbsp;30, 2009, our annualized return on equity was 8.68% and our return on equity for
the year ended December&nbsp;31, 2008 was 4.72%. Our pro forma return on equity for the same periods is
estimated to be 2.04% and 2.28%, respectively, and our pro forma shareholders&#146; equity to assets
ratio at June&nbsp;30, 2009 is estimated to be 16.4%, assuming the sale of shares at the maximum of the
offering range. Our publicly traded thrift peers used in the valuation as of August&nbsp;19, 2009 had
an average return on equity of 3.81% for the twelve months ended June&nbsp;30, 2009. Over time, we
intend to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">use the net proceeds from this offering to increase earnings per share and book value per share,
without assuming undue risk, with the goal of achieving a return on equity that is competitive with
other publicly held companies. This goal could take a number of years to achieve, and it may not
be attained, and the expected increase in our noninterest expenses following the offering due to
operating as a public company and from new equity benefit plans will likely further deter our
ability to achieve a competitive return on equity. Consequently, you should not expect a
competitive return on equity in the near future. Failure to achieve a competitive return on equity
might make an investment in our common stock unattractive to some investors and might cause our
common stock to trade at lower prices than comparable companies with higher returns on equity. See
<I>&#147;Pro Forma Data&#148; </I>for an illustration of the financial impact of this offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We have broad discretion in allocating the proceeds of the offering. Our failure to effectively
utilize such proceeds would reduce our profitability.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to contribute approximately 50% of the net proceeds of the offering to Athens
Federal Community Bank. Athens Bancshares Corporation may use the portion of the proceeds that it
retains to, among other things, invest in securities, pay cash dividends or repurchase shares of
common stock, subject to regulatory restrictions. Athens Federal Community Bank may use the
portion of the proceeds that it receives to fund new loans, open new branches, invest in securities
and expand its business activities. Athens Bancshares Corporation and Athens Federal Community
Bank may also use the proceeds of the offering to diversify their businesses and acquire other
companies, although we have no specific plans to do so at this time. We have not allocated
specific amounts of proceeds for any of these purposes, and we will have significant flexibility in
determining how much of the net proceeds we apply to different uses and the timing of such
applications. Our failure to utilize these funds effectively would reduce our profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>A significant percentage of our common stock will be held by our directors and executive officers
and benefit plans.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect that our directors and executive officers, together with their associates, will
subscribe for 293,750 shares in the offering. In addition, we intend to establish an employee
stock ownership plan that will purchase an amount of shares equal to 8.0% of the sum of the shares
sold in the offering and contributed to the Athens Federal Foundation. As a result, upon
consummation of the offering, a total of up to 422,950, or 26.2%, and 468,550, or 21.4%, of our
outstanding shares will be held by our directors and executive officers and our employee stock
ownership plan at the minimum and maximum of the offering range, respectively. Further, shares
will be held by management following the implementation of an equity incentive plan, which we
intend to implement no earlier than six months following the completion of the offering. The
charter and bylaws of Athens Bancshares Corporation contain supermajority voting provisions that
require that the holders of at least 80% of Athens Bancshares Corporation&#146;s outstanding shares of
voting stock approve certain actions including, but not limited to, the consummation of a business
combination with an interested shareholder, the removal of a director and the amendment of certain
provisions of Athens Bancshares Corporation&#146;s charter and bylaws. If our directors and executive
officers and benefit plans hold more than 20% of our outstanding common stock following the
completion of the offering, the shares held by these individuals and benefit plans could be voted
in a manner that would ensure that the 80% supermajority needed to approve such actions could not
be attained. For more information on the restrictions included in the charter and bylaws of Athens
Bancshares Corporation, see <I>&#147;Restrictions on the Acquisition of Athens Bancshares Corporation and
Athens Federal Community Bank.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Issuance of shares for benefit programs may dilute your ownership interest.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to adopt an equity incentive plan following the offering. If shareholders approve
the new equity incentive plan, we intend to issue shares to our officers, employees and directors
through this plan. If the restricted stock awards under the equity incentive plan are funded from
authorized but unissued stock, your ownership interest in the shares could be diluted by up to
approximately 3.85%, assuming awards of common stock equal to 4% of the sum of the shares sold in
the offering and contributed to the Athens Federal Foundation are awarded under the plan. If the
shares issued upon the exercise of stock options under the equity incentive plan are issued from
authorized but unissued stock, your ownership interest in the shares could be diluted by up to
approximately 9.1%, assuming stock option grants equal to 10% of the sum of the shares sold in the
offering and contributed to the Athens Federal Foundation are granted under the plan. See <I>&#147;Pro
Forma Data&#148; </I>and <I>&#147;Our Management &#151; Benefit Plans.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The charter and bylaws of Athens Bancshares Corporation and certain regulations may prevent or make
more difficult certain transactions, including a sale or merger of Athens Bancshares Corporation.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions of the charter and bylaws of Athens Bancshares Corporation and federal banking
regulations may make it more difficult for companies or persons to acquire control of Athens
Bancshares Corporation. Consequently, our shareholders may not have the opportunity to participate
in such a transaction and the trading price of our common stock may not rise to the level of other
institutions that are more vulnerable to hostile takeovers. The factors that may discourage
takeover attempts or make them more difficult include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Charter and bylaws</I>. Provisions of the charter and bylaws of Athens Bancshares
Corporation may make it more difficult and expensive to pursue a takeover attempt that
the board of directors opposes. These provisions also make more difficult the removal
of current directors or management, or the election of new directors. These provisions
include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>supermajority voting requirements for certain business combinations and
changes to some provisions of the charter and bylaws;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limitation on the right to vote shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the election of directors to staggered terms of three years;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provisions regarding the timing and content of shareholder proposals and
nominations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provisions restricting the calling of special meetings of shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the absence of cumulative voting by shareholders in the election of
directors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the removal of directors only for cause.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Office of Thrift Supervision regulations</I>. Office of Thrift Supervision regulations
prohibit, for three years following the completion of a mutual-to-stock conversion, the
offer to acquire or the acquisition of more than 10% of any class of equity security of
a converted institution without the prior approval of the Office of Thrift Supervision.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information, see &#147;<I>Restrictions on Acquisition of Athens Bancshares Corporation and
Athens Federal Community Bank.</I>&#148;
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risks Related to the Formation of the Charitable Foundation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The contribution to the Athens Federal Foundation will decrease the ownership interest and voting
interest in the shares sold to the public by up to 1.24% after the contribution.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchasers of shares will have their ownership and voting interests diluted at the close of
the conversion when Athens Bancshares Corporation issues and contributes 100,000 shares to the
Athens Federal Foundation. This dilution will range from approximately 1.24% at the minimum of the
offering range to approximately 1.13% at the maximum of the offering range. For a further
discussion regarding the effect of the contribution to the charitable foundation, see <I>&#147;Pro Forma
Data&#148; </I>and <I>&#147;Comparison of Independent Valuation and Pro Forma Financial Information With and Without
the Foundation.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our contribution to the Athens Federal Foundation may not be tax deductible, which could decrease
our profits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that our contribution to the Athens Federal Foundation, valued at $1.1&nbsp;million,
pre-tax, will be deductible for federal income tax purposes. However, we do not have any assurance
that the Internal Revenue Service will grant tax-exempt status to the foundation. If the
contribution is not deductible, we would not receive any tax benefit from the contribution. In
addition, even if the contribution is tax deductible, we may not have sufficient profits to be able
to use the deduction fully. If it is more likely than not that we will be unable to use the entire
deduction, we will be required to establish a valuation allowance related to any deferred tax asset
that has been recorded for this contribution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Establishment of the Athens Federal Foundation will decrease our profits during the year in which
the foundation is established.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation intends to contribute 100,000 shares of Athens Bancshares
Corporation common stock and $100,000 in cash to the Athens Federal Foundation. This contribution
will be an additional operating expense and will reduce net income during the fiscal year in which
the foundation is established, which is expected to be late 2009 or early 2010. The contribution
to the Athens Federal Foundation would reduce net earnings by approximately $726,000, after tax,
during the year in which the foundation is established. See <I>&#147;Pro Forma Data.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="131"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>A Warning About Forward-Looking Statements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus contains forward-looking statements, which can be identified by the use of
words such as &#147;believes,&#148; &#147;expects,&#148; &#147;anticipates,&#148; &#147;estimates&#148; or similar expressions.
Forward-looking statements include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statements of our goals, intentions and expectations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statements regarding our business plans, prospects, growth and operating strategies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statements regarding the quality of our loan and investment portfolios; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>estimates of our risks and future costs and benefits.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These forward-looking statements are subject to significant risks and uncertainties. Actual
results may differ materially from those contemplated by the forward-looking statements due to,
among others, the following factors:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general economic conditions, either nationally or in our primary market area, that
are worse than expected;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a continued decline in real estate values;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the interest rate environment that reduce our interest margins or reduce
the fair value of financial instruments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased competitive pressures among financial services companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in consumer spending, borrowing and savings habits;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>legislative, regulatory or supervisory changes that adversely affect our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse changes in the securities markets; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in accounting policies and practices, as may be adopted by the bank
regulatory agencies, the Financial Accounting Standards Board or the Public Company
Accounting Oversight Board.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any of the forward-looking statements that we make in this prospectus and in other public
statements we make may later prove incorrect because of inaccurate assumptions, the factors
illustrated above or other factors that we cannot foresee. Consequently, no forward-looking
statement can be guaranteed.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="132"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Selected Consolidated Financial and Other Data</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The summary consolidated financial information presented below is derived in part from our
consolidated financial statements. The following is only a summary and you should read it in
conjunction with the consolidated financial statements and notes beginning on page F-1. The
information at December&nbsp;31, 2008 and 2007 and for the years then ended is derived in part from the
audited consolidated financial statements of Athens Federal Community Bank that appear elsewhere in
this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selected data at June&nbsp;30, 2009 and for the six months ended June&nbsp;30, 2009 and 2008 was not
audited, but in the opinion of management, represents all adjustments necessary for a fair
presentation. All of these adjustments are normal and recurring. The results of operations for
the six months ended June&nbsp;30, 2009 are not necessarily indicative of the results of operations that
may be expected for the entire year.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>At June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="19" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">243,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">251,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">230,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">212,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">190,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">182,595</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,437</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities available-for-sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,247</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities held-to-maturity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments, at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,518</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loans receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,846</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">153,190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144,807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities sold under agreements to
repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Advances from Federal Home Loan Bank</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,315</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,733</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>For the Six Months</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Ended June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="19" style="border-bottom: 1px solid #000000"><B>For the Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,457</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,519</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,626</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,759</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,867</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">267</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net interest income after
provision for loan
losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Noninterest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,380</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Noninterest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,251</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,942</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">616</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,038</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">674</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,364</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>At or For the Six</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="18">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="18">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="18" style="border-bottom: 1px solid #000000"><B>At or For the Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Performance Ratios (1):</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Return on average assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.38</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.45</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.50</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.44</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.65</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.75</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Return on average equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest rate spread (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net interest margin (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other expenses to average assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Efficiency ratio (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72.05</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average interest-earning assets to
average interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107.66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average equity to average assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Capital Ratios:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total capital (to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">16.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">18.4</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tier 1 capital (to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tier 1 capital (to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tangible equity (to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Asset Quality Ratios:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses as a percent of
total loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.39</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.45</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.58</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.52</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses as a percent of
non-performing loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">345.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">704.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,457.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">326.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,285.64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net charge-offs to average outstanding
loans during the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-performing loans as a percent
of total loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-performing assets as a percent
of total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total non-performing assets and troubled
debt restructurings as a percent of total
assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of offices</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of deposit accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,195</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,158</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 5">
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Performance ratios for the six months ended June&nbsp;30, 2009 and 2008 are annualized.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents the difference between the weighted average yield on average interest-earning
assets and the weighted average cost on average interest-bearing liabilities. Tax exempt
income is reported on a tax equivalent basis using a federal marginal tax rate of 38.3%.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents net interest income as a percent of average interest-earning assets. Tax exempt
income is reported on a tax equivalent basis using a federal marginal tax rate of 38.3%.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents other expenses divided by the sum of net interest income and other income.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="133"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Use of Proceeds</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows how we intend to use the net proceeds of the offering. The actual
net proceeds will depend on the number of shares of common stock sold in the offering and the
expenses incurred in connection with the offering. Payments for shares made through withdrawals
from deposit accounts at Athens Federal Community Bank will reduce deposits and will not result in
the receipt of new funds for investment. See <I>&#147;Pro Forma Data&#148; </I>for the assumptions used to arrive
at these amounts.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>15% Above Maximum</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>of Offering Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,515,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,800,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,085,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,412,750</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Net</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Net</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Net</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Net</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Dollars in thousands)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Proceeds</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Proceeds</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Proceeds</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Proceeds</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: offering expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net offering proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds contributed to Athens
Federal Community Bank</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(6,985</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(50.00</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(8,410</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(50.00</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(9,835</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(50.00</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(11,474</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(50.00</TD>
    <TD nowrap>)%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds used for loan to employee
stock ownership plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,292</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9.25</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,520</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,748</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8.89</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,010</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8.76</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds contributed to foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.72</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.59</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.51</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.44</TD>
    <TD nowrap>)%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds remaining for Athens
Bancshares Corporation (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40.03</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40.60</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40.80</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="33" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 1pt; margin-top: 6pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Following the completion of the stock offering and in accordance with applicable regulations,
Athens Bancshares Corporation may purchase shares of its common stock in the open market in
order to grant awards of restricted stock under its proposed equity incentive plan. Assuming
a market price of $10.00 per share at the time of purchase, the cost of acquiring the shares
would be approximately $646,000 (64,600 shares) at the minimum of the offering range, $760,000
(76,000 shares) at the midpoint of the offering range, $874,000 (87,400 shares) at the maximum
of the offering range and $1.0&nbsp;million (100,510 shares) at 15% above the maximum of the
offering range. See <I>&#147;Pro Forma Data&#148; </I>and <I>&#147;Our Management &#151; Benefit Plans &#151; Nonqualified
Deferred Compensation &#151; Future Equity Incentive Plan.&#148;</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation intends to invest the proceeds it retains from the offering
initially in short-term, liquid investments. Over time, Athens Bancshares Corporation may use the
proceeds it retains from the offering:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to invest in securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to pay dividends to shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to repurchase shares of its common stock, subject to regulatory restrictions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to finance the possible acquisition of financial institutions or other businesses
that are related to banking, although we currently have no definitive plans or
commitments regarding potential acquisition opportunities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>for general corporate purposes.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under current Office of Thrift Supervision regulations, Athens Bancshares Corporation may not
repurchase shares of its common stock during the first year following the offering, except to fund
shareholder-approved equity benefit plans or, with prior regulatory approval, when extraordinary
circumstances exist.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank may use the proceeds that it receives from the offering, which
is shown in the table above as the amount contributed to Athens Federal Community Bank:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to fund new loans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to invest in securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to finance the possible expansion of its business activities through the
establishment of new branch offices and/or the acquisition of other financial
institutions or financial services companies, although we currently have no definitive
plans or commitments regarding potential expansion or acquisition opportunities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>for general corporate purposes.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may need regulatory approvals to engage in some of the activities listed above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as described above, neither Athens Bancshares Corporation nor Athens Federal Community
Bank has any specific plans for the investment of the proceeds of this offering and has not
allocated a specific portion of the proceeds to any particular use. For a discussion of our
business reasons for undertaking the offering, see <I>&#147;The Conversion and Stock Offering &#151; Reasons
for the Conversion.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="134"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Our Dividend Policy</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following the offering, our board of directors intends to adopt a policy of paying regular
cash dividends. We cannot guarantee that we will pay dividends or that, if paid, we will not
reduce or eliminate dividends in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The board of directors may declare and pay periodic special cash dividends in addition to, or
in lieu of, regular cash dividends. In determining whether to declare or pay any dividends,
whether regular or special, the board of directors will take into account our financial condition
and results of operations, tax considerations, capital requirements, industry standards, and
economic conditions. We will also consider the regulatory restrictions that affect the payment of
dividends by Athens Federal Community Bank to us, discussed below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation is subject to Tennessee law, which generally prohibits Athens
Bancshares Corporation from paying dividends on its common stock if, after giving effect to the
distribution, it would be unable to pay its debts as they become due in the usual course of
business or if its total assets would be less than the sum of its liabilities and the amount that
would be needed, if Athens Bancshares Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock
who have a preference upon dissolution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation will not be subject to Office of Thrift Supervision regulatory
restrictions on the payment of dividends. However, our ability to pay dividends may depend, in
part, upon dividends we receive from Athens Federal Community Bank because we initially will have
no source of income other than dividends from Athens Federal Community Bank and earnings from the
investment of the net proceeds from the offering that we retain. Office of Thrift Supervision
regulations limit dividends and other distributions from Athens Federal Community Bank to us.
Athens Federal Community Bank may not declare or pay a cash dividend on its capital stock if its
effect would be to reduce the regulatory capital of Athens Federal Community Bank below the amount
required for the liquidation account to be established as required by Athens Federal Community
Bank&#146;s plan of conversion. No insured depository institution may make a capital distribution if,
after making the distribution, the institution would be undercapitalized. See <I>&#147;Regulation and
Supervision &#151; Regulation of Federal Savings Associations &#151; Limitation on Capital Distributions&#148;</I>
and &#147;<I>The Conversion and Stock Offering &#151;Effects of Conversion to Stock Form &#151; Liquidation
Account.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any payment of dividends by Athens Federal Community Bank to us that would be deemed to be
drawn out of Athens Federal Community Bank&#146;s bad debt reserves would require Athens Federal
Community Bank to pay federal income taxes at the then current income tax rate on the amount deemed
distributed. See <I>&#147;Federal and State Taxation &#151;Federal Income Taxation.&#148; </I>Athens Bancshares
Corporation does not contemplate any distribution by Athens Federal Community Bank that would
result in this type of tax liability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, Athens Bancshares Corporation may not make a distribution that would constitute a
return of capital during the three-year term of the business plan submitted in connection with the
offering.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="135"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Market for the Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not previously issued common stock and there is currently no established market for
the common stock. We have received conditional approval to list our common stock for trading on
the Nasdaq Capital Market under the symbol &#147;AFCB&#148; upon completion of the offering. Keefe, Bruyette
&#038; Woods, Inc. intends to become a market maker in our common stock following the offering, but it
is under no obligation to do so. Keefe, Bruyette &#038; Woods, Inc. also will assist us, if needed, in
obtaining other market makers after the offering. We will try to obtain at least three market
makers for our stock, but we cannot assure you that other market makers will be obtained or that an
active and liquid trading market for the common stock will develop or, if developed, will be
maintained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The development of a public market having the desirable characteristics of depth, liquidity
and orderliness depends on the existence of willing buyers and sellers, the presence of which is
not within our control or that of any market maker. The number of active buyers and sellers of our
common stock at any particular time may be limited, which may have an adverse effect on the price
at which our common stock can be sold. There can be no assurance that persons purchasing the
common stock will be able to sell their shares at or above the $10.00 price per share in the
offering. Purchasers of our common stock should recognize that there may be a limited trading
market in the common stock and, therefore, should have the financial ability to withstand a
longer-term investment horizon.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="136"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Capitalization</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the historical capitalization of Athens Federal Community Bank at
June&nbsp;30, 2009 and the capitalization of Athens Bancshares Corporation reflecting the offering
(referred to as &#147;pro forma&#148; information). The pro forma capitalization gives effect to the
assumptions listed under <I>&#147;Pro Forma Data,&#148; </I>based on the sale of the number of shares of common
stock indicated in the table. This table does not reflect the issuance of additional shares as a
result of the exercise of options granted under the proposed equity incentive plan. A change in the
number of shares to be issued in the offering may materially affect pro forma capitalization. We
are offering our common stock on a best efforts basis. We must sell a minimum of 1,515,000 shares
to complete the offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Pro Forma</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Capitalization Based Upon the Sale of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,515,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,800,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,085,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,412,750</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Capitalization</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares at</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>as of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$10.00</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Dollars in thousands, except per share amounts)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>June 30, 2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deposits (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Borrowings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total deposits and borrowed funds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">214,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">214,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">214,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">214,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">214,270</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shareholders&#146; equity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Preferred stock:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">10,000,000 shares, $0.01 par value per
share, authorized; none issued or
outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common stock:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">50,000,000 shares, $0.01 par value per
share, authorized; specified number of
shares assumed to be issued and
outstanding (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,923</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retained earnings (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,237</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares issued to the foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Charitable foundation contribution
expense (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Common stock acquired by employee stock
ownership plan (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Common stock to be acquired by equity
incentive plan (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">37,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">40,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">42,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">45,538</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shareholders&#146; equity to assets (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">16.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">17.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 1pt; margin-top: 6pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Does not reflect withdrawals from deposit accounts for the purchase of common stock in the
offering. Withdrawals to purchase common stock will reduce pro forma deposits and assets by
the amounts of the withdrawals.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Reflects total issued and outstanding shares of 1,615,000, 1,900,000, 2,185,000 and 2,512,750
at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Retained earnings are restricted by applicable regulatory capital requirements.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents the expense, net of tax, of the contribution of common stock and cash to the
Athens Federal Foundation, based on an estimated tax rate of 34.0%.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes that 8% of the sum of the common stock sold in the offering and contributed to the
charitable foundation will be acquired by the employee stock ownership plan in the offering
with funds borrowed from Athens Bancshares Corporation. Under generally accepted accounting
principles, the amount of common stock to be purchased by the employee stock ownership plan
represents unearned compensation and is, accordingly, reflected as a reduction of capital and
a liability to the employee stock ownership plan. As shares are released to plan
participants&#146; accounts, a compensation expense will be charged, along with related tax
benefit, and a reduction in the charge against capital will occur in the amount of the
compensation expense recognized. Since the funds are borrowed from Athens Bancshares
Corporation, the borrowing will</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->28<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>be eliminated in consolidation and no liability or interest expense will be reflected in the
financial statements of Athens Federal Community Bank. The loan will be repaid principally
through Athens Federal Community Bank&#146;s contributions to the employee stock ownership plan and
dividends payable on common stock held by the plan over the anticipated 15-year term of the
loan. See <I>&#147;Our Management &#151; Benefit Plans &#151; Employee Stock Ownership Plan.&#148;</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the purchase in the open market at $10.00 per share, for restricted stock awards
under the proposed equity incentive plan, of a number of shares equal to 4% of the sum of the
shares of common stock sold in the offering and contributed to the charitable foundation. The
shares are reflected as a reduction of shareholders&#146; equity. The equity incentive plan will
be submitted to shareholders for approval at a meeting following the offering. See <I>&#147;Risk
Factors &#151; Issuance of shares for benefit programs may dilute your ownership interest,&#148; &#147;Pro
Forma Data&#148; </I>and <I>&#147;Our Management &#151; Benefit Plans &#151; Future Equity Incentive Plan.&#148;</I></TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="137"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Regulatory Capital Compliance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, Athens Federal Community Bank exceeded all regulatory capital requirements.
The following table presents Athens Federal Community Bank&#146;s capital position relative to its
regulatory capital requirements at June&nbsp;30, 2009, on a historical and a pro forma basis. The table
reflects receipt by Athens Federal Community Bank of 50% of the net proceeds of the offering. For
purposes of the table, the amount expected to be borrowed by the employee stock ownership plan is
deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro
forma capital calculations presented below, see <I>&#147;Use of Proceeds,&#148; &#147;Capitalization&#148; </I>and <I>&#147;Pro Forma
Data.&#148; </I>The definitions of the terms used in the table are those provided in the capital
regulations issued by the Office of Thrift Supervision. For a discussion of the capital standards
applicable to Athens Federal Community Bank, see <I>&#147;Regulation and Supervision &#151; Regulation of
Federal Savings Associations &#151; Capital Requirements.&#148;</I>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="31" style="border-bottom: 1px solid #000000"><B>Pro Forma at June 30, 2009</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>15% Above</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Maximum of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Offering Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Historical at</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>1,515,000 Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>1,800,000 Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2,085,000 Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000"><B>2,412,750 Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>June 30, 2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>At $10.00 Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>At $10.00 Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>At $10.00 Per Share</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>At $10.00</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Share</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Dollars in thousands)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets (1)</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total capital under generally
accepted accounting
principles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tangible Capital:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital level (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Requirement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,782</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Excess</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,811</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Core Capital:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital level (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Requirement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,029</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Excess</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">6.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">9.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23,995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">9.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tier 1 Risk-Based Capital:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital level</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">16.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">17.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">18.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">18.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Requirement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Excess</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,519</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">9.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">13.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Risk-Based Capital:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total risk-based capital (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">18.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,817</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">18.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35,014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">19.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Requirement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Excess</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">7.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reconciliation of capital
infusion to Athens Federal
Community Bank:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net proceeds of offering</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds to Athens Federal
Community Bank</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: stock acquired by
ESOP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma increase in
GAAP and regulatory
capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 1pt; margin-top: 6pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Tangible capital and core capital levels are shown as a percentage of adjusted total assets
of $242.3&nbsp;million. Risk-based capital levels are shown as a percentage of risk-weighted
assets of $179.1&nbsp;million.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>See note 10 of the notes to consolidated financial statements for a reconciliation of total
capital under generally accepted accounting principles and each of tangible capital, core
capital, Tier 1 risked based capital and total risk-based capital.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20%
risk-weighting.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="138"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Pro Forma Data</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables show information about our net income and shareholders&#146; equity reflecting
the sale of common stock in the offering. The information provided illustrates our pro forma net
income and shareholders&#146; equity based on the sale of common stock at the minimum of the offering
range, the midpoint of the offering range, the maximum of the offering range and 15% above the
maximum of the offering range. The actual net proceeds from the sale of the common stock cannot be
determined until the offering is completed. Net proceeds indicated in the following tables are
based upon the following assumptions:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All shares of stock will be sold in the subscription and community offerings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our employee stock ownership plan will purchase a number of shares equal to 8% of
the sum of the shares sold in the offering and contributed to the charitable foundation
with a loan from Athens Bancshares Corporation that will be repaid in equal
installments over 15&nbsp;years;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Keefe, Bruyette &#038; Woods, Inc. will receive a success fee equal to the greater of:
(i) $200,000 or (ii)&nbsp;1.125% of the aggregate purchase price of the shares sold in the
offering, except that no fee will be paid with respect to (a)&nbsp;shares purchased by the
employee stock ownership plan or by our officers, directors and employees and members
of their immediate families and (b)&nbsp;shares contributed to the charitable foundation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total expenses of the offering, excluding fees paid to Keefe, Bruyette &#038; Woods,
Inc., will be approximately $980,000; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We will make a charitable contribution of 100,000 shares of Athens Bancshares
Corporation, with an assumed value of $10.00 per share, and $100,000 in cash.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual expenses may vary from this estimate, and the amount of fees paid to Keefe, Bruyette &#038;
Woods, Inc. (and potentially other broker-dealers) will depend upon whether a syndicate of
broker-dealers or other means is necessary to sell the shares, and other factors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro forma net income for the six months ended June&nbsp;30, 2009 and the year ended December&nbsp;31,
2008 has been calculated as if the offering were completed at the beginning of the period, and the
net proceeds had been invested at 1.18% for the six months ended June&nbsp;30, 2009 and 0.87% for the
year ended December&nbsp;31, 2008, which represents the two-year treasury rate at June&nbsp;30, 2009. We
believe that the two-year treasury rate at June&nbsp;30, 2009 represents a more realistic yield on the
investment of the offering proceeds than the arithmetic average of the weighted average yield
earned on our interest-earning assets and the weighted average rate paid on our deposits, which is
the reinvestment rate required by Office of Thrift Supervision regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A pro forma after-tax return of 0.78% is used for the six months ended June&nbsp;30, 2009 and 0.57%
for the year ended December&nbsp;31, 2008, after giving effect to a combined federal and state income
tax rate of 34% for each period. Historical and pro forma per share amounts have been calculated
by dividing historical and pro forma amounts by the number of shares of common stock indicated in
the tables.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When reviewing the following tables you should consider the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The final column gives effect to a 15% increase in the offering range, which may
occur without any further notice if Keller &#038; Company increases its appraisal to reflect
the results of this offering, changes in our financial condition or results of
operations or changes in market conditions after the offering begins. See <I>&#147;The
Conversion and Stock Offering &#151; How We Determined the Offering Range and the $10.00
Per Share Purchase Price.&#148;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Since funds on deposit at Athens Federal Community Bank may be withdrawn to purchase shares of common stock, the amount of funds available for investment will be reduced by
the amount of</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->31<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>withdrawals for stock purchases. The pro forma tables do not reflect withdrawals
from deposit accounts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Historical per share amounts have been computed as if the shares of common stock
expected to be issued in the offering had been outstanding at the beginning of the
period covered by the table. However, neither historical nor pro forma shareholders&#146;
equity has been adjusted to reflect the investment of the estimated net proceeds from
the sale of the shares in the offering, the additional employee stock ownership plan
expense or the proposed equity incentive plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pro forma shareholders&#146; equity (&#147;book value&#148;) represents the difference between the
stated amounts of our assets and liabilities. Pro forma tangible shareholders&#146; equity
excludes intangible assets. Book value amounts do not represent fair market values or
amounts available for distribution to shareholders in the unlikely event of
liquidation. The amounts shown do not reflect the federal income tax consequences of
the restoration to income of Athens Federal Community Bank&#146;s special bad debt reserves
for income tax purposes or give effect to the liquidation account in the event of
liquidation, which would be required in the unlikely event of liquidation. See
<I>&#147;Federal and State Taxation&#148; </I>and <I>&#147;The Conversion and Stock Offering &#151; Effects of
Conversion to Stock Form &#151; Liquidation Account.&#148;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amounts shown as pro forma shareholders&#146; equity per share do not represent
possible future price appreciation of our common stock.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following pro forma data may not represent the actual financial effects of the offering or
our operating results after the offering. The pro forma data relies exclusively on the assumptions
outlined above and in the notes to the pro forma tables. The pro forma data does not represent the
fair market value of our common stock, the current fair market value of our assets or liabilities,
or the amount of money that would be available for distribution to shareholders if we are
liquidated after the offering.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->32<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are offering our common stock on a best efforts basis. We must sell a minimum of 1,515,000
shares to complete the offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Six Months Ended June 30, 2009</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>15% Above</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,515,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,800,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,085,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,412,750</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands, except per share amounts)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,128</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: offering expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Estimated net conversion proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,948</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: cash contribution to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: common stock acquired by employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,292</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,520</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,748</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,010</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: common stock to be acquired by equity incentive plan (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(646</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(760</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(874</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,005</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investable proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,833</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro Forma Net Income:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income (loss) (3):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,084</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma income on net investable proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma employee stock ownership plan adjustments (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma restricted stock award expense (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(43</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(50</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(58</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(66</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma stock option expense (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(61</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(72</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(83</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(95</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Pro forma net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">971</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">956</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income (loss)&nbsp;per share (3):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma income on net investable proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma employee stock ownership plan adjustments (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma restricted stock award expense (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma stock option expense (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Pro forma net income (loss)&nbsp;per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering price as a multiple of pro forma net income per share (annualized)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.46</TD>
    <TD nowrap>x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.93</TD>
    <TD nowrap>x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.42</TD>
    <TD nowrap>x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.20</TD>
    <TD nowrap>x</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of shares used to calculate pro forma net income per share (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,490,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,753,067</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,016,027</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,318,431</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro Forma Shareholders&#146; Equity:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma shareholders&#146; equity (book value) (5):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Estimated net proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,948</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plus: common stock issued to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: expense net of tax of contribution to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock acquired by employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,292</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,520</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,748</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,010</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock to be acquired by equity incentive plan (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(646</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(760</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(874</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,005</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Pro forma shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">37,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">40,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">42,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">45,538</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma shareholders&#146; equity per share (5):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10.08</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Estimated net proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plus: common stock issued to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: expense net of tax contribution to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.45</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.29</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock acquired by employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock to be acquired by equity incentive plan (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma shareholders&#146; equity per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18.12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering price as a percentage of pro forma shareholders&#146; equity per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">42.92</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">47.33</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">51.23</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">55.19</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of shares used to calculate pro forma shareholders&#146; equity
per share (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,615,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,185,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,512,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><I>(footnotes on pages <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and </I><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><I>)</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Year Ended December 31, 2008</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>15% Above</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,515,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1,800,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,085,000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2,412,750</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at $10.00</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands, except per share amounts)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per Share</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,128</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: offering expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,180</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Estimated net conversion proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,948</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: cash contribution to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: common stock acquired by employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,292</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,520</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,748</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,010</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: common stock to be acquired by equity incentive plan (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(646</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(760</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(874</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,005</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investable proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,833</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro Forma Net Income:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income (loss) (3):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,109</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma income on net investable proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma employee stock ownership plan adjustments (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(57</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(67</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(77</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(88</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma restricted stock award expense (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(85</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(115</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(133</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma stock option expense (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(123</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(144</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(166</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(191</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Pro forma net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">811</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income (loss)&nbsp;per share (3):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma income on net investable proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma employee stock ownership plan adjustments (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma restricted stock award expense (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.06</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.06</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.06</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.06</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: pro forma stock option expense (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Pro forma net income (loss)&nbsp;per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering price as a multiple of pro forma net income per share (annualized)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.39</TD>
    <TD>x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.00</TD>
    <TD>x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.81</TD>
    <TD>x</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.57</TD>
    <TD>x</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of shares used to calculate pro forma net income per share (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,494,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,758,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,021,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,325,131</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro Forma Shareholders&#146; Equity:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma shareholders&#146; equity (book value) (5):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,212</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Estimated net proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,948</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plus: common stock issued to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: expense net of tax of contribution to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(726</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock acquired by employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,292</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,520</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,748</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,010</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock to be acquired by equity incentive plan (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(646</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(760</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(874</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,005</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Pro forma shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">39,026</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">41,534</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">44,419</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma shareholders&#146; equity per share (5):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Historical</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.64</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Estimated net proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plus: common stock issued to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: expense net of tax contribution to charitable foundation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.45</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.29</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock acquired by employee stock ownership plan (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.80</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: common stock to be acquired by equity incentive plan (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma shareholders&#146; equity per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17.68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering price as a percentage of pro forma shareholders&#146; equity per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">44.23</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">48.69</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">52.60</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">56.56</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of shares used to calculate pro forma shareholders&#146; equity
per share (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,615,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,185,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,512,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><I>(footnotes on pages <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and </I><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>)
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->34<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Not meaningful.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes that the employee stock ownership plan will acquire a number of shares of stock equal
to 8% of the sum of the shares sold in the offering and contributed to the charitable
foundation (129,200, 152,000, 174,800 and 201,020 shares at the minimum, midpoint, maximum and
adjusted maximum of the offering range, respectively). The employee stock ownership plan will
borrow the funds to acquire these shares from the net offering proceeds retained by Athens
Bancshares Corporation. The amount of this borrowing has been reflected as a reduction from
gross proceeds to determine estimated net investable proceeds. This borrowing will have an
interest rate equal to the prime rate as published in The Wall Street Journal, which is
currently 3.25%, and a term of 15&nbsp;years. Athens Federal Community Bank intends to make
contributions to the employee stock ownership plan in amounts at least equal to the principal
and interest requirement of the debt. Interest income that Athens Bancshares Corporation will
earn on the loan will offset a portion of the compensation expense recorded by Athens Federal
Community Bank as it contributes to the employee stock ownership plan. As the debt is paid
down, shares will be released for allocation to participants&#146; accounts and shareholders&#146;
equity will be increased. The adjustment to pro forma net income for the employee stock
ownership plan reflects the after-tax compensation expense associated with the plan.
Applicable accounting principles require that compensation expense for the employee stock
ownership plan be based upon the market value of shares committed to be released and that
unallocated shares be excluded from earnings per share computations. An equal number of
shares (1/15 of the total, based on a 15-year loan) will be released each year over the term
of the loan. The valuation of shares committed to be released would be based upon the average
market value of the shares during the year, which, for purposes of this calculation, was
assumed to be equal to the $10.00 per share purchase price. If the average market value per
share is greater than $10.00 per share, total employee stock ownership plan expense would be
greater. See <I>&#147;Our Management &#151; Benefit Plans &#151; Employee Stock Ownership Plan.&#148;</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes that Athens Bancshares Corporation will purchase in the open market a number of
shares of stock equal to 4% of the sum of the shares sold in the offering and contributed to
the charitable foundation (64,600, 76,000, 87,400 and 100,510 shares at the minimum, midpoint,
maximum and adjusted maximum of the offering range, respectively), that will be reissued as
restricted stock awards under an equity incentive plan to be adopted following the offering.
Purchases will be funded with cash on hand at Athens Bancshares Corporation or with dividends
paid to Athens Bancshares Corporation by Athens Federal Community Bank. The cost of these
shares has been reflected as a reduction from gross proceeds to determine estimated net
investable proceeds. In calculating the pro forma effect of the restricted stock awards, it
is assumed that the required shareholder approval has been received, that the shares used to
fund the awards were acquired at the beginning of the respective period and that the shares
were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued
shares of the common stock instead of shares repurchased in the open market would dilute the
ownership interests of existing shareholders by approximately 3.8%. The adjustment to pro
forma net income for the restricted stock awards reflects the after-tax compensation expense
associated with the awards. It is assumed that the fair market value of a share of Athens
Bancshares Corporation common stock was $10.00 at the time the awards were made, that shares
of restricted stock issued under the equity incentive plan vest 20% per year, that
compensation expense is recognized on a straight-line basis over each vesting period so that
20% of the value of the shares awarded was an amortized expense during each year, and that the
combined federal and state income tax rate was 34%. If the fair market value per share is
greater than $10.00 per share on the date shares are awarded under the equity incentive plan,
total equity incentive plan expense would be greater.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Does not give effect to the non-recurring expense that is expected to be recognized in late
2009 or early 2010 as a result of the contribution of common stock to the charitable
foundation.</TD>
</TR>

<TR style="font-size: 6pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>The following table shows the estimated after-tax expense associated with the contribution to
the foundation, as well as pro forma net loss and pro forma net loss per share assuming the
contribution to the foundation was expensed during the periods presented.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->35<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>15% Above</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Minimum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Midpoint of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands, except per share amounts)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Range</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Range</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Range</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering Range</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Before-tax expense of contribution to
foundation:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Six months ended June&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Year ended December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>After-tax expense of contribution to foundation:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Six months ended June&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Year ended December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro forma net income:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Six months ended June&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">230</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Year ended December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro forma net income per share:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Six months ended June&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Year ended December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro forma tax benefit:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Six months ended June&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #ffffff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Year ended December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>The before-tax expense of the contribution to the foundation is based upon 100,000 shares being
contributed at a cost of $10.00 per share and a $100,000 cash contribution. The pro forma data
assume that we will realize 100.0% of the income tax benefit as a result of the contribution to
the foundation based on a 34% income tax rate. The realization of the tax benefit is limited
annually to 10.0% of our annual taxable income. However, for federal and state tax purposes, we
can carry forward any unused portion of the deduction for five years following the year in which
the contribution is made. As reflected in the table above, the assumed tax benefit at a 34% tax
rate reduces the before-tax expense of the charitable foundation for the year ended December&nbsp;31,
2008 by $374,000 at each of the minimum, midpoint, maximum and 15% above the maximum of the
offering range. See <I>&#147;Summary&#151;We Will Form the Athens Federal Foundation.&#148;</I></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>The adjustment to pro forma net income for stock options reflects the after-tax compensation
expense associated with the stock options that may be granted under the equity incentive plan
expected to be adopted following the offering. If the equity incentive plan is approved by
shareholders, a number of shares equal to 10% of the sum of the number of shares sold in the
offering and contributed to the charitable foundation (161,500, 190,000, 218,500 and 251,275
shares at the minimum, midpoint, maximum and adjusted maximum of the offering range,
respectively) will be reserved for future issuance upon the exercise of stock options that may
be granted under the plan. Using the Black-Scholes option-pricing formula, the options are
assumed to have a value of $4.15 for each option, based on the following assumptions: exercise
price, $10.00; trading price on date of grant, $10.00; dividend yield, 0%; expected life, 5
years; expected volatility, 22.7%; and risk-free interest rate, 3.56%. Because there
currently is no market for Athens Bancshares Corporation common stock, the assumed expected
volatility is based on the SNL Index for all publicly-traded thrifts. The dividend yield is
assumed to be 0% because there is no history of dividend payments and the board of directors
has not expressed an intention to commence dividend payments upon completion of the offering.
It is assumed that stock options granted under the equity incentive plan vest 20% per year,
that compensation expense is recognized on a straight-line basis over each vesting period so
that 20% of the value of the options awarded was an amortized expense during each year, that
25% of the options awarded are non-qualified options and that the combined federal and state
income tax rate was 34%. If the fair market value per share is different than $10.00 per
share on the date options are awarded under the equity incentive plan, or if the assumptions
used in the option-pricing formula are different from those used in preparing this pro forma
data, the value of the stock options and the related expense would be different. Applicable
accounting standards do not prescribe a specific valuation technique to be used to estimate
the fair value of employee stock options. Athens Bancshares Corporation may use a valuation
technique other than the Black-Scholes option-pricing formula and that technique may produce a
different value. The issuance of authorized but unissued shares of common stock to satisfy
option exercises instead of shares repurchased in the open market would dilute the ownership
interests of existing shareholders by approximately 9.1%.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>The number of shares used to calculate pro forma net income per share is equal to the total
number of shares to be outstanding upon completion of the offering, less the number of shares
purchased by the employee stock ownership plan not committed to be released within six months
or one year following the offering. The number of shares used to calculate pro forma
shareholders&#146; equity per share equals the total number of shares to be outstanding upon
completion of the offering.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->36<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="139"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Comparison of Independent Valuation and Pro Forma Financial<BR>
Information With and Without the Foundation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As set forth in the following table, if we do not establish and fund the Athens Federal
Foundation as part of the offering, Keller &#038; Company estimates that our pro forma valuation would
be greater, which would have increased the amount of common stock offered for sale in the offering.
If the foundation were not established, there is no assurance that the updated appraisal that
Keller &#038; Company will prepare at the closing of the offering would conclude that our pro forma
market value would be the same as the estimate set forth in the table below. The updated appraisal
will be based on the facts and circumstances existing at that time, including, among other things,
market and economic conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information presented in the following table is for comparative purposes only. It assumes
that the offering was completed at June&nbsp;30, 2009, based on the assumptions set forth under <I>&#147;Pro
Forma Data.&#148;</I>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>At the Maximum,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>At the Minimum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>At the Midpoint</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>At the Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>as Adjusted,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>of Estimated</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>of Estimated</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>of Estimated</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>of Estimated</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Valuation Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Valuation Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Valuation Range</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Valuation Range</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands, except per share</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>With</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>No</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>With</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>No</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>With</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>No</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>With</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>No</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">amount)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Foundation</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated offering amount (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,450</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated pro forma valuation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,450</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">255,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">256,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">257,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">259,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">259,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">262,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">263,216</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">265,106</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,427</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">971</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">953</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma shareholders&#146; equity per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.93</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income (loss)&nbsp;per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro Forma Pricing Ratios:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Offering price as a percentage of
pro forma shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">42.92</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">43.46</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">47.33</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">47.89</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">51.23</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">51.81</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">55.19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">55.77</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Offering price to net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.82</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Offering price to assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.98</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Pro Forma Financial Ratios:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Return on assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.78</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.78</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.75</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.74</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.73</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.72</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Return on shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.02</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Shareholders&#146; equity to total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.89</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on independent valuation prepared by Keller &#038; Company as of August&nbsp;19, 2009.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->37<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="140"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Our Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation, a Tennessee corporation, was incorporated in September&nbsp;2009 to
become the holding company for Athens Federal Community Bank upon completion of the conversion.
Before the completion of the conversion, Athens Bancshares Corporation has not engaged in any
significant activities other than organizational activities. Following completion of the
conversion, Athens Bancshares Corporation&#146;s business activity will be the ownership of the
outstanding capital stock of Athens Federal Community Bank. Athens Bancshares Corporation will not
own or lease any property but will instead use the premises, equipment and other property of Athens
Federal Community Bank with the payment of appropriate rental fees, as required by applicable law
and regulations, under the terms of an expense allocation agreement. In the future, Athens
Bancshares Corporation may acquire or organize other operating subsidiaries; however, there are no
current plans, arrangements, agreements or understandings, written or oral, to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Founded in 1934, Athens Federal Community Bank is a federally chartered savings bank
headquartered in Athens, Tennessee. We operate as a community-oriented financial institution
offering traditional financial services to consumers and businesses in our primary market area. We
attract deposits from the general public and use those funds to originate primarily one-to
four-family residential mortgage loans and, to a lesser extent, non-residential real estate loans,
construction loans, land and land development loans, multi-family real estate loans, consumer loans
and commercial business loans. We conduct our lending and deposit activities primarily with
individuals and small businesses in our primary market area.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have historically maintained offices in McMinn County, Tennessee. However, in recent
years, we have attempted to expand our market presence within the southeast Tennessee region,
particularly in Monroe and Bradley Counties, to capitalize on growth opportunities in the area. In
December&nbsp;2005, we opened a full service branch in Madisonville, Tennessee, the county seat of
Monroe County. We also opened two full service branch offices in Cleveland, Tennessee, which is
located in Bradley County, in early 2007. In connection with our expansion into the Cleveland
market area, we hired a regional president and additional experienced commercial lending and credit
administration personnel. At June&nbsp;30, 2009, we had a combined $15.4&nbsp;million in deposits and $59.3
million in loans outstanding at our two Cleveland branches.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our website address is www.athensfederal.com. Information on our website should not be
considered a part of this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Market Area</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are headquartered in Athens, Tennessee, which is located in southeastern Tennessee along
Interstate 75, approximately half way between Knoxville, Tennessee and Chattanooga, Tennessee. We
consider McMinn, Monroe and Bradley Counties, Tennessee, and the surrounding areas to be our
primary market area. According to published statistics, the 2009 populations of McMinn, Monroe and
Bradley Counties were approximately 49,000, 39,000 and 88,000, respectively. From 2000 to 2009,
McMinn County&#146;s population increased at a 0.7% annual rate, which fell below the comparable 1.1%
national and Tennessee annual population growth rates. During that same time period, Monroe and
Bradley Counties recorded annual population growth rates of 1.8% and 1.1%, respectively. Projected
five-year population growth rates for McMinn, Monroe and Bradley Counties reflect modest declines
from the previous 2000 to 2009 growth rates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The top employment sectors in our primary market area currently consist of manufacturing
services, particularly with respect to the automobile manufacturing industry, and, to a lesser
extent, wholesale and retail trade services, government services and educational, health care and
social assistance services. Our local economy has been negatively impacted by the economic
recession in recent months, which has resulted in increased job losses in the manufacturing
services sector. However, at the same time, our local economy has also benefited from new
manufacturing activity entering the market which is expected to create additional jobs for local
workers. Notably, Volkswagen of America, Inc. and Wacker Chemie AG, a leading manufacturer of
solar panels, are currently constructing manufacturing plants in our primary market area. Our
local economy has also been positively impacted
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->38<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by retirees relocating to our primary market area, as the southeastern Tennessee region has
become an increasingly attractive destination for retirees due to its affordable housing prices,
temperate climate and lack of state income tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Competition</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face significant competition for the attraction of deposits and origination of loans. Our
most direct competition for deposits has historically come from the several financial institutions
operating in our primary market area and from other financial service companies such as securities
brokerage firms, credit unions and insurance companies. We also face competition for investors&#146;
funds from money market funds, mutual funds and other corporate and government securities. At June
30, 2008, which is the most recent date for which data is available from the Federal Deposit
Insurance Corporation, we held approximately 20.2% of the deposits in McMinn County, Tennessee,
3.2% of the deposits in Monroe County, Tennessee and 1.1% of the deposits in Bradley County,
Tennessee. This data does not reflect deposits held by credit unions with which we also compete.
In addition, banks owned by large national and regional holding companies and other community-based
banks also operate in our primary market area. Some of these institutions are larger than us and,
therefore, may have greater resources.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our competition for loans comes primarily from financial institutions, including credit
unions, in our primary market area and from other financial service providers, such as mortgage
companies and mortgage brokers. Competition for loans also comes from non-depository financial
service companies entering the mortgage market, such as insurance companies, securities companies
and specialty finance companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect competition to increase in the future as a result of legislative, regulatory and
technological changes and the continuing trend of consolidation in the financial services industry.
Technological advances, for example, have lowered barriers to entry, allowed banks to expand their
geographic reach by providing services over the Internet, and made it possible for non-depository
institutions to offer products and services that traditionally have been provided by banks.
Changes in federal law now permit affiliation among banks, securities firms and insurance
companies, which promotes a competitive environment in the financial services industry.
Competition for deposits and the origination of loans could limit our growth in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Lending Activities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>General. </I></B>The largest segment of our loan portfolio is real estate mortgage loans, primarily
one- to four-family residential mortgage loans, and, to a lesser extent, non-residential real
estate loans, construction loans, land and land development loans, multi-family real estate loans,
consumer loans and commercial business loans. We originate loans for investment purposes, although
we generally sell our fixed-rate residential mortgage loans into the secondary market with
servicing retained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to continue to emphasize residential lending, while also concentrating on ways to
expand our commercial real estate and commercial business lending activities with a focus on
serving small businesses and emphasizing relationship banking in our primary market area. We do
not offer, and have not offered, Alt-A, sub-prime or no-documentation mortgage loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>One-to Four-Family Residential Loans. </I></B>At June&nbsp;30, 2009, we had $77.2&nbsp;million in one- to
four-family residential loans, which represented 39.5% of our total loan portfolio. Our
origination of residential mortgage loans enables borrowers to purchase or refinance existing homes
located in our primary market area. In recent years, a significant portion of the residential
mortgage loans that we have originated have been secured by non-owner occupied properties. Loans
secured by non-owner occupied properties generally carry a greater risk of loss than loans secured
by owner-occupied properties. See <I>&#147;Risk Factors &#151; Risks Related to Our Business &#151; Our
concentration in non-owner occupied real estate loans may expose us to increased credit risk.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our residential lending policies and procedures generally conform to the secondary market
guidelines. We generally offer a mix of adjustable rate mortgage loans and fixed-rate mortgage
loans with terms of up to 30&nbsp;years. Borrower demand for adjustable-rate loans compared to
fixed-rate loans is a function of the level of interest rates, the expectations of changes in the
level of interest rates, and the difference between the interest rates and loan fees offered for
fixed-rate mortgage loans as compared to an initially discounted interest rate and loan fees for
multi-year adjustable-rate mortgages. The relative amount of fixed-rate mortgage loans and
adjustable-rate mortgage loans that
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->39<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">can be originated at any time is largely determined by the demand for each in a competitive
environment. The loan fees, interest rates and other provisions of mortgage loans are determined
by us based on our own pricing criteria and competitive market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rates and payments on our adjustable-rate mortgage loans generally adjust annually
after an initial fixed period that typically ranges from one to five years. Interest rates and
payments on our adjustable-rate loans generally are indexed to the National Monthly Median Cost of
Funds or the one year U.S. Treasury Constant Maturity Index.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While one-to four-family residential real estate loans are normally originated with up to
30-year terms, such loans typically remain outstanding for substantially shorter periods because
borrowers often prepay their loans in full either upon sale of the property pledged as security or
upon refinancing the original loan. Therefore, average loan maturity is a function of, among other
factors, the level of purchase and sale activity in the real estate market, prevailing interest
rates and the interest rates payable on outstanding loans on a regular basis. We do not offer
residential mortgage loans with negative amortization and generally do not offer interest-only
residential mortgage loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally do not make owner occupied one- to four-family residential real estate loans with
loan-to-value ratios exceeding 95%. Loans with loan-to-value ratios in excess of 89% typically
require private mortgage insurance. In addition, we generally do not make not make non-owner
occupied one- to four-family residential real estate loans with loan-to-value ratios exceeding 85%.
We generally require all properties securing mortgage loans to be appraised by a board-approved
independent appraiser. We also generally require title insurance on all first mortgage loans.
Borrowers must obtain hazard insurance, and flood insurance is required for all loans located in
flood hazard areas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Non-residential Real Estate Loans. </I></B>We offer fixed- and adjustable-rate mortgage loans secured
by non-residential real estate. At June&nbsp;30, 2009, non-residential real estate loans totaled $36.2
million, or 18.5% of our total loan portfolio. Our non-residential real estate loans are generally
secured by small to moderately-sized office and retail properties, churches and hotels located both
in and out of our primary market area. With respect to non-residential real estate loans, we
typically require that either the borrower or the property securing the loan be located in our
primary market area.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We originate fixed-rate non-residential real estate loans, generally with terms of three to
five years and payments based on an amortization schedule of up to 30&nbsp;years, resulting in &#147;balloon&#148;
balances at maturity. We also offer adjustable-rate commercial real estate loans, generally with
terms up to 30&nbsp;years and with interest rates typically equal to the prime lending rate as reported
in the Wall Street Journal plus an applicable margin. Loans are secured by first mortgages,
generally are originated with a maximum loan-to-value ratio of 80% and may require specified debt
service coverage ratios depending on the characteristics of the project. Rates and other terms on
such loans generally depend on our assessment of credit risk after considering such factors as the
borrower&#146;s financial condition and credit history, loan-to-value ratio, debt service coverage ratio
and other factors. Our non-residential real estate loans typically provide for an interest rate
floor of 5.0%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, our largest non-residential real estate loan had an outstanding balance of
$3.4&nbsp;million. This loan, which was originated in April&nbsp;2008 and is secured by an office building
and fast food restaurant in Cleveland, Tennessee and a fast food restaurant in North Carolina, was
performing in accordance with its original terms at June&nbsp;30, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Construction Loans. </I></B>We originate construction loans for one-to four-family homes and, to a
much lesser extent, commercial properties, such as retail shops and office units, and multi-family
properties. At June&nbsp;30, 2009, residential and non-residential construction loans totaled $12.4
million, which represented 6.4% of our total loan portfolio. Construction loans are typically for
a term of 12&nbsp;months with monthly interest only payments, and generally are followed by an automatic
conversion to a 15-year to 30-year permanent loan with monthly payments of principal and interest.
Except for speculative loans, discussed below, residential construction loans are generally only
made to homeowners and the repayment of such loans generally comes from the proceeds of a permanent
mortgage loan for which a commitment is typically in place when the construction loan is
originated. Interest rates on these loans are generally tied to either the National Monthly Median
Cost of Funds or the One Year U.S.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->40<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Treasury Constant Maturity Index. We generally require a maximum loan-to-value ratio of 80% for
all construction loans. We generally disburse funds on a percentage-of-completion basis following
an inspection by a third party inspector.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also originate speculative construction loans to builders who have not identified a buyer
for the completed property at the time of origination. We generally limit speculative construction
loans to a group of well-established builders in our primary market area and we also limit the
number of projects with each builder. At June&nbsp;30, 2009, we had approved commitments for
speculative construction loans of $8.1&nbsp;million, of which $5.0&nbsp;million was outstanding. We
generally require a maximum loan-to-value ratio of 80% for speculative construction loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, our largest non-speculative construction loan relationship was a commitment
of $2.8&nbsp;million, all of which was outstanding. This relationship was performing according to its
original terms at June&nbsp;30, 2009. At June&nbsp;30, 2009, our largest speculative construction loan
relationships included two loans of $2.0&nbsp;million each. The first had an outstanding balance of
$1.4&nbsp;million and the second had an outstanding balance of $1.3&nbsp;million at June&nbsp;30, 2009. Both
loans were performing according to their original terms at June&nbsp;30, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Land and Land Development Loans. </I></B>We originate loans to individuals and developers for the
purpose of developing vacant land in our primary market area, typically for building an
individual&#146;s future residence or, in the case of a developer, residential subdivisions. At June
30, 2009, land and land development loans totaled $17.0&nbsp;million, which represented 8.7% of our
total loan portfolio. Land development loans, which are offered for terms of up to 12&nbsp;months, are
generally indexed to the prime rate as reported in the Wall Street Journal plus an applicable
margin. We generally require a maximum loan-to-value ratio to 75% of the discounted market value
based upon expected cash flows upon completion of the project. We also originate loans to
individuals secured by undeveloped land held for investment purposes. At June&nbsp;30, 2009, our
largest land development loan had an outstanding balance of $1.9&nbsp;million and was performing in
accordance with its original terms at June&nbsp;30, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Multi-Family Real Estate Loans. </I></B>We offer multi-family mortgage loans that are generally
secured by properties in our primary market area. At June&nbsp;30, 2009, multi-family loans totaled
$14.6&nbsp;million, which represented 7.5% of our total loan portfolio. Multi-family loans are secured
by first mortgages and generally are originated with a maximum loan-to-value ratio of 85% and
generally require specified debt service coverage ratios depending on the characteristics of the
project. Rates and other terms on such loans generally depend on our assessment of the credit risk
after considering such factors as the borrower&#146;s financial condition and credit history,
loan-to-value ratio, debt service coverage ratio and other factors. At June&nbsp;30, 2009, our largest
multi-family real estate loan had an outstanding balance of $3.8&nbsp;million, was secured by an
apartment complex located in northwest Georgia and was performing in accordance with its original
terms at June&nbsp;30, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Consumer Loans. </I></B>We offer a variety of consumer loans, including home equity loans and lines
of credit, automobile loans, and loans secured by deposits. At June&nbsp;30, 2009, consumer loans
totaled $25.8&nbsp;million, or 13.2% of our total loan portfolio. Our consumer loan portfolio consists
primarily of home equity loans, both fixed-rate amortizing term loans with terms up to 15&nbsp;years and
adjustable rate lines of credit with interest rates indexed to the prime rate as published in the
Wall Street Journal. Consumer loans typically have shorter maturities and higher interest rates
than traditional one- to four-family lending. We typically do not originate home equity loans with
loan-to-value ratios exceeding 89%, including any first mortgage loan balance. The procedures for
underwriting consumer loans include an assessment of the applicant&#146;s payment history on other debts
and ability to meet existing obligations and payments on the proposed loan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through our operating subsidiary, Southland Finance, Inc., we also offer consumer finance
loans secured by used automobiles, televisions and various other personal property to borrowers
with historically lower credit scores. These consumer finance loans are partially funded by a $2.0
million line of credit with us. Loans originated at Southland Finance, Inc. are generally made for
terms of 12 to 36&nbsp;months and have an average loan balance of approximately $4,500. We generally
maintain separate underwriting standards and more aggressive collection activity for these consumer
finance loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Commercial Business Loans. </I></B>We typically offer commercial business loans to small businesses
located in our primary market area. At June&nbsp;30, 2009, commercial business loans totaled $12.2
million, which
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->41<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">represented 6.2% of our total loan portfolio. Commercial business loans consist of floating rate
loans indexed to the prime rate as published in the Wall Street Journal plus an applicable margin
and fixed rate loans for terms of up to five years. Our commercial business loan portfolio
consists primarily of loans that are secured by land or equipment but also includes a smaller
amount of unsecured loans for purposes of financing expansion or providing working capital for
general business purposes. Key loan terms vary depending on the collateral, the borrower&#146;s
financial condition, credit history and other relevant factors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Loan Underwriting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Adjustable-Rate Loans. </I></B>While we anticipate that adjustable-rate loans will better offset the
adverse effects of an increase in interest rates as compared to fixed-rate mortgages, an increased
monthly mortgage payment required of adjustable-rate loan borrowers in a rising interest rate
environment could cause an increase in delinquencies and defaults. The marketability of the
underlying property also may be adversely affected in a high interest rate environment. In
addition, although adjustable-rate mortgage loans make our asset base more responsive to changes in
interest rates, the extent of this interest sensitivity is limited by the annual and lifetime
interest rate adjustment limits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Non-Owner Occupied Residential Real Estate Loans. </I></B>Loans secured by rental properties
represent a unique credit risk to us and, as a result, we adhere to special underwriting
guidelines. Of primary concern in non-owner occupied real estate lending is the consistency of
rental income of the property. Payments on loans secured by rental properties often depend on the
maintenance of the property and the payment of rent by its tenants. Payments on loans secured by
rental properties often depend on successful operation and management of the properties. As a
result, repayment of such loans may be subject to adverse conditions in the real estate market or
the economy. To monitor cash flows on rental properties, we require borrowers and loan guarantors,
if any, to provide annual financial statements and we consider and review a rental income cash flow
analysis of the borrower and consider the net operating income of the property, the borrower&#146;s
expertise, credit history and profitability, and the value of the underlying property. We generally
require collateral on these loans to be a first mortgage along with an assignment of rents and
leases.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Non-residential and Multi-Family Real Estate Loans. </I></B>Loans secured by multi-family and
commercial real estate generally have larger balances and involve a greater degree of risk than
one- to four-family residential mortgage loans. Of primary concern in multi-family and commercial
real estate lending is the borrower&#146;s creditworthiness and the feasibility and cash flow potential
of the project. Payments on loans secured by income properties often depend on successful
operation and management of the properties. As a result, repayment of such loans may be subject to
adverse conditions in the real estate market or the economy. We apply what we believe to be
conservative underwriting standards when originating commercial loans and seek to limit our
exposure to lending concentrations to related borrowers, types of business and geographies, as well
as seeking to participate with other banks in both buying and selling larger loans of this nature.
Management has hired experienced lending officers and credit management personnel over the past
several years in order to safely increase this type of lending. To monitor cash flows on income
properties, we require borrowers and loan guarantors, if any, to provide annual financial
statements on multi-family and commercial real estate loans. In reaching a decision on whether to
make a multi-family or commercial real estate loan, we consider and review a global cash flow
analysis of the borrower and consider the net operating income of the property, the borrower&#146;s
expertise, credit history and profitability, and the value of the underlying property. An
environmental survey or environmental risk insurance is obtained when the possibility exists that
hazardous materials may have existed on the site, or the site may have been impacted by adjoining
properties that handled hazardous materials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Construction, Land and Land Development Loans. </I></B>Construction financing is generally considered
to involve a higher degree of risk of loss than long-term financing on improved, occupied real
estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial
estimate of the property&#146;s value at completion of construction and the estimated cost of
construction. During the construction phase, a number of factors could result in delays and cost
overruns. If the estimate of construction costs proves to be inaccurate, we may be required to
advance funds beyond the amount originally committed to permit completion of the building. If the
estimate of value proves to be inaccurate, we may be confronted, at or before the maturity of the
loan, with a building having a value which is insufficient to assure full repayment if liquidation
is required. If we are forced to foreclose on a building before or at completion due to a default,
we may be unable to recover all of the unpaid balance of, and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->42<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">accrued interest on, the loan as well as related foreclosure and holding costs. In addition,
speculative construction loans, which are loans made to home builders who, at the time of loan
origination, have not yet secured an end buyer for the home under construction, typically carry
higher risks than those associated with traditional construction loans. These increased risks
arise because of the risk that there will be inadequate demand to ensure the sale of the property
within an acceptable time. As a result, in addition to the risks associated with traditional
construction loans, speculative construction loans carry the added risk that the builder will have
to pay the property taxes and other carrying costs of the property until an end buyer is found.
Land and land development loans have substantially similar risks to speculative construction loans.
To monitor cash flows on construction properties, we require borrowers and loan guarantors, if
any, to provide annual financial statements and, in reaching a decision on whether to make a
construction or land development loan, we consider and review a global cash flow analysis of the
borrower and consider the borrower&#146;s expertise, credit history and profitability. We also
generally disburse funds on a percentage-of-completion basis following an inspection by a third
party inspector.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Consumer Loans. </I></B>Consumer loans may entail greater risk than do residential mortgage loans,
particularly in the case of consumer loans that are secured by assets that depreciate rapidly, such
as motor vehicles. In such cases, repossessed collateral for a defaulted consumer loan may not
provide an adequate source of repayment for the outstanding loan and a small remaining deficiency
often does not warrant further substantial collection efforts against the borrower. In the case of
home equity loans, real estate values may be reduced to a level that is insufficient to cover the
outstanding loan balance after accounting for the first mortgage loan balance. Consumer loan
collections depend on the borrower&#146;s continuing financial stability, and therefore are likely to be
adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy.
Furthermore, the application of various federal and state laws, including federal and state
bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Commercial Business Loans. </I></B>Unlike residential mortgage loans, which generally are made on the
basis of the borrower&#146;s ability to make repayment from his or her employment income or other
income, and which are secured by real property whose value tends to be more easily ascertainable,
commercial business loans are of higher risk and typically are made on the basis of the borrower&#146;s
ability to make repayment from the cash flow of the borrower&#146;s business. As a result, the
availability of funds for the repayment of commercial business loans may depend substantially on
the success of the business itself. Further, any collateral securing such loans may depreciate
over time, may be difficult to appraise and may fluctuate in value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loan Approval Procedures and Authority. </I></B>Our lending activities follow written,
non-discriminatory underwriting standards and loan origination procedures established by our board
of directors and management. Certain of our employees have been granted individual lending limits,
which vary depending on the individual, the type of loan and whether the loan is secured or
unsecured. Generally, all loan requests exceeding the individual officer lending limits are
approved as follows: (i)&nbsp;the approval of any two members of our Loan Committee is required for
residential loans up to $250,000; (ii)&nbsp;the approval of any three members of our Loan Committee (one
of whom must be the President and Chief Executive Officer or Chief Credit Officer) is required for
any single transaction of between $250,000 and $1.0&nbsp;million and aggregate debt to one borrower
transactions of between $250,000 and $1.0&nbsp;million; and (iii)&nbsp;the approval of any four members of
our board of directors is required for all single transactions exceeding $1.0&nbsp;million and all loans
to customers having aggregate outstanding debt to us exceeding $1.0&nbsp;million. Our Loan Committee
consists of our President and Chief Executive Officer, Chief Credit Officer, Vice President, Chief
Operating Officer and Chief Financial Officer and certain other officers designated by the board of
directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loans to One Borrower. </I></B>The maximum amount that we may lend to one borrower and the borrower&#146;s
related entities is limited, by regulation, to generally 15% of our unimpaired capital and surplus.
At June&nbsp;30, 2009, our regulatory limit on loans to one borrower was $4.1&nbsp;million. At that date,
our largest lending relationship was $3.9&nbsp;million and was performing according to its original
terms at that date. This loan relationship is secured primarily by commercial real estate and
equipment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loan Commitments. </I></B>We issue commitments for residential and commercial mortgage loans
conditioned upon the occurrence of certain events. Commitments to originate mortgage loans are
legally binding agreements to lend to our customers. Generally, our loan commitments expire after
30&nbsp;days. See note 18 to notes to consolidated financial statements appearing elsewhere in this
prospectus.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->43<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment Activities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have legal authority to invest in various types of liquid assets, including U.S. Treasury
obligations, securities of various government-sponsored agencies and of state and municipal
governments, mortgage-backed securities and certificates of deposit of federally insured
institutions. Within certain regulatory limits, we also may invest a portion of our assets in
other permissible securities. As a member of the Federal Home Loan Bank of Cincinnati, we also are
required to maintain an investment in Federal Home Loan Bank of Cincinnati stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, our investment portfolio consisted primarily of U.S. government and agency
securities, mortgage-backed securities and securities issued by government sponsored enterprises,
and municipal securities. We do not currently invest in trading account securities. At June&nbsp;30,
2009, we also maintained an investment, at cost, in Federal Home Loan Bank of Cincinnati common
stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our investment objectives are: (i)&nbsp;to provide and maintain liquidity within the guidelines of
the Office of Thrift Supervision&#146;s regulations, (ii)&nbsp;to manage interest rate risk; and (iii)&nbsp;to
provide collateral for public unit deposits. Our board of directors has the overall responsibility
for the investment portfolio, including approval of the investment policy. Messrs.&nbsp;Cunningham, our
President and Chief Executive Officer, and Hutsell, our Vice President, Chief Operating Officer and
Chief Financial Officer, are responsible for implementation of the investment policy and monitoring
our investment performance. In addition, we have retained a third party registered investment
advisor to serve as our investment manager and execute investment transactions, perform
pre-purchase analysis and provide portfolio analysis on a quarterly basis. Our investment manager
acts in a co-advisory capacity and does not have discretionary authority to execute trades on our
behalf without the pre-approval of our President and Chief Executive Officer and/or Vice President,
Chief Operating Officer and Chief Financial Officer. Our board of directors reviews the status of
our investment portfolio on a monthly basis, or more frequently if warranted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Deposit Activities and Other Sources of Funds</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>General. </I></B>Deposits, borrowings and loan repayments are the major sources of our funds for
lending and other investment purposes. Scheduled loan repayments are a relatively stable source of
funds, while deposit inflows and outflows and loan prepayments are significantly influenced by
general interest rates and money market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Deposit Accounts. </I></B>Deposits are attracted from within our primary market area through the
offering of a broad selection of deposit instruments, including non-interest-bearing demand
deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money
market accounts), regular savings accounts and certificates of deposit. Deposit account terms vary
according to the minimum balance required, the time periods the funds must remain on deposit and
the interest rate, among other factors. In determining the terms of our deposit accounts, we
consider the rates offered by our competition, our liquidity needs, profitability to us, matching
deposit and loan products and customer preferences and concerns. We generally review our deposit
mix and pricing weekly. Our deposit pricing strategy has typically been to offer competitive rates
on all types of deposit products, and to periodically offer special rates in order to attract
deposits of a specific type or term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Borrowings. </I></B>We use advances from the Federal Home Loan Bank of Cincinnati to supplement our
investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit
for member financial institutions. As a member, we are required to own capital stock in the
Federal Home Loan Bank of Cincinnati and are authorized to apply for advances on the security of
such stock and certain of our mortgage loans and other assets (principally securities which are
obligations of, or guaranteed by, the United States), provided certain standards related to
creditworthiness have been met. Advances are made under several different programs, each having
its own interest rate and range of maturities. Depending on the program, limitations on the amount
of advances are based either on a fixed percentage of an institution&#146;s net worth, the Federal Home
Loan Bank&#146;s assessment of the institution&#146;s creditworthiness, collateral value and level of Federal
Home Loan Bank stock ownership. We also utilize securities sold under agreements to repurchase and
overnight repurchase agreements to supplement our supply of investable funds and to meet deposit
withdrawal requirements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->44<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Properties</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conduct our business through our main office, branch offices and other offices. The
following table sets forth certain information relating to these facilities as of June&nbsp;30, 2009.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Net Book Value</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned/</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>at</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Location</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Opened</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Leased</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>June 30, 2009</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(Dollars in thousands)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Main Office:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Athens Main Office<br>
106 Washington Avenue<br>
Athens, Tennessee 37303</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,268</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Branch Offices:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Athens Decatur Pike Office<br>
1103 Decatur Pike<br>
Athens, Tennessee 37303</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cleveland Ocoee Street Office<br>
3855 North Ocoee Street<br>
Cleveland, Tennessee 37312</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap>Leased (1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cleveland 25th Street Office<br>
950 25th Street<br>
Cleveland, Tennessee 37311</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Leased (2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Etowah Office<br>
523 Tennessee Avenue<br>
Etowah, Tennessee 37331</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">724</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Madisonville Office<br>
4785 New Highway 68<br>
Madisonville, Tennessee 37875</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">908</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sweetwater Office<br>
800 Highway 68<br>
Sweetwater, Tennessee 37874</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">236</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other Offices:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Athens Lending Center<br>
106 Hornsby Street<br>
Athens, Tennessee 37303</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Southland Finance Company<br>
516 South Congress Parkway<br>
Athens, Tennessee 37303</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Leased (3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valley Title Services, LLC<br>
d/b/a Sweetwater Valley Title<br>
202 N. White Street<br>
Athens, Tennessee 37303</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Leased (4)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valley Title Services, LLC<br>
d/b/a Title Company of Monroe County<br>
New Highway 68<br>
Sweetwater, Tennessee 37874</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Leased (3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valley Title Services, LLC<br>
205 Decatur Pike<br>
Athens, Tennessee 37303</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Owned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Lease expires in February&nbsp;2012.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Lease expires in December&nbsp;2017.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Property is leased on a month-to-month basis.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Lease expires in October&nbsp;2009.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->45<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Personnel</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2009, we had 97 full-time employees and eight part-time employees, none of whom
is represented by a collective bargaining unit. We believe our relationship with our employees is
good.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Legal Proceedings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Periodically, there have been various claims and lawsuits against us, such as claims to
enforce liens, condemnation proceedings on properties in which we hold security interests, claims
involving the making and servicing of real property loans and other issues incident to our
business. We are not a party to any pending legal proceedings that we believe would have a
material adverse effect on our financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Subsidiaries</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have two direct subsidiaries, Southland Finance, Inc. and TiServ, Inc., both of which are
organized as Tennessee corporations, and one indirect subsidiary, Valley Title Services, LLC, which
is organized as a Tennessee limited liability company. Southland Finance, Inc. is a consumer
finance loan company. TiServ, Inc. holds stock in a credit reinsurance company and is the holding
company for Valley Title Services, LLC, a title insurance agency which also conducts business under
the names Sweetwater Valley Title and Title Company of Monroe County.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the above subsidiaries, we also offer investment and retirement products,
including mutual funds, variable annuities, individual retirement accounts, fixed annuities and
life insurance policies, to individual consumers in our primary market area through a third party
affiliation with a registered broker-dealer.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->46<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="141"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Management&#146;s Discussion and Analysis of<BR>
Financial Condition and Results of Operations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The objective of this section is to help potential investors understand our views on our
results of operations and financial condition. You should read this discussion in conjunction with
the consolidated financial statements and the notes to consolidated financial statements that
appear at the end of this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Operating Strategy</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary objective is to operate and grow a profitable community-oriented financial
institution serving customers in our primary market areas. We have sought to achieve this through
the adoption of a business strategy designed to maintain a strong capital position and high asset
quality. Most of our senior management team has been in place for the past ten years. We have
implemented a plan to diversify our product offerings by expanding our commercial deposit and
lending products, expanding our branch network into nearby communities, and emphasizing high asset
quality standards. Our operating strategy includes the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>remaining a community-oriented financial institution;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continuing our historical focus on residential mortgage lending;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expanding our commercial real estate and multi-family lending activities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>emphasizing lower cost core deposits to maintain low funding costs; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expanding our market share within our primary market area.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Remaining a community-oriented financial institution.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have operated as a community-oriented financial institution since we were established in
1934 and have been operating continuously since that time. We are committed to meeting the
financial needs of the communities in which we operate, and we are dedicated to providing quality
personal service to our customers. We provide a broad range of consumer and business financial
services through our network of branches and will continually seek out ways to improve convenience,
safety and service through our product offerings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Continuing our historical focus on residential mortgage lending.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary lending focus has been, and will continue to be, on operating as a residential
mortgage lender. We originate adjustable rate mortgage loans that are retained in our loan
portfolio. We also originate fixed-rate mortgage loans, most of which are sold into the secondary
market with servicing retained in order to better serve our customer base. At June&nbsp;30, 2009, our
residential mortgage loan portfolio had grown to approximately $77.2&nbsp;million as compared to $59.8
million at December&nbsp;31, 2004. As of June&nbsp;30, 2009, we serviced an additional $78.2&nbsp;million in
loans that we originated and sold into the secondary market as compared to $59.3&nbsp;million at
December&nbsp;31, 2004. Due to the lower interest rate environment over the past year, a greater number
of loans have been originated for sale into the secondary market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Expanding our commercial real estate and multi-family lending activities.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In recent years we have expanded our commercial real estate and multi-family lending
activities. Management has hired experienced commercial lending officers and credit management
personnel over the past several years in order to safely increase this type of lending. We have
grown our loan portfolio secured by commercial real estate and multi-family real estate to $36.2
million and $14.6&nbsp;million, respectively, as of June&nbsp;30, 2009 from $20.5&nbsp;million and $946,000,
respectively, at December&nbsp;31, 2004.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->47<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Emphasizing lower cost core deposits to maintain low funding costs.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We seek to increase net interest income by controlling costs of funding rather than maximizing
asset yields because originating loans with high yields often involves greater credit risk. As a
traditional thrift institution, a greater percentage of our deposit accounts have been higher
balance, higher costing certificates of deposits. Over the past several years, we have sought to
reduce our dependence on traditional high cost deposits in favor of stable low cost demand
deposits. We have utilized additional product offerings, technology and a focus on customer
service in working toward this goal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Expanding our market share within our primary market area.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to expand our market share in our primary market area by evaluating additional
branch expansion opportunities and pursuing opportunities to acquire other financial institutions
in our primary market area and surrounding areas, although we currently have no definitive plans or
commitments regarding potential acquisition opportunities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Overview</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Income. </I></B>Our primary source of pre-tax income is net interest income. Net interest income is
the difference between interest income, which is the income that we earn on our loans and
investments, and interest expense, which is the interest that we pay on our deposits and
borrowings. Other significant sources of pre-tax income are service charges (mostly from service
charges on deposit accounts and loan servicing fees), fees from the sale of mortgage loans
originated for sale in the secondary market, and commissions on sales of securities and investment
products. We also recognize income from the sale of securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Allowance for Loan Losses. </I></B>The allowance for loan losses is a valuation allowance for
probable losses inherent in the loan portfolio. We evaluate the need to establish allowances
against losses on loans on a monthly basis. When additional allowances are necessary, a provision
for loan losses is charged to earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Expenses. </I></B>The noninterest expense we incur in operating our business consists of salaries and
employee benefits expenses, occupancy expenses, federal deposit insurance premiums and assessments,
data processing expenses and other miscellaneous expenses. Following the offering, our noninterest
expenses are likely to increase as a result of expenses of shareholder communications and meetings,
stock exchange listing fees, and expenses related to additional accounting services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries and employee benefits expenses consist primarily of: salaries, wages and bonuses
paid to our employees; payroll taxes; and expenses for health insurance, retirement plans and other
employee benefits. Following the offering, we will recognize additional annual employee
compensation expenses stemming from the adoption of new equity benefit plans. We cannot determine
the actual amount of these new stock-related compensation and benefit expenses at this time because
applicable accounting practices require that they be based on the fair market value of the shares
of common stock at specific points in the future. For an illustration of these expenses, see <I>&#147;Pro
Forma Data.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist
primarily of depreciation charges, rental expenses, furniture and equipment expenses, maintenance,
real estate taxes and costs of utilities. Depreciation of premises and equipment is computed using
a combination of accelerated and straight-line methods based on the useful lives of the related
assets, which range from three to forty years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data processing expenses are the fees we pay to third parties for processing customer
information, deposits and loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal deposit insurance premiums and assessments are payments we make to the Federal Deposit
Insurance Corporation for insurance of our deposit accounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our contribution to the charitable foundation will be an additional operating expense that
will reduce net income during the quarter in which the contribution to the foundation is made. Any
loss resulting from the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->48<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">contribution to the foundation will not be a recurring loss. See <I>&#147;Pro Forma Data&#148; </I>for a detailed
analysis of the cost of the contribution to the foundation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expenses include expenses for professional services, advertising, office supplies,
postage, telephone, insurance and other miscellaneous operating expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Critical Accounting Policies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We consider accounting policies involving significant judgments and assumptions by management
that have, or could have, a material impact on the carrying value of certain assets or on income to
be critical accounting policies. We consider the allowance for loan losses to be our only critical
accounting policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Allowance for Loan Losses. </I></B>The allowance for loan losses is the amount estimated by
management as necessary to cover losses inherent in the loan portfolio at the balance sheet date.
The allowance is established through the provision for loan losses, which is charged to income.
Determining the amount of the allowance for loan losses necessarily involves a high degree of
judgment. Among the material estimates required to establish the allowance are: loss exposure at
default; the amount and timing of future cash flows on impacted loans; value of collateral; and
determination of loss factors to be applied to the various elements of the portfolio. All of these
estimates are susceptible to significant change. Management reviews the level of the allowance
monthly and establishes the provision for loan losses based upon an evaluation of the portfolio,
past loss experience, current economic conditions and other factors related to the collectability
of the loan portfolio. Although we believe that we use the best information available to establish
the allowance for loan losses, future adjustments to the allowance may be necessary if economic or
other conditions differ substantially from the assumptions used in making the evaluation. In
addition, the Office of Thrift Supervision, as an integral part of its examination process,
periodically reviews our allowance for loan losses and may require us to recognize adjustments to
the allowance based on its judgments about information available to it at the time of its
examination. A large loss could deplete the allowance and require increased provisions to
replenish the allowance, which would adversely affect earnings. See note 4 of the notes to the
consolidated financial statements included in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Balance Sheet Analysis</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Assets. </I></B>At June&nbsp;30, 2009, our total assets were $243.0&nbsp;million, a decrease of $8.0&nbsp;million
from December&nbsp;31, 2008 and an increase of $12.5&nbsp;million from December&nbsp;31, 2007. The decrease
during the six months ended June&nbsp;30, 2009 was primarily the result of a planned reduction of $4.3
million in our loan portfolio in order to increase our Tier 1 capital ratio to above 10% in light
of deteriorating economic conditions, a decrease in higher costing certificates of deposit of $13.3
million and the repayment of $5.9&nbsp;million in Federal Home Loan Bank advances that had been utilized
to fund the loan portfolio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loans. </I></B>Our primary lending activity is the origination of loans secured by real estate. We
originate primarily residential mortgage loans and, to a lesser extent, non-residential real estate
loans, construction loans, land and land development loans, multi-family real estate loans,
consumer loans and commercial business loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans and residential construction loans totaled $77.2&nbsp;million, or 39.5%,
and $8.0&nbsp;million, or 4.1% of the total loan portfolio, at June&nbsp;30, 2009, respectively. At December
31, 2008, these loans totaled $75.3&nbsp;million, or 37.6%, and $13.1&nbsp;million, or 6.5% of the total loan
portfolio, respectively. The decrease in residential construction loans was primarily a result of
the completion of construction projects. Lower market interest rates also increased refinancing of
adjustable rate loans in our portfolio to fixed rate loans that were sold into the secondary
market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate loans, including non-residential, multi-family, land and construction
loans on these types of properties, comprised $72.2&nbsp;million, or 36.9% of the total loan portfolio,
at June&nbsp;30, 2009. At December&nbsp;31, 2008, these loans totaled $69.7&nbsp;million, or 34.8% of the total
loan portfolio. The increase was primarily due to an increase in land loans. During the six
months ended June&nbsp;30, 2009, non-residential and multi-family real estate loans increased $3.9
million and $3.5&nbsp;million, respectively, primarily a result of the completion and conversion of
construction loans in these categories and the origination of new multi-family real estate loans.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->49<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial business loans and consumer loans decreased to $12.2&nbsp;million, or 6.2% of the total
loan portfolio, and $25.8&nbsp;million, or 13.2% of the total loan portfolio, respectively, at June&nbsp;30,
2009 as compared to $14.6&nbsp;million, or 7.3% of the total loan portfolio, and $27.5&nbsp;million, or 13.8%
of the total loan portfolio, respectively, at December&nbsp;31, 2008. The decrease in commercial
business loans was primarily due to payoffs totaling $2.0&nbsp;million received during the six months
ended June&nbsp;30, 2009 on two loans whose borrowers changed ownership. The decrease in consumer loans
was primarily due to a $980,000 decrease in unsecured loans, a $344,000 decrease in loans secured
by automobiles and a $447,000 decrease in consumer finance loans made by our subsidiary, Southland
Finance, Inc. The primary reasons for these decreases were loan repayments and customers&#146;
reluctance to take on additional or new consumer debt.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->50<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the composition of our loan portfolio at the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>At June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="38" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="47" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real estate mortgage:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential one- to four-family</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">77,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">39.50</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">75,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">37.62</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">71,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">39.38</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">65,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">40.89</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,663</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">45.04</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">59,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">48.88</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,295</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.73</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Multi-family</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.77</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.02</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Multi-family construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,079</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.57</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="47" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">158,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123,108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75.59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="47" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,027</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,080</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Home equity loans and lines
of credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Auto loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans secured by deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,203</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer finance loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,367</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,052</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.74</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="47" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="47" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">181,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160,373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="47" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: unearned interest and fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(285</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(361</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(544</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(588</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(534</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(523</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: net deferred loan origination
fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(183</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(192</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(231</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(198</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(190</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(149</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: allowance for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,758</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,083</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,536</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,574</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,059</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,895</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loans receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">192,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">196,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">178,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">157,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">138,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">119,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="49" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->51<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Loan Maturity</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information at June&nbsp;30, 2009 and December&nbsp;31, 2008
regarding the dollar amount of loan principal repayments becoming due during the periods indicated.
The table does not include any estimate of prepayments which significantly shorten the average
life of all loans and may cause our actual repayment experience to differ from that shown below.
Demand loans having no stated schedule of repayments and no stated maturity are reported as due in
one year or less.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="27" style="border-bottom: 1px solid #000000"><B>At June 30, 2009</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Residential</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Non-residential</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Commercial</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Real Estate</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Real Estate (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Construction (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Land</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Business</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Consumer</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amounts due in:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">One year or less</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,323</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">45,211</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than one year
through two years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,881</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than two years
through three years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,506</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than three years
through five years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,814</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,264</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than five years
through ten years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,476</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,744</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than ten years
through fifteen years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">931</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,929</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than fifteen years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,908</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">77,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">50,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,412</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">195,443</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="27" style="border-bottom: 1px solid #000000"><B>At December 31, 2008</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Residential</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Non-residential</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Commercial</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Real Estate</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Real Estate (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Construction (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Land</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Business</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Consumer</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amounts due in:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">One year or less</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,594</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">44,542</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than one year
through two years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,293</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than two years
through three years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,788</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than three years
through five years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">781</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,724</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than five years
through ten years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,521</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,092</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than ten years
through fifteen years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">More than fifteen years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,440</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">75,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">43,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">200,156</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes multi-family real estate loans.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes residential real estate construction loans, non-residential real estate
construction loans and multi-family real estate construction loans.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->52<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Fixed vs. Adjustable Rate Loans</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the dollar amount of all loans at June&nbsp;30, 2009 that are due
after June&nbsp;30, 2010, and have either fixed interest rates or adjustable interest rates. The
amounts shown below exclude unearned loan origination fees.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Floating or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fixed Rates</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Adjustable Rates</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">55,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">72,093</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,632</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,089</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,704</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,933</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,483</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,781</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">52,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">97,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">150,232</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the dollar amount of all loans at December&nbsp;31, 2008 that are
due after December&nbsp;31, 2009, and have either fixed interest rates or adjustable interest rates.
The amounts shown below exclude unearned loan origination fees.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Floating or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fixed Rates</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Adjustable Rates</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">54,698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70,429</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,956</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,065</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,751</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,950</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,463</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">60,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">94,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">155,614</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of our adjustable rate loans contain floor rates. Some adjustable rate loan products
contain floor rates equal to the initial interest rate on the loan. When market interest rates
fall below the floor rate, as has occurred in recent months, loan rates do not adjust further
downward. As market interest rates rise in the future, the interest rates on these loans may rise
based on the contract rate (index plus the margin) exceeding the initial interest floor rate;
however, contract interest rates will only increase when the index plus margin exceed the imposed
floor rate.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->53<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Loan Activity</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows loans originated, purchased and sold during the periods indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="24" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total loans at beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">199,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">181,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">181,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">159,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">140,628</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loans originated:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,338</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,959</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,295</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,041</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,143</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,633</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,318</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total loans originated</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,768</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loans purchased:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">499</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">502</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total loans purchased</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deduct:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan principal repayments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,855</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,955</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total repayments and sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,810</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net loan activity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,628</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,959</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total loans at end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">194,975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">184,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">199,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">181,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">159,587</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan originations come from a number of sources. The primary sources of loan originations are
existing customers, walk-in traffic, advertising and referrals from customers. We generally sell
in the secondary market long-term fixed-rate residential mortgage loans that we originate. Our
decision to sell loans is based on prevailing market interest rate conditions, interest rate
management and liquidity needs. Occasionally, we have purchased participation interests in
commercial real estate loans to supplement our lending portfolio. We underwrite participation
interests using the same underwriting standards for loans that we originate for our portfolio. At
June&nbsp;30, 2009, our participation interests totaled $10.9&nbsp;million, all of which was secured by
properties outside of our primary market area but within a 75-mile radius of it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009 our securities portfolio consisted of securities of U.S. government agencies
and corporations, securities of various government-sponsored agencies and of state and municipal
governments and mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae. At
June&nbsp;30, 2009, we also held an investment in the common stock of the Federal Home Loan Bank of
Cincinnati. A portion of this investment is required in order to collateralize borrowings from the
Federal Home Loan Bank of Cincinnati and the investment is periodically increased by stock
dividends paid by the Federal Home Loan Bank. Our securities portfolio is used to invest excess
funds for increased yield, manage interest rate risk and as collateralization for public unit
deposits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009, $22.6&nbsp;million of our securities portfolio was classified as available for
sale and $1,624 of our securities portfolio was classified as held to maturity. All securities
classified as held to maturity are mortgage- backed securities. In addition, at June&nbsp;30, 2009, we
had $2.9&nbsp;million of other investments, at cost, which consisted solely of Federal Home Loan Bank of
Cincinnati common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities decreased by $7.9&nbsp;million, or 23.6%, for the six months ended June&nbsp;30, 2009
primarily as a result of calls of U.S. Government agencies and repayments received on
mortgage-backed securities. Our securities portfolio increased by $5.7&nbsp;million, or 20.5%, during
the year ended December&nbsp;31, 2008 primarily due to purchases of U.S. Government agency securities
and municipal bonds totaling $16.6&nbsp;million. We hold no stock in Fannie Mae
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->54<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">or Freddie Mac and have not held stock in these entities throughout the periods presented. In
addition, for all periods presented, our mortgage-backed and related securities did not include any
private label issues or real estate mortgage investment conduits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the amortized costs and fair values of our investment
securities at the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>At June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="23" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amortized</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fair</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amortized</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fair</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amortized</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fair</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amortized</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fair</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Cost</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S. government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,968</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">States and political subdivisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,995</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage-backed
and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,501</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other investment securities
available for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total securities available for sale
and held to maturity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,465</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank of
Cincinnati common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other investment securities held at
cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,290</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total investments, at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,076</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,541</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the activity in our investment securities portfolio during the
periods indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>At or For the Six</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>At or For the Year Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage-backed and related securities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and related securities,
beginning of period (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,126</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Repayments and prepayments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,005</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,579</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,727</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,035</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,641</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase (decrease)&nbsp;in net unrealized gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(191</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net increase (decrease)&nbsp;in mortgage-backed
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,918</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and related securities,
end of period (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,501</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment securities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment securities, beginning of period (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,224</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,290</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(960</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,160</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,600</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,020</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Maturities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,894</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,098</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,254</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,850</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,435</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase (decrease)&nbsp;in net unrealized gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(79</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(84</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(32</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net increase (decrease)&nbsp;in investment securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,973</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,909</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,934</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,970</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment securities, end of period (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,952</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,254</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>At fair value.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->55<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables set forth the stated maturities and weighted average yields of securities
at June&nbsp;30, 2009 and December&nbsp;31, 2008. Weighted average yields on tax-exempt securities are
presented on a tax equivalent basis using a federal marginal tax rate of 38.3%. Certain
mortgage-backed securities have adjustable interest rates and will reprice annually within the
various maturity ranges. These repricing schedules are not reflected in the table below. Weighted
average yield calculations on investments available for sale do not give effect to changes in fair
value that are reflected as a component of equity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>At June&nbsp;30, 2009:</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>More than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>More than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>One Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>One Year to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Five Years to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>More than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>or Less</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Five Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ten Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ten Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S. government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.40</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.68</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.99</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.54</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">States and political subdivisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.74</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage-backed and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.03</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank of Cincinnati
common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.73</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.12</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.13</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.13</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.03</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>At December&nbsp;31, 2008:</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>More than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>More than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>One Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>One Year to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Five Years to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>More than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>or Less</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Five Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ten Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ten Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Carrying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S. government agencies and
corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.61</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.69</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.29</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">States and political subdivisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.74</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage-backed and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank of Cincinnati
common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.16</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.97</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.42</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">33,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.95</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="41" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->56<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Deposits. </I></B>We accept deposits primarily from individuals and businesses who are located in our
primary market area or who have a pre-existing lending relationship with us. We rely on
competitive pricing, customer service, account features and the location of our branch offices to
attract and retain deposits. Deposits serve as the primary source of funds for our lending and
investment activities. Deposit accounts offered include individual and business checking accounts,
money market accounts, individual NOW accounts, savings accounts and certificates of deposit.
Non-interest bearing accounts consist of free checking and commercial checking accounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 2007, balances in non-interest bearing accounts decreased
by approximately $3.4&nbsp;million due to a large public deposit being moved to a money market account.
In subsequent periods, balance levels in these types of accounts have remained stable while the
numbers of accounts have grown. Free checking accounts typically have lower average balances, but
have contributed to increases in non-interest income through overdraft fees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand deposit and NOW accounts increased at a rate of 8.46% and 11.08% for the years ended
December&nbsp;31, 2008 and 2007, respectively, and increased 4.59% during the six months ended June&nbsp;30,
2009. The increases in demand deposit and NOW accounts is primarily due to the expansion of our
branch network in Monroe County and Bradley County, where we currently operate two full service
branch offices and six off-site automated teller machines. We have also established a senior
travel club and made other promotional and discount offerings available to customers in connection
with these products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificate of deposits decreased by $13.3&nbsp;million during the six months ended June&nbsp;30, 2009.
A portion of these funds were moved to other types of interest bearing deposits with us including
money market accounts. Lower levels of market interest rates, as well as competitor pricing
significantly above prevailing market rates, has contributed to the decline in certificates of
deposit. Our need for loan funding, ability to invest these funds for a positive return and
consideration of other customer relationships influences our willingness to match above market
rates to retain these accounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the balances of our deposit accounts at the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>At June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-interest-bearing accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,169</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Demand and NOW accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,881</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Money market accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,544</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Passbook savings accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,985</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Certificates of deposit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">206,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">197,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">171,214</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table indicates the amount of jumbo certificates of deposit by time remaining
until maturity as of June&nbsp;30, 2009 and December&nbsp;31, 2008, none of which are brokered deposits.
Jumbo certificates of deposit require minimum deposits of $100,000.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Maturity Period</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(In thousands)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>At June&nbsp;30, 2009:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Three months or less</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,085</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over three through six months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,587</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over six through twelve months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,909</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over twelve months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,644</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47,225</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>At December&nbsp;31, 2008:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Three months or less</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,321</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over three through six months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,576</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over six through twelve months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,677</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Over twelve months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,870</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">56,444</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->57<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth time deposits classified by rates at the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>At June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">0.00 - 1.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">203</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">430</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1.01 - 2.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,855</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2.01 - 3.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,049</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3.01 - 4.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,425</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">4.01 - 5.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,736</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">5.01 - 6.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,749</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">6.01 - 7.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.01 - 8.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">391</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">114,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">126,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">103,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the amount and maturities of time deposits at June&nbsp;30, 2009.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Amount Due</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent of Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less Than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>One Year to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Two Years to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Time Deposit</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>One Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Two Years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Three Years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Three Years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Accounts</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">0.00 - 1.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.05</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1.01 - 2.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.65</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2.01 - 3.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3.01 - 4.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,851</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">4.01 - 5.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29.09</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">5.01 - 6.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,080</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">6.01 - 7.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.01 - 8.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,063</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">114,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the amount and maturities of time deposits at December&nbsp;31,
2008.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Amount Due</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent of Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less Than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>One Year to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Two Years to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Time Deposit</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>One Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Two Years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Three Years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Three Years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Accounts</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">0.00 - 1.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.43</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1.01 - 2.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2.01 - 3.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">854</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">696</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3.01 - 4.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,457</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.98</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">4.01 - 5.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32.26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">5.01 - 6.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">6.01 - 7.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.01 - 8.00%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">75,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13,798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,827</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth deposit activity for the periods indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Beginning balance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">206,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">197,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">197,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">171,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">153,190</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase (decrease)&nbsp;before interest credited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,358</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,327</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest credited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,697</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net increase (decrease)&nbsp;in deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,573</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,024</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ending balance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">204,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">206,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">197,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">171,214</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->58<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Borrowings. </I></B>We use borrowings from the Federal Home Loan Bank of Cincinnati to supplement our
supply of funds for loans and investments and for interest rate risk management.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(In thousands)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Maximum balance outstanding at any month-end
during period:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,637</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,336</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Average balance outstanding during period:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,956</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,667</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Weighted average interest rate during period:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.68</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.95</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.78</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.13</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.16</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.69</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.81</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.62</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.14</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.08</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance outstanding at end of period:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,630</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,681</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Weighted average interest rate at end of period:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.06</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.74</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.25</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.42</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.23</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.73</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1pt" valign="bottom">
    <TD colspan="21" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Results of Operations for the Six Months Ended June&nbsp;30, 2009 and 2008</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Overview. </I></B>Net income increased $621,000, or 134.1%, for the six months ended June&nbsp;30, 2009 as
compared to the six months ended June&nbsp;30, 2008. Factors that contributed to the increase in net
income were an increase in net interest income of $347,000, a decrease in provision for loan losses
of $169,000, an increase in noninterest income of $304,000, a decrease in noninterest expense of
$53,000, partially offset by an increase in income tax expense of $253,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Net Interest Income. </I></B>Net interest income increased by $347,000, or 8.3%, to $4.5&nbsp;million for
the six months ended June&nbsp;30, 2009 as compared to the six months ended June&nbsp;30, 2008. Total
interest income decreased by $325,000, or 4.1%, to $7.5&nbsp;million for the six months ended June&nbsp;30,
2009 as compared to the six months ended June&nbsp;30, 2008, primarily as a result of a decrease in
market interest rates. Interest income on loans decreased $147,000, or 2.1%, to $6.8&nbsp;million
during the six months ended June&nbsp;30, 2009 due to a decrease in market interest rates, while average
outstanding loans increased $15.0&nbsp;million, or 8.4%, to $194.0&nbsp;million during the period due to
continued loan portfolio development in our Bradley County branches and an increased demand for
loans in the lower interest rate environment. The average yield on the loan portfolio decreased by
0.75% during the six months ended June&nbsp;30, 2009 primarily as a result of a decrease in market
interest rates. The average balance of investments decreased $2.6&nbsp;million, or 8.3%, to $28.9
million for the six months ended June&nbsp;30, 2009 as compared to the six months ended June&nbsp;30, 2008,
primarily as a result of $5.7&nbsp;million in investment securities being called during the 2009 period.
In addition, the average balance and yield earned on overnight investments decreased for the six
months ended June&nbsp;30, 2009 due to lower levels of excess funding and a decrease in market interest
rates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense decreased $672,000, or 18.3%, to $3.0&nbsp;million for the six months ended
June&nbsp;30, 2009 due to a 76 basis point decrease in average interest-bearing deposit costs, partially
offset by a $1.8&nbsp;million increase in average interest-bearing deposit balances. Our average
outstanding balance of borrowings increased $3.8&nbsp;million to $12.7&nbsp;million for the six months ended
June&nbsp;30, 2009 and our weighted average cost of borrowings decreased by 14 basis points during the
period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Provision for Loan Losses. </I></B>The provision for loan losses was $118,000 for the six months
ended June&nbsp;30, 2009 compared to $287,000 for the six months ended June&nbsp;30, 2008. The decrease in
the provision was due to a $1.6&nbsp;million reduction in adversely classified assets during the 2009
period. During the six months ended June&nbsp;30, 2009, a $2.7&nbsp;million loan for the acquisition and
development of a residential subdivision was acquired by foreclosure and sold to another party.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->59<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Average Balances and Yields</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables present information regarding average balances of assets and liabilities,
the total dollar amounts of interest income and dividends from average interest-earning assets, the
total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting
annualized average yields and costs. The yields and costs for the periods indicated are derived by
dividing income or expense by the average balances of assets or liabilities, respectively, for the
periods presented. Average balances have been calculated using daily balances. Nonaccrual loans
are included in average balances only. Loan fees are included in interest income on loans and are
not material. Tax exempt income on loans and on investment and mortgage-backed securities has been
calculated on a tax equivalent basis using a federal marginal tax rate of 38.3%.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>At June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000"><B>Six Months Ended June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield/</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield/</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield/</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Dollars in thousands)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Balance</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Dividends</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Balance</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Dividends</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Assets:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest-bearing deposits at other financial institutions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.80</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.26</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.44</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,049</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">179,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,611</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,883</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,872</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">222,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.03</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">249,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">242,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Liabilities and equity:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Demand and NOW accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">41,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40,392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Money market accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.87</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Passbook savings accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.74</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Certificates of deposit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total interest-bearing deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.95</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements
to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">213,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">207,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-interest-bearing deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other non-interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">224,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,486</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total liabilities and equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">249,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">242,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest rate spread</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net interest margin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.73</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Average interest-earning assets to average interest-bearing
liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">108.03</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">107.50</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->60<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="34" style="border-bottom: 1px solid #000000"><B>Year Ended December 31,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield/</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield/</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Yield/</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(Dollars in thousands)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Balance</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Dividends</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Balance</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Dividends</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Balance</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Dividends</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Assets:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest-bearing deposits at other
financial institutions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.60</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.15</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">185,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,582</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.67</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">226,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,457</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">184,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.94</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">245,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">224,798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">199,585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Liabilities and equity:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Demand and NOW accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,821</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Money market accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Passbook savings accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,851</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Certificates of deposit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,953</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.05</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total interest-bearing deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">199,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">152,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.08</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreements
to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.08</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">210,937</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">191,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">167,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-interest-bearing deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other non-interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221,994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total liabilities and equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">245,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">224,798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">199,585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest rate spread</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.79</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net interest margin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.07</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Average interest-earning assets to average
interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">107.20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">107.67</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">109.99</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->61<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Rate/Volume Analysis. </I></B>The following table sets forth the effects of changing rates and
volumes on our net interest income. The rate column shows the effects attributable to changes in
rate (changes in rate multiplied by prior volume). The volume column shows the effects
attributable to changes in volume (changes in volume multiplied by prior rate). The net column
represents the sum of the prior columns. Changes attributable to changes in both rate and volume
have been allocated proportionally based on the absolute dollar amounts of change in each.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Six Months Ended June 30, 2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended December 31, 2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended December 31, 2007</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Compared to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Compared to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Compared to</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Six Months Ended June 30, 2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Year Ended December 31, 2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Year Ended December 31, 2006</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Increase (Decrease)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Increase (Decrease)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Increase (Decrease)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Due to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Due to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Due to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">(In thousands)</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Volume</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Rate</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Net</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Volume</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Rate</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Net</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Volume</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Rate</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Net</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest-bearing deposits at
other financial institutions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(42</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(53</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(108</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(116</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(224</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">196</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,314</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(147</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,736</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,333</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,107</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(162</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(200</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(77</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(68</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(145</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(195</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(66</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(487</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">215</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(88</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(63</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(93</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(163</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="35" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total interest-earning assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(837</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(325</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,555</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,682</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="35" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(702</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(732</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(615</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,905</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(102</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(56</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(34</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(90</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(80</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(83</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under agreement to
repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="35" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total interest-bearing liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(805</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(672</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(656</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,824</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="35" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net increase (decrease)&nbsp;in
interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(32</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(899</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">397</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">858</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Noninterest Income. </I></B>Noninterest income increased $304,000 to $2.5&nbsp;million during the six
months ended June&nbsp;30, 2009 from $2.2&nbsp;million for the six months ended June&nbsp;30, 2008. Factors that
contributed to the increase in noninterest income during the 2009 period were a $31,000 increase in
fees on deposit accounts and a $24,000 increase in fees related to debit cards. Decreases in other
charges and fees were primarily the result of a reduction in origination fees related to non-real
estate secured loans, which also experienced a decrease in volume between the two periods.
Investment sales commissions decreased during the six months ended June&nbsp;30, 2009 due to a decline
in the value of investments. Other noninterest income increased during the 2009 period primarily
due to an increase of $349,000 in fees related to the origination and sale of fixed-rate mortgage
loans into the secondary market. These amounts were unusually high due to low interest rate levels
and an increase in refinancing transactions during the six months ended June&nbsp;30, 2009. We do not
anticipate that this significant increase in other noninterest income will continue.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Noninterest Expense. </I></B>Noninterest expense decreased $53,000 for the six months ended June&nbsp;30,
2009 as compared to the six months ended June&nbsp;30, 2008. Salary and benefits expense decreased by
$226,000 primarily due to reductions in staffing levels at TiServ, Inc. and lower levels of
commissions paid to loan origination officers. Federal Deposit Insurance Corporation premiums
increased by $258,000 for the six months ended June&nbsp;30, 2009 as compared to the six-month period
ended June&nbsp;30, 2008 primarily as a result of higher assessment rates and a $109,000 one-time
special assessment imposed by the Federal Deposit Insurance Corporation during the 2009 period.
Data processing fees decreased by $109,000 during the six months ended June&nbsp;30, 2009 as a result of
revised contract terms negotiated with our provider of core processing services during the fourth
quarter of 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Income Tax Expense. </I></B>Income tax expense increased by $253,000 for the six months ended June
30, 2009 as compared to the six month period ended June&nbsp;30, 2008 primarily due to an increase in
pre-tax income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Results of Operations for the Years Ended December&nbsp;31, 2008 and 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Overview. </I></B>Net income decreased $11,000, or 1.0%, to $1.1&nbsp;million for the year ended December
31, 2008 compared to the year ended December&nbsp;31, 2007. Our primary source of income during each of
the years ended
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->62<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">December&nbsp;31, 2008 and 2007 was net interest income, which increased from $8.3&nbsp;million at December
31, 2007 to $8.4&nbsp;million at December&nbsp;31, 2008. Noninterest income increased by $131,000 during the
year ended December&nbsp;31, 2008 while noninterest expense decreased by $181,000 during fiscal 2008.
We opened two new branch offices in Bradley County in early 2007 and additional expenses related to
starting those operations, which are not amortized, were realized during the year ended December
31, 2007. Employee performance bonuses for our officers are typically expensed in the year they
occur, but paid in the first quarter of the following year after full results of the operating year
are known. During the year ended December&nbsp;31, 2008, our compensation committee, board of directors
and senior management determined that events in the general economy, and more particularly in the
housing and commercial lending markets, might require us to retain additional capital.
Accordingly, officer performance incentive bonuses accrued throughout the year in 2008 were
reversed in the fourth quarter of 2008, which decreased noninterest expense by $263,000. Cash
performance bonuses paid to officers in the first quarter of 2008 were expensed during the year
ended December&nbsp;31, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Net Interest Income. </I></B>Net interest income increased by $91,000, or 1.1%, for the year ended
December&nbsp;31, 2008 as compared to the year ended December&nbsp;31, 2007, primarily due to increases in
loans, deposits and borrowings resulting from our new Bradley County branches and lower market
interest rates. Total interest income increased by $123,000, or 0.8%, and loan interest income
increased by $403,000, or 3.0%, during the year ended December&nbsp;31, 2008, due primarily to an
increase in average loan balances of $21.2&nbsp;million, or 12.9%, during fiscal 2008. Total interest
expense increased by $32,000, or 0.5%, during the year ended December&nbsp;31, 2008, while average
interest bearing liabilities increased $19.5&nbsp;million, or 10.2%, due primarily to an increase in
deposits of $9.1&nbsp;million, or 4.6%, resulting from our new Bradley County branches and more
aggressive deposit solicitation efforts. Federal Home Loan Bank of Cincinnati advances at December
31, 2008 totaled $16.3&nbsp;million as compared to $5.5&nbsp;million at December&nbsp;31, 2007 as we utilized
favorable rates to fund lending.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Provision for Loan Losses. </I></B>The provision for loan losses was $761,000 for the year ended
December&nbsp;31, 2008 as compared to $443,000 for the year ended December&nbsp;31, 2007. The increase in
the provision was attributable to increases in classified assets and increases in evaluated
qualitative risk factors, primarily related to prevailing economic conditions, used to determine
the overall risk inherent in our loan portfolio during the year ended December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Noninterest Income. </I></B>During the year ended December&nbsp;31, 2008, total noninterest income
increased $131,000, or 3.3%, as compared to the year ended December&nbsp;31, 2007. The increase in
noninterest income was primarily the result of an increase of $242,000 in net fees related to
deposit overdraft fees, a $62,000 increase in income from debit cards, a $127,000 decrease in other
fees and charges from Valley Title Services, LLC due to decreased loan demand, and a $59,000
reduction in fees and charges relating to consumer finance loans made by Southland Finance, Inc.
due to decreased loan demand.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Noninterest Expense. </I></B>Non-interest expense decreased by $181,000, or 1.73%, for the year ended
December&nbsp;31, 2008 as compared to the year ended December&nbsp;31, 2007. The primary factors effecting
the change were a $181,000 reduction in salary and benefits expense, which was primarily the result
of a decrease in salary expense relating to a reduction in staffing at Valley Title Services, LLC,
and a reduction in occupancy expense and equipment due to capitalized equipment expenses relating
to the opening of our two new Bradley County branches in 2007. Federal Deposit Insurance
Corporation insurance premium costs increased $62,000 during the year ended December&nbsp;31, 2008 due
to a one-time assessment credit being fully used during the fourth quarter of 2007. Data
processing costs increased $86,000 during the year ended December&nbsp;31, 2008 due to increased account
growth related to our opening of our Bradley County branches. Advertising expenses decreased by
$104,000 during the year ended December&nbsp;31, 2008 as we reduced previous marketing efforts
associated with the opening of our Bradley County branches in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Income Tax Expense. </I></B>Provision for income taxes increased $95,000, or 24.2%, during the year
ended December&nbsp;31, 2008 primarily due to increased pre-tax income.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->63<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risk Management</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Overview. </I></B>Managing risk is an essential part of successfully managing a financial
institution. Our most prominent risk exposures are credit risk, interest rate risk and market
risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a
loan or investment when it is due. Interest rate risk is the potential reduction of interest
income as a result of changes in interest rates. Market risk arises from fluctuations in interest
rates that may result in changes in the values of financial instruments, such as available-for-sale
securities that are accounted for on a mark-to-market basis. Other risks that we face are
operational risk, liquidity risks and reputation risk. Operational risks include risks related to
fraud, regulatory compliance, processing errors, technology and disaster recovery. Liquidity risk
is the possible inability to fund obligations to depositors, lenders or borrowers. Reputation risk
is the risk that negative publicity or press, whether true or not, could cause a decline in our
customer base or revenue.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Credit Risk Management. </I></B>Our strategy for credit risk management focuses on having
well-defined credit policies and uniform underwriting criteria and providing prompt attention to
potential problem loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When a borrower fails to make a required loan payment, we take a number of steps to have the
borrower cure the delinquency and restore the loan to current status. When the loan becomes 15&nbsp;day
past due, a late notice is sent to the borrower. When the loan becomes 30&nbsp;days past due, a more
formal letter is sent. Between 15 and 30&nbsp;days past due, telephone calls are also made to the
borrower. After 30&nbsp;days, we regard the borrower in default. At 60&nbsp;days delinquent, the borrower
may be sent a letter from our attorney and we may commence collection proceedings. If a
foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced
before the foreclosure sale, the real property securing the loan generally is sold at foreclosure.
Generally, when a consumer loan becomes 60&nbsp;days past due, we institute collection proceedings and
attempt to repossess any personal property that secures the loan. Management informs the board of
directors monthly of the amount of loans delinquent more than 30&nbsp;days, all loans in foreclosure and
repossessed property that we own.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Analysis of Nonperforming and Classified Assets. </I></B>We consider repossessed assets and loans
that are 90&nbsp;days or more past due to be nonperforming assets. Loans are generally placed on
nonaccrual status when they become 90&nbsp;days delinquent at which time the accrual of interest ceases
and the allowance for any uncollectible accrued interest is established and charged against
operations. Typically, payments received on a nonaccrual loan are first applied to the outstanding
principal balance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is
classified as real estate owned until it is sold. When property is acquired it is recorded at the
lower of its cost, which is the unpaid balance of the loan plus foreclosure costs, or fair market
value at the date of foreclosure. Any holding costs and declines in fair value after acquisition
of the property result in charges against income.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->64<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information with respect to our nonperforming assets at the dates
indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>At June 30,</B></TD>
    <TD>&nbsp;</TD>

    <TD nowrap align="center" colspan="23" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>


</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Non-accrual loans:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accruing loans past due 90&nbsp;days or more:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total of non-accrual and 90&nbsp;days or
more past due loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real estate owned</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other non-performing assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total non-performing assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,428</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Troubled debt restructurings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">210</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Troubled debt restructurings and
total non-performing assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">341</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total non-performing loans to total loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.41</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.08</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.11</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.45</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.07</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total non-performing loans to total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.33</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.66</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.16</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.08</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.33</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.05</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total non-performing assets and troubled
debt restructurings to total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.93</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.21</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.59</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase in non-performing loans from December&nbsp;31, 2007 to December&nbsp;31, 2008 was
attributable to a $2.7&nbsp;million non-residential real estate development loan, a $140,000 speculative
residential construction loan, a $228,000 commercial business loan secured by non-real estate
assets of a trucking company, and several residential real estate loans totaling $539,000 where
borrowers were unable to meet their contractual obligations due to job loss or other factors that
impeded their ability to repay such loans. During the six months ended June&nbsp;30, 2009, the $2.7
million non-residential real estate development loan discussed above was foreclosed on and
refinanced with a third party borrower and the $228,000 commercial business loan discussed above
was charged off.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We periodically modify loans to extend the term or make other concessions to help borrowers
stay current on their loan and to avoid foreclosure. We do not forgive principal or interest on
loans or modify the interest rates on loans to rates that are below market rates. At June&nbsp;30,
2009, we had $1.2&nbsp;million of these modified loans, which are also referred to as troubled debt
restructurings, as compared to $267,000 at December&nbsp;31, 2008. The increase in troubled debt
restructurings during the six months ended June&nbsp;30, 2009 was the result of restructuring a $1.0
million commercial real estate loan to interest-only payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income that would have been recorded for the six months ended June&nbsp;30, 2009 and the
year ended December&nbsp;31, 2008, had non accruing loans been current according to their original
terms, amounted to $78,000 and $158,000, respectively. Interest income of $11,700 and $406,000
related to non-performing loans was included in interest income for the six months ended June&nbsp;30,
2009 and the year ended December&nbsp;31, 2008, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal regulations require us to review and classify our assets on a regular basis. In
addition, the Office of Thrift Supervision has the authority to identify problem assets and, if
appropriate, require them to be classified. There are three classifications for problem assets;
substandard, doubtful and loss. &#147;Substandard assets&#148; must have one or more defined weakness and
are characterized by the distinct possibility that we will sustain some loss if the deficiencies
are not corrected. &#147;Doubtful assets&#148; have the weaknesses of substandard assets with the additional
characteristic that the weaknesses make collection or liquidation in full on the basis of currently
existing facts,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->65<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">conditions and values questionable, and there is a high possibility of loss. An asset classified
&#147;loss&#148; is considered uncollectible and of such little value that continuance as an asset of the
institution is not warranted. The regulations also provide for a &#147;special mention&#148; category,
described as assets which do not currently expose an institution to a sufficient degree of risk to
warrant classification but do possess credit deficiencies or potential weaknesses deserving close
attention. When we classify an asset as substandard or doubtful we may establish a specific
allowance for loan losses. If we classify an asset as loss, we charge off an amount equal to 100%
of the portion of the asset classified loss.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the aggregate amounts of our classified assets at the dates
indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>At June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 01px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Special mention assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,617</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Substandard assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">728</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Doubtful assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">734</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total classified assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,079</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified assets include loans that are classified due to factors other than payment
delinquencies, such as lack of current financial statements and other required documentation,
insufficient cash flows or other deficiencies, and, therefore are not included as non-performing
assets. Other than as disclosed in the above tables, there are no other loans where management has
serious doubts about the ability of the borrowers to comply with the present loan repayment terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Delinquencies. </I></B>The following table provides information about delinquencies (excluding
non-accrual loans) in our loan portfolio at the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 0px solid #000000"><B>At June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 0px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>

    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>

    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>

    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>30-89 Days</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>90 Days or More</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>30-89 Days</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>90 Days or More</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="31" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>30-89 Days</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>90 Days or More</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>30-89 Days</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>90 Days or More</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Loans</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="31" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->66<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Analysis and Determination of the Allowance for Loan Losses</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The allowance for loan losses is a valuation allowance for probable losses inherent in the
loan portfolio. We evaluate the need to establish allowances against losses on loans on a monthly
basis. When additional allowances are necessary, a provision for loan losses is charged to
earnings. Our methodology for assessing the appropriateness of the allowance for loan losses is
reviewed periodically by the board of directors. The board of directors also reviews the allowance
for loan losses established on a quarterly basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>General Valuation Allowance. </I></B>We establish a general valuation allowance for loans that should
be adequate to reserve for the estimated credit losses inherent in each segment of our loan
portfolio, given the facts and circumstances as of the valuation date for all loans in the
portfolio that have not been classified. The allowance is based on our average annual rate of net
charge offs experienced over the previous three years on each segment of the portfolio and is
adjusted for current qualitative factors. If historical loss data is not available for a segment,
the estimates used will be no less than the industry average for that segment. For purposes of
determining the estimated credit losses, the loan portfolio is segmented as follows: (i)
residential real estate loans (one- to four-family); (ii)&nbsp;commercial real estate loans; (iii)
commercial loans (secured); (iv)&nbsp;commercial loans (unsecured and leases); and (v)&nbsp;consumer loans.
Qualitative factors that are considered in determining the adequacy of the allowance for loan
losses are as follows: (i)&nbsp;trends of delinquent and non-accrual loans; (ii)&nbsp;economic factors; (iii)
concentrations of credit; (iv)&nbsp;changes in the nature and volume of the loan portfolio; and (v)
changes in lending staff and loan policies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Specific Valuation Allowance. </I></B>In accordance with FASB 114, <I>&#147;Accounting for Creditors for
Impairment of a Loan,&#148; </I>all adversely classified loans meeting the following loan balance thresholds
will be individually reviewed: (i)&nbsp;residential loans greater than $100,000; (ii)&nbsp;commercial real
estate loans and land loans greater than $50,000; (iii)&nbsp;consumer loans greater than $25,000; and
(iv)&nbsp;all other commercial loans. Any portion of the recorded investment in excess of the fair
value of the collateral that can be identified as uncollectible will be charged off against the
allowance for loan losses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We establish a specific allowance for loan losses for 100% of the assets or portions thereof
classified as loss. The amount of the loss will be the excess of the recorded investment in the
loan over the fair value of collateral estimated on the date that a probable loss is identified.
Lending management will use updated appraisals, National Automobile Dealers Association values, or
other prudent sources for determining collateral value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All other adversely classified loans as well as special mention and watch loans will be
reviewed in accordance with FASB 5, <I>&#147;Accounting for Contingencies.&#148; </I>Our historical loss experience
in each category of loans will be utilized in determining the allowance for that group. The loss
history will be based on the average actual loss sustained from the sale of real estate owned. If
we have not experienced any losses in a particular category, the factor will be determined from
either the loss history of a reasonably similar category or the peer group industry average. The
determined loss factor in each loan category may be adjusted for qualitative factors as determined
by management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Unallocated Valuation Allowance. </I></B>Our allowance for loan losses methodology also includes an
unallocated component to reflect the margin of imprecision inherent in the underlying assumptions
used in the methodologies for estimating specific and general losses in the loan portfolio.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->67<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the breakdown of the allowance for loan losses by loan category
at the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>At June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="23" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans in</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans in</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans in</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Category</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Category</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Category</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential real estate (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">27.77</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">51.10</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">29.39</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">51.58</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">39.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">52.41</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-residential real estate (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.98</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="35" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,457</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unallocated</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="5" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total allowance for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="35" style="border-bottom: 1px solid #000000"><B>At December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans in</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans in</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans in</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Category</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Category</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Category</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Allowance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Loans</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Residential real estate (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.53</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">52.61</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11.41</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">56.36</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.04</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">57.77</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-residential real estate (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.79</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="35" align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unallocated</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="5" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total allowance for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    </TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes construction loans.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we believe that we use the best information available to establish the allowance for
loan losses, future adjustments to the allowance for loan losses may be necessary and our results
of operations could be adversely affected if circumstances differ substantially from the
assumptions used in making the determinations. Furthermore, while we believe we have established
our allowance for loan losses in conformity with generally accepted accounting principles, there
can be no assurance that the Office of Thrift Supervision, in reviewing our loan portfolio, will
not require us to increase our allowance for loan losses. The Office of Thrift Supervision may
require us to increase our allowance for loan losses based on judgments different from ours. In
addition, because future events affecting borrowers and collateral cannot be predicted with
certainty, there can be no assurance that the existing allowance for loan losses is adequate or
that increases will not be necessary should the quality of any loans deteriorate as a result of the
factors discussed above. Any material increase in the allowance for loan losses may adversely
affect our financial condition and results of operation.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->68<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Analysis of Loan Loss Experience. </I></B>The following table sets forth an analysis of the allowance
for loan losses for the periods indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses at beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,830</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">267</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Charge offs:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">227</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total charge-offs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">264</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recoveries:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Non-residential real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial business</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consumer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total recoveries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net charge-offs (recoveries)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses at end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,895</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="27" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses to non-performing
loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">345.04</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">475.24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">73.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">704.52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,457.43</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">326.81</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,285.64</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses to total loans
outstanding at the end of the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.39</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.45</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.58</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.52</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net charge-offs (recoveries)&nbsp;to average
loans outstanding during the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.22</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.04</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.12</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.29</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.13</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.14</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.18</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Interest Rate Risk Management. </I></B>We manage the interest rate sensitivity of our
interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse
effects of changes in the interest rate environment. Deposit accounts typically react more quickly
to changes in market interest rates than mortgage loans because of the shorter maturities of
deposits. As a result, sharp increases in interest rates may adversely affect our earnings while
decreases in interest rates may beneficially affect our earnings. To reduce the potential
volatility of our earnings, we have sought to improve the match between asset and liability
maturities and rates, while maintaining an acceptable interest rate spread. Our strategy for
managing interest rate risk emphasizes: adjusting the maturities of borrowings; adjusting the
investment portfolio mix and duration and generally selling in the secondary market substantially
all newly originated fixed rate one-to-four-family residential real estate loans. We currently do
not participate in hedging programs, interest rate swaps or other activities involving the use of
derivative financial instruments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have an Asset/Liability Management Committee, which includes members of management approved
by the board of directors, to communicate, coordinate and control all aspects involving
asset/liability management. The committee establishes and monitors the volume, maturities, pricing
and mix of assets and funding sources with the objective of managing assets and funding sources to
provide results that are consistent with liquidity, growth, risk limits and profitability goals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our goal is to manage asset and liability positions to moderate the effects of interest rate
fluctuations on net interest and net income.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->69<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Net Portfolio Value Analysis. </I></B>We use the net portfolio value analysis prepared by the Office
of Thrift Supervision to review our level of interest rate risk. This analysis measures interest
rate risk by capturing changes in net portfolio value of our cash flows from assets, liabilities
and off-balance sheet items, based on a range of assumed changes in market interest rates. Net
portfolio value represents the market value of portfolio equity and is equal to the market value of
assets minus the market value of liabilities, with adjustments made for off-balance sheet items.
These analyses assess the risk of loss in market risk-sensitive instruments in the event of a
sudden and sustained 100 to 300 basis point increase or 100 basis point decrease in market interest
rates with no effect given to any steps that we might take to counter the effect of that interest
rate movement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table, which is based on information that we provide to the Office of Thrift
Supervision, presents the change in our net portfolio value at June&nbsp;30, 2009 that would occur in
the event of an immediate change in interest rates based on Office of Thrift Supervision
assumptions, with no effect given to any steps that we might take to counteract that change.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Net Portfolio Value as % of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Net Portfolio Value</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Portfolio Value of Assets</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 0px solid #000000"><B>Basis Point (&#147;bp&#148;)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 0px solid #000000"><B>(Dollars in thousands)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="center"><B>Change
in Rates</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$ Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>$ Change</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% Change</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>NPV Ratio</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Change</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-15px">300</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">33,485</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,189</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.30</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">63bp</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-15px">200</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">33,313</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,017</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.16</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">50bp</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:30px; text-indent:-15px">100</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">33,048</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">752</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.00</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">33bp</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:45px; text-indent:-15px">0</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">32,296</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12.67</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="center" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:15px; text-indent:-15px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(100)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">31,013</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">(1,283</TD>
    <TD nowrap valign="top">)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">(4</TD>
    <TD nowrap valign="top">)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12.16</TD>
    <TD nowrap valign="top">%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">&nbsp;&nbsp;(51)bp</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Office of Thrift Supervision uses various assumptions in assessing interest rate risk.
These assumptions relate to interest rates, loan prepayment rates, deposit decay rates and the
market values of certain assets under differing interest rate scenarios, among others. As with any
method of measuring interest rate risk, certain shortcomings are inherent in the methods of
analysis presented in the foregoing tables. For example, although certain assets and liabilities
may have similar maturities or periods to repricing, they may react in different degrees to changes
in market interest rates. Also, the interest rates on certain types of assets and liabilities may
fluctuate in advance of changes in market interest rates, while interest rates on other types may
lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage
loans, have features that restrict changes in interest rates on a short-term basis and over the
life of the asset. Further, if there is a change in interest rates, expected rates of prepayments
on loans and early withdrawals from certificates could deviate significantly from those assumed in
calculating the table. Prepayment rates can have a significant impact on interest income. Because
of the large percentage of loans and mortgage-backed securities we hold, rising or falling interest
rates have a significant impact on the prepayment speeds of our earning assets that in turn affect
the rate sensitivity position. When interest rates rise, prepayments tend to slow. When interest
rates fall, prepayments tend to rise. Our asset sensitivity would be reduced if prepayments slow
and vice versa. While we believe these assumptions to be reasonable, there can be no assurance
that assumed prepayment rates will approximate actual future mortgage-backed security and loan
repayment activity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Liquidity Management. </I></B>Liquidity is the ability to meet current and future financial
obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan
repayments, maturities and sales of investment securities and borrowings from the Federal Home Loan
Bank of Cincinnati. While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by
general interest rates, economic conditions and competition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We regularly adjust our investments in liquid assets based upon our assessment of (i)&nbsp;expected
loan demand, (ii)&nbsp;expected deposit flows, (iii)&nbsp;yields available on interest-earning deposits and
securities and (iv)&nbsp;the objectives of our asset/liability management policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our most liquid assets are cash and cash equivalents and interest-bearing deposits. The level
of these assets depends on our operating, financing, lending and investing activities during any
given period. At June&nbsp;30, 2009,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->70<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">cash and cash equivalents totaled $9.8&nbsp;million. Securities classified as available-for-sale,
amounting to $22.6&nbsp;million and interest bearing deposits in banks of $981,000 at June&nbsp;30, 2009,
provide additional sources of liquidity. In addition, at June&nbsp;30, 2009, we had the ability to
borrow a total of approximately $57.0&nbsp;million from the Federal Home Loan Bank of Cincinnati. At
June&nbsp;30, 2009 we had $10.4&nbsp;million in Federal Home Loan Bank advances outstanding and $12.0&nbsp;million
in letters of credit to secure public funds deposits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2009 we had $6.9&nbsp;million in commitments to extend credit outstanding.
Certificates of deposit due within one year of June&nbsp;30, 2009 totaled $70.4&nbsp;million, or 61.2% of
certificates of deposit. We believe the large percentage of certificates of deposit that mature
within one year reflects customers&#146; hesitancy to invest their funds for long periods due to the
recent low interest rate environment and local competitive pressure. If these maturing deposits do
not remain with us, we will be required to seek other sources of funds, including other
certificates of deposit and borrowings. Depending on market conditions, we may be required to pay
higher rates on such deposits or other borrowings than we currently pay on the certificates of
deposit due on or before June&nbsp;30, 2010. We believe, however, based on past experience, that a
significant portion of our certificates of deposit will remain with us. We have the ability to
attract and retain deposits by adjusting the interest rates offered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables present certain of our contractual obligations as of June&nbsp;30, 2009 and
December&nbsp;31, 2008.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>Payments due by period</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>One to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Three to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>More Than</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Contractual Obligations</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>One Year</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Three Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Five Years</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Five Years</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>(In thousands)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>At June&nbsp;30, 2009:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred director fee arrangements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">147</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred compensation arrangements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,052</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,053</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">776</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>At December&nbsp;31, 2008:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred director fee arrangements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">166</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred compensation arrangements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">727</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary investing activities are the origination of loans and the purchase of securities.
Our primary financing activities consist of activity in deposit accounts and Federal Home Loan Bank
advances. Deposit flows are affected by the overall level of interest rates, the interest rates
and product offered by us and our local competitors and other factors. We generally manage the
pricing of our deposits to be competitive. Occasionally, we offer promotional rates on certain
deposit products to attract deposits.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->71<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Financing and Investing Activities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents our primary investing and financing activities during the periods
indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(In thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investing activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan originations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,768</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan principal repayments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,855</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,955</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from calls, maturities and principal
repayments of investment securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,435</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from calls, maturities and principal
repayments of mortgage-backed and related
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,579</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,641</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from sales of investment securities
available-for-sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,020</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from sales of mortgage-backed
and related securities available-for-sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of investment securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,290</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of mortgage-backed
and related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financing activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase (decrease)&nbsp;in deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,574</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,776</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase (decrease)&nbsp;in Federal Home Loan Bank
advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,932</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10,098</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,030</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase (decrease)&nbsp;in securities sold under
agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(239</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(530</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">260</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Capital Management. </I></B>We are subject to various regulatory capital requirements administered by
the Office of Thrift Supervision, including a risk-based capital measure. The risk-based capital
guidelines include both a definition of capital and a framework for calculating risk-weighted
assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At
June&nbsp;30, 2009, we exceeded all of our regulatory capital requirements and were considered &#147;well
capitalized&#148; under regulatory guidelines. See <I>&#147;Regulation and Supervision&#151;Regulation of Federal
Savings Associations&#151;Capital Requirements,&#148; &#147;Regulatory Capital Compliance&#148; </I>and note 10 of the
notes to consolidated financial statements included in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This offering is expected to increase our consolidated equity by $17.3&nbsp;million, to $42.7
million at the maximum of the offering range. Following completion of this offering, we also will
manage our capital for maximum shareholder benefit. The capital from the offering will
significantly increase our liquidity and capital resources. Over time, the initial level of
liquidity will be reduced as net proceeds from the stock offering are used for general corporate
purposes, including the funding of lending activities. Our financial condition and results of
operations will be enhanced by the capital from the offering, resulting in increased net
interest-earning assets and net income. However, the large increase in equity resulting from the
capital raised in the offering will, initially, have an adverse impact on our return on equity.
Following the offering, we may use capital management tools such as cash dividends and common share
repurchases. However, under Office of Thrift Supervision regulations, we will not be allowed to
repurchase any shares during the first year following the offering, except to fund the restricted
stock awards under the equity benefit plan after its approval by shareholders, unless extraordinary
circumstances exist and we receive regulatory approval.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Off-Balance Sheet Arrangements. </I></B>In the normal course of operations, we engage in a variety of
financial transactions that, in accordance with generally accepted accounting principles, are not
recorded in our financial statements. These transactions involve, to varying degrees, elements of
credit, interest rate and liquidity risk. Such transactions are used primarily to manage
customers&#146; requests for funding and take the form of loan commitments, unused lines of credit and
letters of credit. For information about our loan commitments, unused lines of credit and letters
of credit, see note 18 of the notes to consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->72<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended June&nbsp;30, 2009 and the year ended December&nbsp;31, 2008, we did not engage
in any off-balance sheet transactions reasonably likely to have a material effect on our financial
condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Impact of Recent Accounting Pronouncements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a discussion of the impact of recent accounting pronouncements, see note 1 of the notes to
consolidated financial statements included in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Effect of Inflation and Changing Prices</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements and related financial data presented in this prospectus
have been prepared according to generally accepted accounting principles in the United States,
which require the measurement of financial positions and operating results in terms of historical
dollars without considering the change in the relative purchasing power of money over time due to
inflation. The primary impact of inflation on our operations is reflected in increased operating
costs. Unlike most industrial companies, virtually all the assets and liabilities of a financial
institution are monetary in nature. As a result, interest rates generally have a more significant
impact on a financial institution&#146;s performance than do general levels of inflation. Interest
rates do not necessarily move in the same direction or to the same extent as the prices of goods
and services.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->73<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="142"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Our Management</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The board of directors of Athens Bancshares Corporation and Athens Federal Community Bank are
each comprised of eight persons who are elected for terms of three (3)&nbsp;years, approximately
one-third of whom are elected annually. At the first annual meeting of shareholders of Athens
Bancshares Corporation, each director will be up for election for either a one-year, two-year or
three-year term so as to establish the initial classification of the board of directors. The same
individuals comprise the boards of directors of Athens Bancshares Corporation and Athens Federal
Community Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of our directors are independent under the current listing standards of the Nasdaq Stock
Market, except for Jeffrey L. Cunningham, who serves as President and Chief Executive Officer of
Athens Bancshares Corporation and Athens Federal Community Bank. In determining the independence
of directors, the board of directors considered the various deposit, loan and other relationships
that each director has with Athens Federal Community Bank, including loans and lines of credit made
to Directors Howard and Thompson, in addition to the transactions disclosed under <I>&#147;&#151;Transactions
with Athens Federal Community Bank,&#148; </I>but determined in each case that these relationships did not
interfere with their exercise of independent judgment in carrying out their responsibilities as a
director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information regarding the directors is provided below. Unless otherwise stated, each person
has held his or her current occupation for the last five years. Ages presented are as of June&nbsp;30,
2009. The starting year of service as director relates to service on the board of directors of
Athens Federal Community Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following directors have terms ending in 2010:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>G.&nbsp;Scott Hannah </I>is the retired owner of Hiwasee Sales, Inc., a wholesale beverage distributor.
Age 58. Director since 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>M.&nbsp;Darrell Murray </I>is a self-employed realtor and auctioneer. Age 63. Director since 1993.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Lyn B. Thompson </I>has worked as a self-employed certified public accountant since January&nbsp;2007.
From January&nbsp;2005 to January&nbsp;2007, Ms.&nbsp;Thompson served as Chief Financial Officer of Smoky
Management, LLC, a cash advance company. Prior to that, Ms.&nbsp;Thompson was a Director at G.R. Rush &#038;
Company, P.C., a certified public accounting firm. Age 49. Director since 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following directors have terms ending in 2011:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dr.&nbsp;James L. Carter, Jr. </I>is a retired dentist. Age 70. Director since 1987.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Larry D. Wallace </I>serves as Chairman of the Board of Directors of Athens Federal Community Bank
and Athens Bancshares Corporation. Mr.&nbsp;Wallace previously served as the Director of the Tennessee
Bureau of Investigation for 12&nbsp;years from 1992 through 2003. Upon his retirement as Director of
the Tennessee Bureau of Investigation, Mr.&nbsp;Wallace returned home to Athens, Tennessee and presently
serves Tennessee Wesleyan College as Vice President of Administration. Age 64. Director since
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following directors have terms ending in 2012:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Elaine M. Cathcart </I>is a retired realtor. Age 61. Director since 1993.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Jeffrey L. Cunningham </I>serves as President and Chief Executive Officer of Athens Bancshares
Corporation and Athens Federal Community Bank. Mr.&nbsp;Cunningham is a licensed attorney with
significant experience in real estate and probate law as well as general corporate and commercial
practice. Mr.&nbsp;Cunningham joined Athens Federal Community Bank as Chief Operating Officer in October
1999 and became President and Chief Executive Officer in March&nbsp;2000. Age 51. Director since 1992.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->74<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>G.&nbsp;Timothy Howard </I>is the President of Howard Brothers Logging, Inc., a timber products
company. Age 50. Director since 2001.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Executive Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The executive officers of Athens Bancshares Corporation and Athens Federal Community Bank are
elected annually by the board of directors and serve at the board&#146;s discretion. The executive
officers of Athens Bancshares Corporation and Athens Federal Community Bank are:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffrey L. Cunningham
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael R. Hutsell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Chief Operating Officer and
Chief Financial Officer</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jay Leggett, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">City President&#151;Cleveland</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ross A. Millsaps
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Chief Credit Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the formation of Athens Bancshares Corporation, none of the company&#146;s executive
officers, directors or other personnel have received remuneration from Athens Bancshares
Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Below is information regarding our other executive officers who are not also directors. Each
individual has held his current position for at least the last five years, unless otherwise stated.
Ages presented are as of June&nbsp;30, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Michael R. Hutsell </I>is Vice President, Chief Operating Officer and Chief Financial Officer of
Athens Bancshares Corporation and Athens Federal Community Bank. Mr.&nbsp;Hutsell joined Athens Federal
Community Bank in August&nbsp;1998. Age 42.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Jay Leggett, Jr. </I>has served as City President of Athens Federal Community Bank&#146;s Cleveland
Division since March&nbsp;2006. From November&nbsp;2003 to March&nbsp;2006, Mr.&nbsp;Leggett was Senior Vice President
of Lending for Bradley and Hamilton Counties, Tennessee at First Citizens Bank. Age 44.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Ross A. Millsaps </I>has served as Vice President and Chief Credit Officer of Athens Federal
Community Bank since April&nbsp;2006. Before that time, Mr.&nbsp;Millsaps was a bank regulatory examiner
with the Office of Thrift Supervision. Age 42.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Meetings and Committees of the Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conduct business through meetings of our board of directors and its committees. During the
year ended December&nbsp;31, 2008, the board of directors of Athens Federal Community Bank met 14 times.
Given that Athens Bancshares Corporation was incorporated in September&nbsp;2009, the board of directors
of Athens Bancshares Corporation did not meet during the year ended December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the formation of Athens Bancshares Corporation, the board of directors
established Audit, Compensation and Nominating and Corporate Governance Committees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee consists of Lyn B. Thompson (Chair), James L. Carter, Jr., G. Scott Hannah
and M. Darrell Murray. The Audit Committee is responsible for providing oversight relating to our
financial statements and financial reporting process, systems of internal accounting and financial
controls, internal audit function, annual independent audit and the compliance and ethics programs
established by management and the board. Each member of the Audit Committee is independent in
accordance with the listing standards of the Nasdaq Stock Market. The board of directors of Athens
Bancshares Corporation has designated Lyn B. Thompson as an audit committee financial expert under
the rules of the Securities and Exchange Commission. The Audit Committee of Athens Bancshares
Corporation did not meet during the year ended December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee consists of G. Scott Hannah (Chair), Elaine M. Cathcart and G.
Timothy Howard. The Compensation Committee is responsible for human resources policies, salaries
and benefits, incentive
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->75<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">compensation, executive development and management succession planning. Each member of the
Compensation Committee is independent in accordance with the listing standards of the Nasdaq Stock
Market. The Compensation Committee of Athens Bancshares Corporation did not meet during the year
ended December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating and Corporate Governance Committee consists of Dr.&nbsp;James L. Carter, Jr., Elaine
M. Cathcart, G. Scott Hannah, G. Timothy Howard, M. Darrell Murray, Lyn B. Thompson and Larry D.
Wallace. The Nominating and Corporate Governance Committee is responsible for identifying
individuals qualified to become board members and recommending a group of nominees for election as
directors at each annual meeting of shareholders, ensuring that the board and its committees have
the benefit of qualified and experienced independent directors, and developing a set of corporate
governance polices and procedures. Each member of the Nominating and Corporate Governance
Committee is independent in accordance with the listing standards of the Nasdaq Stock Market. The
Nominating and Corporate Governance Committee of Athens Bancshares Corporation did not meet during
the year ended December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of Athens Bancshares Corporation&#146;s committees listed above operates under a written
charter, which governs its composition, responsibilities and operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Corporate Governance Policies and Procedures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to having established committees of the board of directors, Athens Bancshares
Corporation has also adopted several policies to govern the activities of both Athens Bancshares
Corporation and Athens Federal Community Bank, including a corporate governance policy and a code
of business conduct and ethics. The corporate governance policy sets forth:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the duties and responsibilities of each director;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the composition, responsibilities and operation of the board of directors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the establishment and operation of board committees;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>succession planning;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>procedures for convening executive sessions of independent directors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the board of directors&#146; interaction with management and third parties; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the evaluation of the performance of the board of directors and chief executive
officer.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The code of business conduct and ethics, which applies to all employees and directors,
addresses conflicts of interest, the treatment of confidential information, general employee
conduct and compliance with applicable laws, rules and regulations. In addition, the code of
business conduct and ethics is designed to deter wrongdoing and to promote honest and ethical
conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with
all applicable laws, rules and regulations.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->76<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Executive Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Summary Compensation Table</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following information is furnished for the principal executive officer and the next two
most highly compensated executive officers of Athens Bancshares Corporation whose total
compensation for the year ended December&nbsp;31, 2008 exceeded $100,000.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name and Principal Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Salary (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Bonus</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey L. Cunningham</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">249,854</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">139,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">389,179</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>President &#038; Chief Executive Officer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael R. Hutsell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">162,893</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Vice President, Chief Operating Officer and<br>
Chief Financial Officer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>

<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jay Leggett, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,045</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>City President&#151;Cleveland</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For Mr.&nbsp;Cunningham, includes $18,000 received in board fees during the year ended
December&nbsp;31, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Details of the amounts disclosed in the &#147;All Other Compensation&#148; column are provided in
the table below:</TD>
</TR>

</TABLE>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Mr. Cunningham</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Mr. Hutsell</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Mr. Leggett</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employer contributions to 401(k) plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,582</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Supplemental executive retirement plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred compensation credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">45,033 </TD>
    <TD nowrap>(a)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Perquisites</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">21,900 </TD>
    <TD nowrap>(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20,919 </TD>
    <TD nowrap>(d)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">139,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35,501</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 3t">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents a non-cash credit by Athens Federal Community Bank to a deferred compensation
account for the benefit of Mr.&nbsp;Cunningham. See <I>&#147;&#151;Current Employment Agreement&#148; </I>below.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes an automobile allowance of $15,210 and $6,598 for country club dues and
employer paid insurance premiums.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(c)</TD>
    <TD>&nbsp;</TD>
    <TD>Did not exceed $10,000.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(d)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes an automobile allowance of $13,140 and $7,769 for country club dues and
employer paid insurance premiums.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Current Employment Agreement. </I></B>Athens Federal Community Bank has entered into an employment
agreement with Jeffrey L. Cunningham, our President and Chief Executive Officer. The agreement,
which became effective on January&nbsp;1, 2008, provides for a three-year term, subject to annual
renewal by the board of directors for an additional year beyond the then-current expiration date.
On January&nbsp;1, 2009, our board of directors renewed the agreement for an additional year,
effectively extending its term until December&nbsp;31, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the agreement Mr.&nbsp;Cunningham will be paid an annual base salary of $238,809 for fiscal
2009 and is eligible for additional cash compensation upon satisfaction of certain performance
based goals relating to Athens Federal Community Bank&#146;s annual net after-tax income. Pursuant to
the agreement, Athens Federal Community Bank will also make an annual contribution to a deferred
compensation account equal to 20% of Mr.&nbsp;Cunningham&#146;s annual base compensation. Mr.&nbsp;Cunningham&#146;s
interest in the deferred compensation vests at the rate of 1/3 on the date of credit and 1/3 on
each of the next two anniversaries of the date of credit if (i)&nbsp;Mr.&nbsp;Cunningham&#146;s employment
terminates during the year due to good reason (as such term is defined in the agreement), death or
disability or (ii)&nbsp;upon the satisfaction of certain performance based goals relating to Athens
Federal Community Bank&#146;s net after-tax income and regulatory examination ratings. In addition to
cash compensation, Mr.&nbsp;Cunningham is also eligible to participate in all standard benefit programs
sponsored by us, including family health insurance coverage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the terms of the agreement, in the event Mr.&nbsp;Cunningham&#146;s employment is terminated
by us for just cause, as such term is defined in the agreement, Mr.&nbsp;Cunningham will not be entitled
to receive any compensation for any period after his termination date. Alternatively, if Mr.
Cunningham&#146;s employment is
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->77<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">terminated by us without just cause, Mr.&nbsp;Cunningham will generally be entitled to the following
benefits: (i)&nbsp;his annual base salary for the remaining term of the agreement, plus an additional
year of base salary, and (ii)&nbsp;either (a)&nbsp;a lump sum cash payment equal to the present value of his
continued participation in our benefit programs through the expiration of the agreement or (b)
continued participation in such benefit programs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the agreement, if Mr.&nbsp;Cunningham voluntarily terminates his employment with us upon 90
days&#146; written notice, he will be entitled to receive his compensation and any vested benefits
(including any vested deferred compensation benefits) up to the date of his termination. However,
in the event that Mr.&nbsp;Cunningham voluntarily terminates his employment with us for an event that
constitutes good reason, as such term is defined in the agreement, and we fail to remedy such event
within the time frame set forth in the agreement, Mr.&nbsp;Cunningham will be entitled to receive
benefits as if he had been terminated by us without just cause.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event Mr.&nbsp;Cunningham&#146;s employment is terminated by us due to death, we will provide Mr.
Cunningham&#146;s beneficiary with the compensation due to Mr.&nbsp;Cunningham through the expiration date of
his employment agreement. If Mr.&nbsp;Cunningham&#146;s employment is terminated due to disability, as such
term is defined in the agreement, the agreement provides that Mr.&nbsp;Cunningham will be entitled to
compensation and benefits for (i)&nbsp;any period prior to the establishment of such disability during
which Mr.&nbsp;Cunningham is unable to work due to the physical or mental infirmity (ii)&nbsp;any period of
disability prior to his termination of employment; and (iii)&nbsp;for the remaining term of the
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Proposed Employment Agreements. </I></B>Upon completion of the conversion, Athens Federal Community
Bank and Athens Bancshares Corporation will enter into employment agreements with each of Messrs.
Cunningham, Hutsell and Leggett. The agreement with Mr.&nbsp;Cunningham will replace the agreement
currently in place between Mr.&nbsp;Cunningham and Athens Federal Community Bank. Our continued success
depends to a significant degree on the skills and competence of these officers, and the employment
agreements are intended to ensure that we maintain a stable management base following the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The employment agreements will each provide for three-year terms, subject to annual renewal by
the boards of directors for an additional year beyond the then-current expiration date. The
initial base salaries under the employment agreements will be $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
for Messrs.&nbsp;Cunningham, Hutsell and Leggett, respectively. The agreements also will provide for
participation in employee benefit plans and programs maintained for the benefit of employees and
senior management personnel, including incentive compensation, health and welfare benefits,
retirement benefits and certain fringe benefits as described in the agreements and, in the case of
Mr.&nbsp;Cunningham, continued annual contributions to his deferred compensation account at the same
rate as provided for in his existing agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon termination of an executive&#146;s employment for &#147;cause,&#148; as defined in the agreement, the
executive will receive no further compensation or benefits under the agreement. If we terminate
the executive for reasons other than cause, or if the executive resigns after the occurrence of
specified circumstances that constitute constructive termination, the executive will continue to
receive his base salary for the remaining unexpired term of the agreement plus an additional 12
months. In addition, the executive will receive continued coverage under our medical, dental and
life insurance programs for 36&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under each of the employment agreements, if, in connection with or following a change in
control (as described in the agreements), we terminate the executive without cause or if the
executive terminates employment voluntarily under certain circumstances specified in the agreement,
he will receive a severance payment equal to three times his average annual taxable compensation
for the five preceding taxable years. In addition, the executive will receive continued coverage
under our medical, dental and life insurance programs for 36&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;280G of the Internal Revenue Code provides that severance payments that equal or
exceed three times the individual&#146;s base amount are deemed to be &#147;excess parachute payments&#148; if
they are contingent upon a change in control. Individuals receiving excess parachute payments are
subject to a 20% excise tax on the amount of the payment in excess of the base amount, and we would
not be entitled to deduct such amount. The agreements will provide for the reduction, at the
election of the executives, of change in control payments to the executives to the extent necessary
to ensure that they will not receive &#147;excess parachute payments,&#148; which otherwise would result
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->78<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in the imposition of an excise tax. If an executive does not elect to reduce the payments, the
executive may be subject to the excise tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon termination of employment (other than termination in connection with a change in
control), each executive will be required to adhere to a one-year non-competition provision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will agree to pay all reasonable costs and legal fees of the executives in relation to the
enforcement of the employment agreements, provided the executives succeed on the merits in a legal
judgment, arbitration proceeding or settlement. The employment agreements also provide for
indemnification of the executives to the fullest extent legally permissible.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Employee Severance Compensation Plan. </I></B>In connection with the conversion, we expect to adopt
the Athens Federal Community Bank Employee Severance Compensation Plan. The plan will provide
severance benefits to eligible employees who terminate employment in connection with a change in
control. Employees will be eligible for severance benefits under the plan if they complete a
minimum of one year of service and do not enter into a separate employment or change in control
agreement with Athens Federal Community Bank or an affiliate, including Athens Bancshares
Corporation. Under the severance plan, if, within twelve months after a change in control, an
employee&#146;s employment involuntarily terminates, or if the employee voluntarily terminates
employment without being offered continued employment in a comparable position, the terminated
employee will receive a severance payment equal to two weeks of base compensation for each year of
service, up to a maximum of twenty-six months of base compensation. Based solely on compensation
levels and years of service at June&nbsp;30, 2009, and assuming that a change in control occurred on
June&nbsp;30, 2009, and all eligible employees became entitled to severance payments, the aggregate
payments due under the severance plan would equal approximately $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Benefit Plans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Profit Sharing/</I></B><B><I>401(k)</I></B><B><I> Plan. </I></B>We maintain the Athens Federal Community Bank 401(k) Plan, a
tax-qualified defined contribution plan, for all employees of Athens Federal Community Bank who
satisfy the plan&#146;s eligibility requirements. Participants become eligible to participate in the
plan on the first day of the month that coincides with or next follows their date of employment.
Eligible employees may contribute up to 75% of their compensation to the plan on a pre-tax basis,
subject to limitations imposed by the Internal Revenue Code. For 2009, the salary deferral
contribution limit is $16,500; provided, however, that participants over age 50 may contribute an
additional $5,500 to the plan. Participants are always 100% vested in their salary deferral
contributions. In addition to salary deferral contributions, the plan provides that we will make a
safe harbor matching contribution equal to 100% of the participant&#146;s deferrals, up to 6% of the
participant&#146;s compensation. In addition, we currently make monthly basic contributions equal to 3%
of each participant&#146;s compensation. Participants are 100% vested in employer matching
contributions under the plan. Participants become vested in other employer contributions at the
rate of 33.3% per year beginning after two years of service. The plan allows participants to take
loans and other in service distributions in accordance with certain requirements set forth in the
plan. Participants have individual accounts under the plan and may direct the investment of their
accounts among a variety of investment funds. In connection with the offering, the plan has added
another investment alternative, the Athens Bancshares Corporation Stock Fund (the &#147;Stock Fund&#148;),
which will permit participants to invest their 401(k) plan funds in Athens Bancshares Corporation
common stock. A participant who elects to purchase common stock in the offering through the plan
will receive the same subscription priority, and be subject to the same individual purchase
limitations, as if the participant had elected to purchase the common stock using funds outside the
plan. See <I>&#147;The Conversion and Stock Offering&#151;Subscription Offering and Subscription Rights&#148; </I>and
<I>&#147;&#151;Limitations on the Purchase of Shares.&#148; </I>The Stock Fund trustee will purchase common stock in
the offering on behalf of plan participants, to the extent that shares are available. Participants
will direct the trustee regarding the voting of shares purchased for their plan accounts through
the Stock Fund. <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> will serve as custodian of the shares held in the Stock Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Employee Stock Ownership Plan. </I></B>In connection with the conversion, Athens Federal Community
Bank has adopted an employee stock ownership plan for eligible employees. Eligible employees will
participate in the employee stock ownership plan as of the first plan entry date (January 1st or
July 1st) following or coincident with their date of employment.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->79<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have engaged a third party trustee (<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) to purchase in the offering, on
behalf of the employee stock ownership plan, 8% of the sum of the number of shares of Athens
Bancshares Corporation common stock sold in the conversion and contributed to the charitable
foundation (<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares
at the minimum, midpoint and maximum of the
offering range, respectively). The employee stock ownership plan intends to fund its stock
purchase through a loan from Athens Bancshares Corporation equal to 100% of the aggregate purchase
price of the common stock. The loan will be repaid principally through Athens Federal Community
Bank&#146;s contributions to the employee stock ownership plan and dividends payable on common stock
held by the plan over an expected 15-year term of the loan. We anticipate that the fixed interest
rate for the employee stock ownership plan loan will be the prime rate, as published in the Wall
Street Journal, on the closing date of the offering. See <I>&#147;Pro Forma Data.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee will hold the shares purchased in a loan suspense account, and will release the
shares from the suspense account on a pro rata basis as Athens Federal Community Bank repays the
loan. The trustee will allocate the shares released among active participants on the basis of each
active participant&#146;s proportional share of compensation. Participants will vest in their employee
stock ownership plan allocations at the rate of 33.3% per year beginning after two years of
service. Participants will be credited with past service for vesting purposes under the employee
stock ownership plan. Participants will become fully vested upon age 65, death or disability, a
change in control, or termination of the plan. Generally, participants will receive distributions
from the employee stock ownership plan upon separation from service. The plan reallocates any
unvested shares of common stock forfeited upon termination of employment among the remaining
participants in the plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participants may direct the plan trustee how to vote the shares of common stock credited to
their accounts. The plan trustee will vote all unallocated shares and allocated shares for which
participants do not provide instructions on any matter in the same ratio as it votes those shares
for which participants provide instructions, subject to fulfillment of its fiduciary
responsibilities as trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under applicable accounting requirements, Athens Federal Community Bank will record a
compensation expense for a leveraged employee stock ownership plan at the fair market value of the
shares when they are committed to be released from the suspense account to participants&#146; accounts
under the plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Life Insurance Benefits. </I></B>We have entered into group carve out plans with Messrs.&nbsp;Cunningham
and Hutsell pursuant to which the proceeds of certain insurance policies are divided upon the death
of the executives. Under the plans, if Messrs.&nbsp;Cunningham or Hutsell dies prior to termination of
employment, his beneficiary will receive a benefit equal to three times the executive&#146;s annual
salary less $50,000, up to a maximum benefit of $450,000. The executives&#146; participation in the
plans terminates at the time the executive terminates employment (other than on account of death or
following a change in control).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Nonqualified Deferred Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Current Supplemental Executive Retirement Plan. </I></B>In 2006, we entered into a separate
supplemental executive retirement agreement with Mr.&nbsp;Cunningham. Under the agreement, we will
provide Mr.&nbsp;Cunningham with an annual benefit (payable in monthly installments) of $160,000 for 20
years, if Mr.&nbsp;Cunningham separates from service with Athens Federal Community Bank after attaining
age 58. If we terminate Mr.&nbsp;Cunningham&#146;s service prior to age 58 for reasons other than cause or
disability, Mr.&nbsp;Cunningham will receive a reduced annual benefit (based on the amount we have
accrued toward the normal retirement benefit) for 20&nbsp;years, payable commencing at the time Mr.
Cunningham turns age 58. If Mr.&nbsp;Cunningham voluntarily terminates his service with us prior to age
58, he will receive the vested portion of the account value (determined based on the amount we have
accrued toward the normal retirement benefit) for 20&nbsp;years, payable commencing at the time Mr.
Cunningham turns age 58. Under the plan, Mr.&nbsp;Cunningham currently vests at the rate of 8.93% per
year and will be 37.50% vested as of December&nbsp;31, 2009. If Mr.&nbsp;Cunningham separates from service
with us prior to attaining age 58 as a result of having become disabled, he will receive an annual
benefit equal to 100% of the account value for 20&nbsp;years, commencing at the time he separates from
service. If Mr.&nbsp;Cunningham dies while in active service with Athens Federal Community Bank, his
beneficiary will receive the normal retirement benefit that otherwise would have been paid to him
for 20&nbsp;years. If Mr.&nbsp;Cunningham dies after separating from service with us, his beneficiary will
receive or continue to receive the benefit to which Mr.&nbsp;Cunningham was otherwise entitled. In
connection with the conversion, we anticipate amending and restating the supplemental retirement
agreement and adding a change in
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->80<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">control provision under which Mr.&nbsp;Cunningham would be entitled to the normal retirement benefit if
he separates from service for any reason, other than for cause, following a change in control. The
change in control benefit would be payable at the later of his separation from service or his
normal retirement age (age 58) under the agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Proposed Excess Benefit Supplemental Executive Retirement Plan. </I></B>Following the conversion, we
intend to implement a supplemental executive retirement plan to provide for supplemental retirement
benefits with respect to the employee stock ownership plan and 401(k) plan. The plan will provide
participating executives with benefits otherwise limited by other provisions of the Internal
Revenue Code or the terms of the employee stock ownership plan loan. Specifically, the plan will
provide benefits to eligible individuals (those designated by our board of directors) that cannot
be provided under the employee stock ownership plan or 401(k) plan as a result of the limitations
imposed by the Internal Revenue Code, but that would have been provided under those plans but for
such limitations. In addition to providing for benefits lost under tax-qualified plans as a result
of limitations imposed by the Internal Revenue Code, the new plan will also provide supplemental
benefits to designated individuals upon a change of control before the complete scheduled repayment
of the employee stock ownership plan loan. Generally, upon a change in control, the supplemental
executive retirement plan will provide the participant with a benefit equal to the benefit the
individual would have received under the employee stock ownership plan had he remained employed
throughout the term of the employee stock ownership plan loan less the benefits actually provided
under the employee stock ownership on behalf of the participant. An individual&#146;s benefit under the
supplemental executive retirement plan will generally become payable upon a separation from
service. Athens Federal Community Bank expects that Messrs.&nbsp;Hutsell and Leggett will participate
in the plan. The board of directors may also designate other officers as participants in future
years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Future Equity Incentive Plan. </I></B>Following the conversion, Athens Bancshares Corporation plans
to adopt an equity incentive plan that will provide for grants of stock options and restricted
stock. In accordance with applicable regulations, Athens Bancshares Corporation anticipates that
the plan, if adopted within the first year after the offering, will authorize a number of stock
options equal to 10% of the sum of the shares sold in the conversion stock offering and contributed
to the charitable foundation, and a number of shares of restricted stock equal to 4% of the sum of
the shares sold in the offering and contributed to the charitable foundation. Therefore, the
number of shares reserved under the plan, if adopted within that one-year period, will range from
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares, assuming
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares are sold in the offering and contributed to the
charitable foundation, to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares, assuming
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares are sold in the offering and
contributed to the charitable foundation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Director Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides the compensation received by individuals who served as
non-employee directors of Athens Federal Community Bank during the 2008 fiscal year.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fees Earned or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Paid in Cash</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;James L. Carter, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Elaine M. Cathcart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">G. Scott Hannah</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">G. Timothy Howard</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">M. Darrell Murray</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,900</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lyn B. Thompson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Larry D. Wallace</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->81<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Cash Retainer and Meeting Fees For Non-Employee Directors. </I></B>The following table sets forth the
applicable retainers and fees that will be paid to our directors for their service on the board of
directors of Athens Federal Community Bank as of September&nbsp;1, 2009 and for their service on the
board of directors of Athens Bancshares Corporation following the completion of the conversion.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Board of Directors of Athens Federal Community Bank:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Monthly Retainer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional Monthly Retainer for Chairman of the Board</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional Monthly Retainer for Audit Committee
Chairperson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional Monthly Retainer for Compensation Committee
Chairperson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Board of Directors of Athens Bancshares Corporation:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Monthly Retainer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">400</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Director&#146;s Deferred Compensation Agreement. </I></B>Athens Federal Community Bank has entered into a
director&#146;s deferred compensation agreement with James L. Carter, Jr. Under the terms of the
agreement, Dr.&nbsp;Carter may defer the receipt of meeting and other board fees until the date he
retires from the board of directors. Pursuant to the agreement, within 90&nbsp;days after his
retirement as a director, Dr.&nbsp;Carter may elect to receive any deferred compensation, together with
accumulated interest thereon, in either a single lump sum or in equal monthly installments
distributable over a period of 60 to 180&nbsp;months. In the event that Dr.&nbsp;Carter elects to receive
his deferred compensation amounts in monthly installments, Athens Federal Community Bank will
credit the monthly payments with an interest rate equal to the highest rate allowed to be credited
on savings or certificate accounts as of December&nbsp;31 of the succeeding calendar year after Dr.
Carter&#146;s election. Furthermore, in the event that Dr.&nbsp;Carter experiences financial hardship, as
such term is defined in the agreement, he may apply to Athens Federal Community Bank for the
distribution of all or any part of his deferred compensation account. If Dr.&nbsp;Carter dies prior to
the commencement of benefit payments under the agreement, the agreement provides that benefits will
be payable to Dr.&nbsp;Carter&#146;s beneficiary, together with accumulated interest thereon, in either a
single lump sum or in equal monthly installments distributable over a period of 60 to 180&nbsp;months.
Dr.&nbsp;Carter does not currently defer fees under the agreement. At June&nbsp;30, 2009, the balance of Dr.
Carter&#146;s deferred compensation account totaled $379,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transactions with Athens Federal Community Bank</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loans and Extensions of Credit. </I></B>The Sarbanes-Oxley Act of 2002 generally prohibits loans by
Athens Bancshares Corporation to its executive officers and directors. However, the Sarbanes-Oxley
Act contains a specific exemption from such prohibition for loans by Athens Federal Community Bank
to its executive officers and directors in compliance with federal banking regulations. Federal
regulations require that all loans or extensions of credit to executive officers and directors of
insured institutions must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with other persons and must
not involve more than the normal risk of repayment or present other unfavorable features. Athens
Federal Community Bank is therefore prohibited from making any new loans or extensions of credit to
executive officers and directors at different rates or terms than those offered to the general
public. Notwithstanding this rule, federal regulations permit Athens Federal Community Bank to
make loans to executive officers and directors at reduced interest rates if the loan is made under
a benefit program generally available to all other employees and does not give preference to any
executive officer or director over any other employee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, loans made to a director or executive officer in an amount that, when aggregated
with the amount of all other loans to the person and his or her related interests, are in excess of
the greater of $25,000 or 5% of Athens Federal Community Bank&#146;s capital and surplus, up to a
maximum of $500,000, must be approved in advance by a majority of the disinterested members of the
board of directors. See <I>&#147;Regulation and Supervision &#151; Regulation of Federal Savings Associations
&#151; Transactions with Related Parties.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->82<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank currently maintains a preferred rate employee loan program that
is available to all employees of Athens Federal Community Bank and its subsidiaries and does not
give preference to any executive officer over any other employee. Non-employee directors of Athens
Federal Community Bank are not eligible to participate in the preferred rate employee loan program.
Pursuant to the terms of the program, consumer loan rates are generally based on Athens Federal
Community Bank&#146;s most recent cost of funds, which is determined on a monthly basis by Athens
Federal Community Bank&#146;s Vice President, Chief Operating Officer and Chief Financial Officer. In
addition, under the terms of the program, real estate loans are generally offered at the prevailing
loan rate less 1.0%, with the exception of certain adjustable rate loans, which will generally
remain at the prevailing rate during the discounted or locked period and then be adjusted to 1.0%
less than the prevailing margin. With respect to real estate loans, origination fees are waived on
both in-house and secondary market loans and employee loan closing costs are equal to those fees
imposed upon third parties. Home equity lines of credit are also offered to employees at a rate
equal to the Wall Street Journal prime rate index minus 0.50%. The minimum and maximum rate for
employee home equity loans is 6.5% and 21.0%, respectively, and all annual fees are waived for
employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preferred rate employee loan program is made available to employees at the completion of
90&nbsp;days of employment and all loan funds must be used by employees for personal purposes only. In
addition, the program does not extend to members of an employee&#146;s family and loan benefits may not
be used to fund an employee&#146;s outside business activities. Reduced employee loan margins only
apply to employees who meet Athens Federal Community Bank&#146;s normal underwriting criteria and
employee loans made pursuant to the program are subject to credit approval and normal underwriting
standards. If an employee&#146;s employment with Athens Federal Community Bank is terminated, rates
made available under the preferred employee loan program will increase to the terms of the loan
contained in the initial disclosure. <B>At June&nbsp;30, 2009, none of our named executive officers had
any outstanding loans under the preferred rate employee loan program. </B>However, at that date, Ross
A. Millsaps, our Vice President and Chief Credit Officer, had an outstanding home equity line of
credit and an outstanding construction loan for construction of a new primary residence with a
total commitment of $525,000 under the preferred rate employee loan program. At June&nbsp;30, 2009, the
outstanding balances of Mr.&nbsp;Millsaps&#146; home equity line of credit and construction loan were $48,000
and $218,000, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate outstanding balance of loans extended by Athens Federal Community Bank to its
executive officers and directors and related parties was $906,000 at June&nbsp;30, 2009, or
approximately 2.1% of pro forma shareholders&#146; equity assuming that 2,185,000 shares are sold in the
offering and contributed to the charitable foundation at the maximum of the offering range. These
loans were performing according to their original terms at June&nbsp;30, 2009. In addition, these loans
were made in the ordinary course of business, on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable loans with persons not related
to Athens Federal Community Bank, and did not involve more than the normal risk of collectibility
or present other unfavorable features when made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Other Transactions. </I></B>Since January&nbsp;1, 2008, there have been no transactions and there are no
currently proposed transactions in which we were or are to be a participant and the amount involved
exceeds $120,000, and in which any of our executive officers and directors had or will have a
direct or indirect material interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Indemnification for Directors and Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation&#146;s charter provides that Athens Bancshares Corporation shall
indemnify all officers, directors and employees of Athens Bancshares Corporation to the fullest
extent permitted under Tennessee law against all expenses and liabilities reasonably incurred by
them in connection with or arising out of any action, suit or proceeding in which they may be
involved by reason of their having been a director or officer of Athens Bancshares Corporation.
Such indemnification may include the advancement of funds to pay for or reimburse reasonable
expenses incurred by an indemnified party to the fullest extent permitted under Tennessee law.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of Athens Bancshares Corporation pursuant
to its charter or otherwise, Athens Bancshares Corporation has been advised by counsel that, in the
opinion of the Securities and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->83<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="143"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Subscriptions by Executive Officers and Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents certain information as to the approximate purchases of common
stock by our directors and executive officers, including their associates, if any, as defined by
applicable regulations. No individual has entered into a binding agreement to purchase these
shares and, therefore, actual purchases could be more or less than indicated. Directors and
executive officers and their associates may not purchase more than 31% of the shares sold in the
offering. Like all of our depositors, our directors and officers have subscription rights based on
their deposits. For purposes of the following table, sufficient shares are assumed to be available
to satisfy subscriptions in all categories. All directors and officers as a group would own 18.2%
of our outstanding shares at the minimum of the offering range and 13.4% of our outstanding shares
at the maximum of the offering range. These percentages reflect the shares to be issued to the
charitable foundation.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Proposed Purchases of Stock in the Offering</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollar Amount</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Directors:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;James L. Carter, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Elaine M. Cathcart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey L. Cunningham</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">G. Scott Hannah</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">G. Timothy Howard</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">M. Darrell Murray</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">400,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lyn B. Thompson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Larry D. Wallace</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Executive Officers Who Are Not Directors:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael R. Hutsell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jay Leggett, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ross A. Millsaps</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>All directors and executive officers
as a group (11 persons)</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">293,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,937,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->84<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="144"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Regulation and Supervision</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank is subject to extensive regulation, examination and supervision
by the Office of Thrift Supervision, as its primary federal regulator, and the Federal Deposit
Insurance Corporation, as its deposits insurer. Athens Federal Community Bank is a member of the
Federal Home Loan Bank System and its deposit accounts are insured up to applicable limits by the
Deposit Insurance Fund managed by the Federal Deposit Insurance Corporation. Athens Federal
Community Bank must file reports with the Office of Thrift Supervision and the Federal Deposit
Insurance Corporation concerning its activities and financial condition in addition to obtaining
regulatory approvals before entering into certain transactions such as mergers with, or
acquisitions of, other financial institutions. There are periodic examinations by the Office of
Thrift Supervision and, under certain circumstances, the Federal Deposit Insurance Corporation to
evaluate Athens Federal Community Bank&#146;s safety and soundness and compliance with various
regulatory requirements. This regulatory structure is intended primarily for the protection of the
insurance fund and depositors. The regulatory structure also gives the regulatory authorities
extensive discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of assets and the
establishment of adequate loan loss reserves for regulatory purposes. Any change in such policies,
whether by the Office of Thrift Supervision, the Federal Deposit Insurance Corporation or Congress,
could have a material adverse impact on Athens Bancshares Corporation and Athens Federal Community
Bank and their operations. Athens Bancshares Corporation, as a savings and loan holding company,
is required to file certain reports with, is subject to examination by, and otherwise must comply
with the rules and regulations of the Office of Thrift Supervision. Athens Bancshares Corporation
will also be subject to the rules and regulations of the Securities and Exchange Commission under
the federal securities laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain of the regulatory requirements that are or will be applicable to Athens Federal
Community Bank and Athens Bancshares Corporation are described below. This description of statutes
and regulations is not intended to be a complete explanation of such statutes and regulations and
their effects on Athens Federal Community Bank and Athens Bancshares Corporation and is qualified
in its entirety by reference to the actual statutes and regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Regulation of Federal Savings Associations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Business Activities. </I></B>Federal law and regulations, primarily the Home Owners&#146; Loan Act and the
regulations of the Office of Thrift Supervision, govern the activities of federal savings banks,
such as Athens Federal Community Bank. These laws and regulations delineate the nature and extent
of the activities in which federal savings banks may engage. In particular, certain lending
authority for federal savings banks, e.g., commercial, non-residential real property loans and
consumer loans, is limited to a specified percentage of the institution&#146;s capital or assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Branching. </I></B>Federal savings banks are authorized to establish branch offices in any state or
states of the United States and its territories, subject to the approval of the Office of Thrift
Supervision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Capital Requirements. </I></B>The Office of Thrift Supervision&#146;s capital regulations require federal
savings institutions to meet three minimum capital standards: a 1.5% tangible capital to total
assets ratio, a 4% leverage ratio (3% for institutions receiving the highest rating on the CAMELS
examination rating system) and an 8% risk-based capital ratio. In addition, the prompt corrective
action standards discussed below establish, in effect, a minimum 2% tangible capital standard, a 4%
leverage ratio (3% for institutions receiving the highest rating on the CAMELS system) and,
together with the risk-based capital standard itself, a 4% Tier 1 risk-based capital standard. The
Office of Thrift Supervision regulations also require that, in meeting the tangible, leverage and
risk-based capital standards, institutions must generally deduct investments in and loans to
subsidiaries engaged in activities as principal that are not permissible for national banks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The risk-based capital standard requires federal savings institutions to maintain Tier 1
(core)&nbsp;and total capital (which is defined as core capital and supplementary capital) to
risk-weighted assets of at least 4% and 8%, respectively. In determining the amount of
risk-weighted assets, all assets, including certain off-balance sheet assets, recourse obligations,
residual interests and direct credit substitutes, are multiplied by a risk-weight factor of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->85<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">0% to 100%, assigned by the Office of Thrift Supervision capital regulation based on the risks
believed inherent in the type of asset. Core (Tier 1) capital is defined as common shareholders&#146;
equity (including retained earnings), certain noncumulative perpetual preferred stock and related
surplus and minority interests in equity accounts of consolidated subsidiaries, less intangibles
other than certain mortgage servicing rights and credit card relationships. The components of
supplementary capital currently include cumulative preferred stock, long-term perpetual preferred
stock, mandatory convertible securities, subordinated debt and intermediate preferred stock, the
allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and up to
45% of unrealized gains on available-for-sale equity securities with readily determinable fair
market values. Overall, the amount of supplementary capital included as part of total capital
cannot exceed 100% of core capital.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Office of Thrift Supervision also has authority to establish individual minimum capital
requirements in appropriate cases upon a determination that an institution&#146;s capital level is or
may become inadequate in light of the particular circumstances. At June&nbsp;30, 2009 and December&nbsp;31,
2008, Athens Federal Community Bank met each of these capital requirements. See note 10 of the
notes to consolidated financial statements included in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Prompt Corrective Regulatory Action. </I></B>The Office of Thrift Supervision is required to take
certain supervisory actions against undercapitalized institutions, the severity of which depends
upon the institution&#146;s degree of undercapitalization. Generally, a savings institution that has a
ratio of total capital to risk weighted assets of less than 8%, a ratio of Tier 1 (core)&nbsp;capital to
risk-weighted assets of less than 4% or a ratio of core capital to total assets of less than 4% (3%
or less for institutions with the highest examination rating) is considered to be
&#147;undercapitalized.&#148; A savings institution that has a total risk-based capital ratio of less than
6%, a Tier 1 capital ratio of less than 3% or a leverage ratio that is less than 3% is considered
to be &#147;significantly undercapitalized&#148; and a savings institution that has a tangible capital to
assets ratio equal to or less than 2% is deemed to be &#147;critically undercapitalized.&#148; Subject to a
narrow exception, the Office of Thrift Supervision is required to appoint a receiver or conservator
within specified time frames for an institution that is &#147;critically undercapitalized.&#148; An
institution must file a capital restoration plan with the Office of Thrift Supervision within 45
days of the date it receives notice that it is &#147;undercapitalized,&#148; &#147;significantly undercapitalized&#148;
or &#147;critically undercapitalized.&#148; Compliance with the plan must be guaranteed by any parent
holding company in the amount of the lesser of 5% of the association&#146;s total assets when it became
undercapitalized or the amount necessary to achieve full compliance at the time the association
first failed to comply. In addition, numerous mandatory supervisory actions become immediately
applicable to an undercapitalized institution, including, but not limited to, increased monitoring
by regulators and restrictions on growth, capital distributions and expansion. &#147;Significantly
undercapitalized&#148; and &#147;critically undercapitalized&#148; institutions are subject to more extensive
mandatory regulatory actions. The Office of Thrift Supervision could also take any one of a number
of discretionary supervisory actions, including the issuance of a capital directive and the
replacement of senior executive officers and directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loans to One Borrower. </I></B>Federal law provides that savings institutions are generally subject
to the limits on loans to one borrower applicable to national banks. Subject to certain
exceptions, a savings institution may not make a loan or extend credit to a single or related group
of borrowers in excess of 15% of its unimpaired capital and surplus. An additional amount may be
lent, equal to 10% of unimpaired capital and surplus, if secured by specified readily-marketable
collateral. See <I>&#147;Our Business &#151; Lending Activities &#151; Loans to One Borrower.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Standards for Safety and Soundness. </I></B>As required by statute, the federal banking agencies have
adopted Interagency Guidelines Establishing Standards for Safety and Soundness. The guidelines set
forth the safety and soundness standards that the federal banking agencies use to identify and
address problems at insured depository institutions before capital becomes impaired. If the Office
of Thrift Supervision determines that a savings institution fails to meet any standard prescribed
by the guidelines, the Office of Thrift Supervision may require the institution to submit an
acceptable plan to achieve compliance with the standard.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Limitation on Capital Distributions. </I></B>Office of Thrift Supervision regulations impose
limitations upon all capital distributions by a savings institution, including cash dividends,
payments to repurchase its shares and payments to shareholders of another institution in a cash-out
merger. Under the regulations, an application to and the prior approval of the Office of Thrift
Supervision is required before any capital distribution if the institution does not meet the
criteria for &#147;expedited treatment&#148; of applications under Office of Thrift Supervision regulations
(i.e., generally, examination and Community Reinvestment Act ratings in the two top categories),
the total capital distributions for the calendar year exceed net income for that year plus the
amount of retained net income for the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->86<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">preceding two years, the institution would be undercapitalized following the distribution or the
distribution would otherwise be contrary to a statute, regulation or agreement with the Office of
Thrift Supervision. If an application is not required, the institution must still provide prior
notice to the Office of Thrift Supervision of the capital distribution if, like Athens Federal
Community Bank, it is a subsidiary of a holding company. If Athens Federal Community Bank&#146;s capital
were ever to fall below its regulatory requirements or the Office of Thrift Supervision notified it
that it was in need of increased supervision, its ability to make capital distributions could be
restricted. In addition, the Office of Thrift Supervision could prohibit a proposed capital
distribution that would otherwise be permitted by the regulation, if the agency determines that
such distribution would constitute an unsafe or unsound practice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Qualified Thrift Lender Test. </I></B>Federal law requires savings institutions to meet a qualified
thrift lender test. Under the test, a savings association is required to either qualify as a
&#147;domestic building and loan association&#148; under the Internal Revenue Code or maintain at least 65%
of its &#147;portfolio assets&#148; (total assets less: (i)&nbsp;specified liquid assets up to 20% of total
assets; (ii)&nbsp;intangibles, including goodwill; and (iii)&nbsp;the value of property used to conduct
business) in certain &#147;qualified thrift investments&#148; (primarily residential mortgages and related
investments, including certain mortgage-backed securities) in at least 9&nbsp;months out of each
12-month period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A savings institution that fails the qualified thrift lender test is subject to certain
operating restrictions and may be required to convert to a bank charter. Recent legislation has
expanded the extent to which education loans, credit card loans and small business loans may be
considered &#147;qualified thrift investments.&#148; As of June&nbsp;30, 2009, Athens Federal Community Bank
maintained 87.1% of its portfolio assets in qualified thrift investments and, therefore, met the
qualified thrift lender test.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Transactions with Related Parties. </I></B>Athens Federal Community Bank&#146;s authority to engage in
transactions with &#147;affiliates&#148; is limited by Office of Thrift Supervision regulations and Sections
23A and 23B of the Federal Reserve Act as implemented by the Federal Reserve Board&#146;s Regulation&nbsp;W.
The term &#147;affiliates&#148; for these purposes generally means any company that controls or is under
common control with an institution. Athens Bancshares Corporation and any non-savings institution
subsidiaries would be affiliates of Athens Federal Community Bank. In general, transactions with
affiliates must be on terms that are as favorable to the institution as comparable transactions
with non-affiliates. In addition, certain types of transactions are restricted to 10% of an
institution&#146;s capital and surplus with any one affiliate and 20% of capital and surplus with all
affiliates. Collateral in specified amounts must usually be provided by affiliates in order to
receive loans from an institution. In addition, savings institutions are prohibited from lending to
any affiliate that is engaged in activities that are not permissible for bank holding companies and
no savings institution may purchase the securities of any affiliate other than a subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sarbanes-Oxley Act of 2002 generally prohibits a company from making loans to its
executive officers and directors. However, that act contains a specific exception for loans by a
depository institution to its executive officers and directors in compliance with federal banking
laws. Under such laws, Athens Federal Community Bank&#146;s authority to extend credit to executive
officers, directors and 10% shareholders (&#147;insiders&#148;), as well as entities such persons control, is
limited. The law restricts both the individual and aggregate amount of loans Athens Federal
Community Bank may make to insiders based, in part, on Athens Federal Community Bank&#146;s capital
position and requires certain board approval procedures to be followed. Such loans must be made on
terms substantially the same as those offered to unaffiliated individuals and not involve more than
the normal risk of repayment. There is an exception for loans made pursuant to a benefit or
compensation program that is widely available to all employees of the institution and does not give
preference to insiders over other employees. There are additional restrictions applicable to loans
to executive officers. For information about transactions with our directors and officers, see <I>&#147;Our
Management &#151;Transactions with Athens Federal Community Bank.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Enforcement. </I></B>The Office of Thrift Supervision has primary enforcement responsibility over
federal savings institutions and has the authority to bring actions against the institution and all
institution-affiliated parties, including shareholders, and any attorneys, appraisers and
accountants who knowingly or recklessly participate in wrongful action likely to have an adverse
effect on an insured institution. Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers and/or directors to institution
of receivership, or conservatorship. Civil penalties cover a wide range of violations and can
amount to $25,000 per day, or even $1&nbsp;million per day in especially egregious cases. The Federal
Deposit Insurance Corporation has
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->87<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">authority to recommend to the Director of the Office of Thrift Supervision that enforcement action
be taken with respect to a particular savings institution. If action is not taken by the Director,
the Federal Deposit Insurance Corporation has authority to take such action under certain
circumstances. Federal law also establishes criminal penalties for certain violations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Assessments. </I></B>Federal savings banks are required to pay assessments to the Office of Thrift
Supervision to fund its operations. The general assessments, paid on a semi-annual basis, are
based upon the savings institution&#146;s total assets, including consolidated subsidiaries, as reported
in the institution&#146;s latest quarterly thrift financial report, the institution&#146;s financial
condition and the complexity of its asset portfolio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Insurance of Deposit Accounts. </I></B>Athens Federal Community Bank&#146;s deposits are insured up to
applicable limits by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation.
Under the Federal Deposit Insurance Corporation&#146;s risk-based assessment system, insured
institutions are assigned to one of four risk categories based on supervisory evaluations,
regulatory capital levels and certain other factors with less risky institutions paying lower
assessments. No institution may pay a dividend if in default of the federal deposit insurance
assessment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2008, assessments ranged from five to forty-three basis points of assessable deposits.
Due to losses incurred by the Deposit Insurance Fund in 2008 from failed institutions, and
anticipated future losses, the Federal Deposit Insurance Corporation, pursuant to a Restoration
Plan to replenish the fund, adopted an across the board seven basis point increase in the
assessment range for the first quarter of 2009. The Federal Deposit Insurance Corporation adopted
further refinements to its risk-based assessment that were effective April&nbsp;1, 2009 and effectively
make the range seven to 77<SUP style="font-size: 85%; vertical-align: text-top">1/2</SUP> basis points. The Federal Deposit Insurance Corporation
may adjust the assessment scale uniformly from one quarter to the next, except that no adjustment
can deviate more than three basis points from the base scale without notice and comment rulemaking.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Deposit Insurance Corporation has imposed on all insured institutions a special
emergency assessment of 5 basis points of total assets less Tier 1 capital as of June&nbsp;30, 2009
(subject to a cap of 10 basis points of each institution&#146;s deposit assessment base on the same
date) in order to cover losses to the Deposit Insurance Fund. The special assessment is payable on
September&nbsp;30, 2009. The Federal Deposit Insurance Corporation has also provided for the
possibility of two additional special assessments for the final two quarters of 2009 if deemed
necessary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the recent difficult economic conditions, deposit insurance per account owner has been
raised to $250,000 for all types of accounts until January&nbsp;1, 2014. In addition, the Federal
Deposit Insurance Corporation adopted an optional Temporary Liquidity Guarantee Program by which,
for a fee, noninterest-bearing transaction accounts would receive unlimited insurance coverage
until December&nbsp;31, 2009 and certain senior unsecured debt issued by institutions and their holding
companies would temporarily be guaranteed by the Federal Deposit Insurance Corporation. Athens
Federal Community Bank made the business decision to participate in the unlimited
noninterest-bearing transaction account coverage and also opted to participate in the unsecured
debt guarantee program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Deposit Insurance Corporation may pay dividends to insured institutions once the
Deposit Insurance Fund reserve ratio equals or exceeds 1.35% of estimated insured deposits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the assessment for deposit insurance, institutions are required to make
payments on bonds issued in the late 1980s by the Financing Corporation to recapitalize a
predecessor deposit insurance fund. This payment is established quarterly and during the four
quarters ended June&nbsp;30, 2009 averaged 1.10 basis points of assessable deposits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Deposit Insurance Corporation has authority to increase insurance assessments. A
significant increase in insurance premiums would likely have an adverse effect on the operating
expenses and results of operations of Athens Federal Community Bank. Management cannot predict
what insurance assessment rates will be in the future.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->88<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insurance of deposits may be terminated by the Federal Deposit Insurance Corporation upon a
finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound
condition to continue operations or has violated any applicable law, regulation, rule, order or
condition imposed by the Federal Deposit Insurance Corporation. The management of the Bank does
not know of any practice, condition or violation that might lead to termination of deposit
insurance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Federal Home Loan Bank System. </I></B>Athens Federal Community Bank is a member of the Federal Home
Loan Bank System, which consists of (12)&nbsp;regional Federal Home Loan Banks. The Federal Home Loan
Bank provides a central credit facility primarily for member institutions. Athens Federal
Community Bank, as a member of the Federal Home Loan Bank of Cincinnati, is required to acquire and
hold shares of capital stock in that Federal Home Loan Bank. At June&nbsp;30, 2009, Athens Federal
Community Bank complied with this requirement with an investment in Federal Home Loan Bank stock of
$2.9&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Home Loan Banks are required to provide funds for the resolution of insolvent
thrifts in the late 1980s and to contribute funds for affordable housing programs. These
requirements, or general results of operations, could reduce or eliminate the dividends that the
Federal Home Loan Banks pay to their members and result in the Federal Home Loan Banks imposing a
higher rate of interest on advances to their members. If dividends were reduced, or interest on
future Federal Home Loan Bank advances increased, our net interest income would likely also be
reduced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Community Reinvestment Act. </I></B>Under the Community Reinvestment Act, as implemented by Office of
Thrift Supervision regulations, a savings association has a continuing and affirmative obligation
consistent with its safe and sound operation to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The Community Reinvestment Act does not establish
specific lending requirements or programs for financial institutions nor does it limit an
institution&#146;s discretion to develop the types of products and services that it believes are best
suited to its particular community, consistent with the Community Reinvestment Act. The Community
Reinvestment Act requires the Office of Thrift Supervision, in connection with its examination of a
savings association, to assess the institution&#146;s record of meeting the credit needs of its
community and to take such record into account in its evaluation of certain applications by such
institution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Community Reinvestment Act requires public disclosure of an institution&#146;s rating and
requires the Office of Thrift Supervision to provide a written evaluation of an association&#146;s
Community Reinvestment Act performance utilizing a four-tiered descriptive rating system.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank received a &#147;satisfactory&#148; rating as a result of its most recent
Community Reinvestment Act assessment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Other Regulations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other charges collected or contracted for by Athens Federal Community Bank are
subject to state usury laws and federal laws concerning interest rates. Athens Federal Community
Bank&#146;s operations are also subject to federal laws applicable to credit transactions, such as the:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide
information to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs of the
community it serves;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed
or other prohibited factors in extending credit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fair Credit Reporting Act of 1978, governing the use and provision of information to
credit reporting agencies;
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->89<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fair Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Rules and regulations of the various federal agencies charged with the
responsibility of implementing such federal laws.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operations of Athens Federal Community Bank also are subject to the:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribes procedures for complying with administrative
subpoenas of financial records;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Electronic Funds Transfer Act and Regulation&nbsp;E promulgated thereunder, which governs
automatic deposits to and withdrawals from deposit accounts and customers&#146; rights and
liabilities arising from the use of automated teller machines and other electronic
banking services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Check Clearing for the 21st Century Act (also known as &#147;Check 21&#148;), which gives
&#147;substitute checks,&#148; such as digital check images and copies made from that image, the
same legal standing as the original paper check;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Title III of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (referred to as the &#147;USA
PATRIOT Act&#148;), which significantly expands the responsibilities of financial
institutions, including savings and loan associations, in preventing the use of the
U.S. financial system to fund terrorist activities. Among other provisions, it
requires financial institutions operating in the United States to develop new
anti-money laundering compliance programs, due diligence policies and controls to
ensure the detection and reporting of money laundering. Such required compliance
programs are intended to supplement existing compliance requirements, also applicable
to financial institutions, under the Bank Secrecy Act and the Office of Foreign Assets
Control Regulations; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Gramm-Leach-Bliley Act places limitations on the sharing of consumer financial
information with unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act
requires all financial institutions offering financial products or services to retail
customers to provide such customers with the financial institution&#146;s privacy policy and
provide such customers the opportunity to &#147;opt out&#148; of the sharing of personal
financial information with unaffiliated third parties.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Reserve System</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Reserve Board regulations require savings institutions to maintain non-interest
earning reserves against their transaction accounts (primarily Negotiable Order of Withdrawal
(&#147;NOW&#148;) and regular checking accounts). The regulations generally provide that reserves be
maintained against aggregate transaction accounts as follows: a 3% reserve ratio is assessed on net
transaction accounts up to and including $44.3&nbsp;million; a 10% reserve ratio is applied above $44.3
million. The first $10.3&nbsp;million of otherwise reservable balances (subject to adjustments by the
Federal Reserve Board) are exempted from the reserve requirements. The amounts are adjusted
annually. Athens Federal Community Bank complies with the foregoing requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Holding Company Regulation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>General. </I></B>Athens Bancshares Corporation will be a unitary savings and loan holding company
within the meaning of federal law. The Gramm-Leach-Bliley Act of 1999 provided that no company may
acquire control of a savings institution after May&nbsp;4, 1999 unless it engages only in the financial
activities permitted for financial holding companies under the law or for multiple savings and loan
holding companies as described below. Further, the Gramm-Leach-Bliley Act specifies that existing
savings and loan holding companies may only engage in such activities. Upon any non-supervisory
acquisition by Athens Bancshares Corporation of another savings institution or savings bank that
meets the qualified thrift lender test and is deemed to be a savings institution by the Office of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->90<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Thrift Supervision, Athens Bancshares Corporation would become a multiple savings and loan holding
company (if the acquired institution is held as a separate subsidiary) and would generally be
limited to activities permissible for bank holding companies under Section&nbsp;4(c)(8) of the Bank
Holding Company Act, subject to the prior approval of the Office of Thrift Supervision, and certain
activities authorized by Office of Thrift Supervision regulation. However, the Office of Thrift
Supervision has issued an interpretation concluding that multiple savings and loan holding
companies may also engage in activities permitted for financial holding companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A savings and loan holding company is prohibited from, directly or indirectly, acquiring more
than 5% of the voting stock of another savings institution or savings and loan holding company,
without prior written approval of the Office of Thrift Supervision, and from acquiring or retaining
control of a depository institution that is not insured by the Federal Deposit Insurance
Corporation. In evaluating applications by holding companies to acquire savings institutions, the
Office of Thrift Supervision considers the financial and managerial resources and future prospects
of the company and institution involved, the effect of the acquisition on the risk to the deposit
insurance funds, the convenience and needs of the community and competitive factors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Office of Thrift Supervision may not approve any acquisition that would result in a
multiple savings and loan holding company controlling savings institutions in more than one state,
subject to two exceptions: (i)&nbsp;the approval of interstate supervisory acquisitions by savings and
loan holding companies; and (ii)&nbsp;the acquisition of a savings institution in another state if the
laws of the state target savings institution specifically permit such acquisitions. The states
vary in the extent to which they permit interstate savings and loan holding company acquisitions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although savings and loan holding companies are not currently subject to specific capital
requirements or specific restrictions on the payment of dividends or other capital distributions,
federal regulations do prescribe such restrictions on subsidiary savings institutions as described
below. Athens Federal Community Bank must notify the Office of Thrift Supervision 30&nbsp;days before
declaring any dividend to Athens Bancshares Corporation. In addition, the financial impact of a
holding company on its subsidiary institution is a matter that is evaluated by the Office of Thrift
Supervision and the agency has authority to order cessation of activities or divestiture of
subsidiaries deemed to pose a threat to the safety and soundness of the institution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Acquisition of Control. </I></B>Under the federal Change in Bank Control Act, a notice must be
submitted to the Office of Thrift Supervision if any person (including a company), or group acting
in concert, seeks to acquire &#147;control&#148; of a savings and loan holding company or savings
association. An acquisition of &#147;control&#148; can occur upon the acquisition of 10% or more of the
voting stock of a savings and loan holding company or savings institution or as otherwise defined
by the Office of Thrift Supervision. Under the Change in Bank Control Act, the Office of Thrift
Supervision has 60&nbsp;days from the filing of a complete notice to act, taking into consideration
certain factors, including the financial and managerial resources of the acquirer and the
anti-trust effects of the acquisition. Any company that so acquires control would then be subject
to regulation as a savings and loan holding company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Securities Laws</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation has filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933 for the registration of the common stock to
be issued in the offering. Upon completion of the offering, Athens Bancshares Corporation&#146;s common
stock will be registered with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended. Athens Bancshares Corporation will be subject to the information, proxy
solicitation, insider trading restrictions and other requirements under the Securities Exchange Act
of 1934, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registration, under the Securities Act of 1933, as amended, of the shares of common stock
to be issued in the offering does not cover the resale of those shares. Shares of common stock
purchased by persons who are not affiliates of Athens Bancshares Corporation may be resold without
registration. Shares purchased by an affiliate of Athens Bancshares Corporation will be subject to
the resale restrictions of Rule&nbsp;144 under the Securities Act of 1933, as amended. If Athens
Bancshares Corporation meets the current public information requirements of Rule&nbsp;144, each
affiliate of Athens Bancshares Corporation that complies with the other conditions of Rule&nbsp;144,
including those that require the affiliate&#146;s sale to be aggregated with those of other persons,
would be able to sell in the public market, without registration, a number of shares not to exceed,
in any three-month period, the greater of 1% of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->91<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">outstanding shares of Athens Bancshares Corporation or the average weekly volume of trading in the
shares during the preceding four calendar weeks. In the future, Athens Bancshares Corporation may
permit affiliates to have their shares registered for sale under the Securities Act of 1933, as
amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Sarbanes-Oxley Act of 2002</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sarbanes-Oxley Act of 2002 addresses, among other issues, corporate governance, auditing
and accounting, executive compensation, and enhanced and timely disclosure of corporate
information. As directed by the Sarbanes-Oxley Act of 2002, Athens Bancshares Corporation&#146;s Chief
Executive Officer and Chief Financial Officer each will be required to certify that Athens
Bancshares Corporation&#146;s quarterly and annual reports do not contain any untrue statement of a
material fact. The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley
Act of 2002 have several requirements, including having these officers certify that: they are
responsible for establishing, maintaining and regularly evaluating the effectiveness of our
internal controls; they have made certain disclosures to our auditors and the audit committee of
the board of directors about our internal controls; and they have included information in our
quarterly and annual reports about their evaluation and whether there have been significant changes
in our internal controls or in other factors that could significantly affect internal controls.
Athens Bancshares Corporation will be subject to further reporting and audit requirements beginning
with the year ending December&nbsp;31, 2010 under the requirements of the Sarbanes-Oxley Act. Athens
Bancshares Corporation will prepare policies, procedures and systems designed to comply with these
regulations to ensure compliance with these regulations.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->92<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="145"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Federal and State Taxation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Income Taxation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>General. </I></B>We report our income on a fiscal year basis using the accrual method of accounting.
The federal income tax laws apply to us in the same manner as to other corporations with some
exceptions, including particularly our reserve for bad debts discussed below. The following
discussion of tax matters is intended only as a summary and does not purport to be a comprehensive
description of the tax rules applicable to us. Our federal income tax returns have not been
audited during the last five years. For its 2008 fiscal year, Athens Federal Community Bank&#146;s
maximum federal income tax rate was 34.0%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation and Athens Federal Community Bank will enter into a tax
allocation agreement. Because Athens Bancshares Corporation will own 100% of the issued and
outstanding capital stock of Athens Federal Community Bank after the completion of the conversion,
Athens Bancshares Corporation and Athens Federal Community Bank will be members of an affiliated
group within the meaning of Section 1504(a) of the Internal Revenue Code, of which group Athens
Bancshares Corporation will be the common parent corporation. As a result of this affiliation,
Athens Federal Community Bank may be included in the filing of a consolidated federal income tax
return with Athens Bancshares Corporation and, if a decision to file a consolidated tax return is
made, the parties agree to compensate each other for their individual share of the consolidated tax
liability and/or any tax benefits provided by them in the filing of the consolidated federal income
tax return.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Bad Debt Reserves. </I></B>For fiscal years beginning before June&nbsp;30, 1996, thrift institutions that
qualified under certain definitional tests and other conditions of the Internal Revenue Code were
permitted to use certain favorable provisions to calculate their deductions from taxable income for
annual additions to their bad debt reserve. A reserve could be established for bad debts on
qualifying real property loans, generally secured by interests in real property improved or to be
improved, under the percentage of taxable income method or the experience method. The reserve for
nonqualifying loans was computed using the experience method. Federal legislation enacted in 1996
repealed the reserve method of accounting for bad debts and the percentage of taxable income method
for tax years beginning after 1995 and require savings institutions to recapture or take into
income certain portions of their accumulated bad debt reserves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Distributions. </I></B>If Athens Federal Community Bank makes &#147;non-dividend distributions&#148; to Athens
Bancshares Corporation, the distributions will be considered to have been made from Athens Federal
Community Bank&#146;s unrecaptured tax bad debt reserves, including the balance of its reserves as of
December&nbsp;31, 1987, to the extent of the &#147;non-dividend distributions,&#148; and then from Athens Federal
Community Bank&#146;s supplemental reserve for losses on loans, to the extent of those reserves, and an
amount based on the amount distributed, but not more than the amount of those reserves, will be
included in Athens Federal Community Bank&#146;s taxable income. Non-dividend distributions include
distributions in excess of Athens Federal Community Bank&#146;s current and accumulated earnings and
profits, as calculated for federal income tax purposes, distributions in redemption of stock, and
distributions in partial or complete liquidation. Dividends paid out of Athens Federal Community
Bank&#146;s current or accumulated earnings and profits will not be so included in Athens Federal
Community Bank&#146;s taxable income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount of additional taxable income triggered by a non-dividend is an amount that, when
reduced by the tax attributable to the income, is equal to the amount of the distribution.
Therefore, if Athens Federal Community Bank makes a non-dividend distribution to Athens Bancshares
Corporation, approximately one and one-half times the amount of the distribution not in excess of
the amount of the reserves would be includable in income for federal income tax purposes, assuming
a 34.0% federal corporate income tax rate. Athens Federal Community Bank does not intend to pay
dividends that would result in a recapture of any portion of its bad debt reserves.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->93<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>State Taxation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Tennessee. </I></B>Tennessee imposes franchise and excise taxes. The franchise tax ($0.25 per $100)
is applied either to apportioned net income or the value of property owned and used in Tennessee,
whichever is greater, as of the close of the fiscal year. The excise tax (6.5%) is applied to net
earnings derived from business transacted in Tennessee. Under Tennessee regulations, bad debt
deductions are deductible from the excise tax. There have not been any audits of our state tax
returns during the past five years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any cash dividends, in excess of a certain exempt amount, that would be paid with respect to
Athens Bancshares Corporation common stock to a shareholder (including a partnership and certain
other entities) who is a resident of Tennessee will be subject to the Tennessee income tax (6%).
Any distribution by a corporation from earnings according to percentage ownership is considered a
dividend, and the definition of a dividend for Tennessee income tax purposes may not be the same as
the definition of a dividend for federal income tax purposes. A corporate distribution may be
treated as a dividend for Tennessee tax purposes if it is paid from funds that exceed the
corporation&#146;s earned surplus and profits under certain circumstances.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->94<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="146"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>The Conversion and Stock Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank&#146;s board of directors has approved the plan of conversion. The
Office of Thrift Supervision also has conditionally approved the plan of conversion, but its
approval does not constitute a recommendation or endorsement of the plan of conversion by the
agency.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;15, 2009, the board of directors of Athens Federal Community Bank unanimously adopted
the plan of conversion according to which Athens Federal Community Bank will convert from a
federally chartered mutual savings bank to a federally chartered stock savings bank and become a
wholly owned subsidiary of Athens Bancshares Corporation, a newly formed Tennessee corporation.
Athens Bancshares Corporation will offer 100% of its common stock to qualifying depositors of
Athens Federal Community Bank in a subscription offering and, if necessary, to members of the
general public through a community offering and/or a syndicate of registered broker-dealers. The
completion of the offering depends on market conditions and other factors beyond our control. We
can give no assurance as to the length of time that will be required to complete the sale of the
common stock. If we experience delays, significant changes may occur in the appraisal of Athens
Federal Community Bank, which would require a change in the offering range. A change in the
offering range would result in a change in the net proceeds realized by Athens Bancshares
Corporation from the sale of the common stock. If the offering is terminated, Athens Federal
Community Bank would be required to charge all offering expenses against current income. The
Office of Thrift Supervision approved our plan of conversion, subject to the fulfillment of certain
conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan of conversion and stock offering also provides for the establishment of the Athens
Federal Foundation and the funding of the foundation with 100,000 shares of Athens Bancshares
Corporation common stock and $100,000 in cash. The establishment of the Athens Federal Foundation
is subject to a separate vote of Athens Federal Community Bank&#146;s members. The special meeting of
Athens Federal Community Bank&#146;s members has been called for this purpose on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a brief summary of the pertinent aspects of the conversion. A copy of the
plan of conversion is available from Athens Federal Community Bank upon request and is available
for inspection at the offices of Athens Federal Community Bank and at the Office of Thrift
Supervision. The plan of conversion is also filed as an exhibit to the registration statement that
we have filed with the Securities and Exchange Commission. See <I>&#147;Where You Can Find More
Information.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Reasons for the Conversion</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary reasons for the conversion and related stock offering are to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase the capital of Athens Federal Community Bank to support future lending and
operational growth;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enhance profitability and earnings through reinvesting and leveraging the proceeds,
primarily through traditional funding and lending activities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>support future branching activities and/or the acquisition of financial services
companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>implement equity compensation plans to retain and attract qualified directors,
officers and staff to enhance the current incentive-based compensation program; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase our philanthropic endeavors to the communities we serve through the
formation and funding of the Athens Federal Foundation.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a stock holding company, Athens Bancshares Corporation will have greater flexibility than
Athens Federal Community Bank now has in structuring mergers and acquisitions, including the
consideration paid in a transaction. Our current mutual savings bank structure, by its nature,
limits our ability to offer any common stock as
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->95<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">consideration in a merger or acquisition. Our new stock holding company structure will enhance our
ability to compete with other bidders when acquisition opportunities arise by better enabling us to
offer stock or cash consideration, or a combination of the two. We currently do not have any
agreement or understanding as to any specific acquisition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Effects of Conversion to Stock Form</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>General. </I></B>Each depositor in a mutual savings bank has both a deposit account in the
institution and a pro rata ownership interest in the net worth of the institution based upon the
balance in his or her account. However, this ownership interest is tied to the depositor&#146;s account
and has no value separate from such deposit account. Furthermore, this ownership interest may only
be realized in the unlikely event that the institution is liquidated. In such event, the
depositors of record at that time, as owners, would be able to share in any residual surplus and
reserves after payment of other claims, including claims of depositors to the amounts of their
deposits. Any depositor who opens a deposit account obtains a pro rata ownership interest in the
net worth of the institution without any additional payment beyond the amount of the deposit. A
depositor who reduces or closes his or her account receives a portion or all of the balance in the
account but nothing for his or her ownership interest in the net worth of the institution, which is
lost to the extent that the balance in the account is reduced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When a mutual savings bank converts to stock form, depositors lose all rights to the net worth
of the mutual savings bank, except the right to claim a pro rata share of funds representing the
liquidation account established in connection with the conversion. Additionally, permanent
nonwithdrawable capital stock is created and offered to depositors which represents the ownership
of the institution&#146;s net worth. The common stock of Athens Bancshares Corporation is separate and
apart from deposit accounts and cannot be and is not insured by the Federal Deposit Insurance
Corporation or any other governmental agency. Certificates are issued to evidence ownership of the
permanent stock. The stock certificates are transferable, and therefore the stock may be sold or
traded if a purchaser is available with no effect on any deposit account the seller may hold in the
institution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No assets of Athens Bancshares Corporation will be distributed in connection with the
conversion other than the payment of those expenses incurred in connection with the conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Continuity. </I></B>While the conversion is being accomplished, the normal business of Athens Federal
Community Bank will continue without interruption, including being regulated by the Office of
Thrift Supervision and the Federal Deposit Insurance Corporation. After the conversion, Athens
Federal Community Bank will continue to provide services for depositors and borrowers under current
policies by its present management and staff.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The directors of Athens Federal Community Bank at the time of the conversion will serve as
directors of Athens Federal Community Bank after the conversion. The initial directors of Athens
Bancshares Corporation are composed of the individuals who serve on the board of directors of
Athens Federal Community Bank. All officers of Athens Federal Community Bank at the time of
conversion will retain their positions after the conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Deposit Accounts and Loans. </I></B>Athens Federal Community Bank&#146;s deposit accounts, account
balances and existing Federal Deposit Insurance Corporation insurance coverage of deposit accounts
will not be affected by the conversion. Furthermore, the conversion will not affect the loan
accounts, loan balances or obligations of borrowers under their individual contractual arrangements
with Athens Federal Community Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Effect on Voting Rights. </I></B>Voting rights in Athens Federal Community Bank, as a mutual savings
bank, belong to its depositor and borrower members. After the conversion, depositors will no
longer have voting rights in Athens Federal Community Bank and, therefore, will no longer be able
to elect directors of Athens Federal Community Bank or control its affairs. Instead, Athens
Bancshares Corporation, as the sole shareholder of Athens Federal Community Bank, will possess all
voting rights in Athens Federal Community Bank. The holders of the common stock of Athens
Bancshares Corporation will possess all voting rights in Athens Bancshares Corporation. Depositors
and borrowers of Athens Federal Community Bank will not have voting rights after the conversion
except to the extent that they become shareholders of Athens Bancshares Corporation by purchasing
common stock.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->96<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Liquidation Account. </I></B>In the unlikely event of a complete liquidation of Athens Federal
Community Bank before the conversion, each depositor in Athens Federal Community Bank would receive
a pro rata share of any assets of Athens Federal Community Bank remaining after payment of claims
of all creditors, including the claims of all depositors up to the withdrawal value of their
accounts. Each depositor would receive a pro rata share of the remaining assets in the same
proportion as the value of his or her deposit account to the total value of all deposit accounts in
Athens Federal Community Bank at the time of liquidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the conversion, holders of withdrawable deposits in Athens Federal Community Bank,
including certificates of deposit, will not be entitled to share in any residual assets upon
liquidation of Athens Federal Community Bank. However, under applicable regulations, Athens
Federal Community Bank will, at the time of the conversion, establish a liquidation account in an
amount equal to its total equity as of the date of the latest statement of financial condition
contained in the final prospectus relating to the conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank will maintain the liquidation account after the conversion for
the benefit of eligible account holders and supplemental eligible account holders who retain their
savings accounts in Athens Federal Community Bank. Each eligible account holder and supplemental
account holder will, with respect to each deposit account held, have a related inchoate interest in
a sub-account portion of the liquidation account balance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial sub-account balance for a savings account held by an eligible account holder or a
supplemental eligible account holder will be determined by multiplying the opening balance in the
liquidation account by a fraction of which the numerator is the amount of the holder&#146;s &#147;qualifying
deposit&#148; in the deposit account and the denominator is the total amount of the &#147;qualifying
deposits&#148; of all eligible or supplemental eligible account holders. The initial subaccount balance
will not be increased, but it will be decreased as provided below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the deposit balance in any deposit account of an eligible account holder or supplemental
eligible account holder at the close of business on any annual closing day of Athens Federal
Community Bank (which is December&nbsp;31) after March&nbsp;31, 2008 or September&nbsp;30, 2009, is less than the
lesser of the deposit balance in a deposit account at the close of business on any other annual
closing date after March&nbsp;31, 2008 or September&nbsp;30, 2009, or the amount of the &#147;qualifying deposit&#148;
in a savings account on March&nbsp;31, 2008 or September&nbsp;30, 2009, then the subaccount balance for a
savings account will be adjusted by reducing the subaccount balance in an amount proportionate to
the reduction in the savings balance. Once reduced, the subaccount balance will not be
subsequently increased, notwithstanding any increase in the savings balance of the related savings
account. If any savings account is closed, the related subaccount balance will be reduced to zero.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon a complete liquidation of Athens Federal Community Bank, each eligible account holder and
supplemental account holder will be entitled to receive a liquidation distribution from the
liquidation account in the amount of the then current adjusted subaccount balance(s) for deposit
account(s) held by the holder before any liquidation distribution may be made to shareholders. No
merger, consolidation, bulk purchase of assets with assumptions of savings accounts and other
liabilities or similar transactions with another federally insured institution in which Athens
Federal Community Bank is not the surviving institution will be considered to be a complete
liquidation. In any of these transactions, the liquidation account will be assumed by the
surviving institution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the unlikely event Athens Federal Community Bank is liquidated after the conversion,
depositors will be entitled to full payment of their deposit accounts before any payment is made to
Athens Bancshares Corporation as sole shareholder of Athens Federal Community Bank. There are no
plans to liquidate either Athens Federal Community Bank or Athens Bancshares Corporation in the
future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Material Income Tax Consequences</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the conversion, we have received an opinion of counsel with respect to
federal tax laws that no gain or loss will be recognized by account holders receiving subscription
rights, except to the extent, if any, that subscription rights are deemed to have fair market value
on the date such rights are issued. We believe that the tax opinion summarized below addresses all
material federal income tax consequences that are generally applicable to persons receiving
subscription rights.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->97<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kilpatrick Stockton LLP has issued an opinion to us that, for federal income tax purposes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the conversion of Athens Federal Community Bank from the mutual to the stock form of
organization will qualify as a reorganization within the meaning of Section
368(a)(1)(F) of the Internal Revenue Code, and no gain or loss will be recognized by
account holders and no gain or loss will be recognized by Athens Federal Community Bank
by reason of such conversion;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no gain or loss will be recognized by Athens Bancshares Corporation upon the sale of
shares of common stock in the offering;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it is more likely than not that the fair market value of the non-transferable
subscription rights to purchase shares of common stock of Athens Bancshares Corporation
to be issued to eligible account holders, supplemental eligible account holders and
other members is zero and, accordingly, that no income will be realized by eligible
account holders, supplemental eligible account holders and other members upon the
issuance to them of the subscription rights or upon the exercise of the subscription
rights; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it is more likely than not that the tax basis to the holders of shares of common
stock purchased in the stock offering pursuant to the exercise of the subscription
rights will be the amount paid therefor, and that the holding period for such shares of
common stock will begin on the date of completion of the stock offering.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The statements set forth in the first and second bullet points above are based on the position
that the subscription rights do not have any market value at the time of distribution or at the
time they are exercised. Whether subscription rights have a market value for federal income tax
purposes is a question of fact, depending upon all relevant facts and circumstances. According to
our counsel, the Internal Revenue Service will not issue rulings on whether subscription rights
have a market value. Counsel has also advised us that they are unaware of any instance in which
the Internal Revenue Service has taken the position that nontransferable subscription rights have a
market value. Counsel also noted that the subscription rights will be granted at no cost to the
recipients, will be nontransferable and of short duration, and will afford the recipients the right
only to purchase our common stock at a price equal to its estimated fair market value, which will
be the same price as the purchase price for the unsubscribed shares of common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unlike a private letter ruling issued by the Internal Revenue Service, an opinion of counsel
is not binding on the Internal Revenue Service and the Internal Revenue Service could disagree with
the conclusions reached in the opinion. If there is a disagreement, no assurance can be given that
the conclusions reached in an opinion of counsel would be sustained by a court if contested by the
Internal Revenue Service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank has also received an opinion from Hazlett, Lewis &#038; Bieter, PLLC,
that, assuming the conversion does not result in any federal income tax liability to Athens Federal
Community Bank, its account holders, or Athens Bancshares Corporation, implementation of the plan
of conversion will not result in any Tennessee income tax liability to those entities or persons.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The opinions of Kilpatrick Stockton LLP and of Hazlett, Lewis &#038; Bieter, PLLC are filed as
exhibits to the registration statement that we have filed with the Securities and Exchange
Commission. See <I>&#147;Where You Can Find More Information.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Subscription Offering and Subscription Rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the plan of conversion, we have granted rights to subscribe for Athens Bancshares
Corporation common stock to the following persons in the following order of priority:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persons with deposits in Athens Federal Community Bank with balances aggregating $50
or more (&#147;qualifying deposits&#148;) as of the close of business on March&nbsp;31, 2008
(&#147;eligible account holders&#148;). For this purpose, deposit accounts include all savings,
time and demand accounts.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->98<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our employee stock ownership plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persons with qualifying deposits in Athens Federal Community Bank as of the close of
business on September&nbsp;30, 2009 (&#147;supplemental eligible account holders&#148;) other than our
officers and directors and their associates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Depositors of Athens Federal Community Bank as of the close of business on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, who are neither eligible nor supplemental eligible account holders, and
borrowers of Athens Federal Community Bank as of May&nbsp;1, 1999 whose borrowings still
exist as of the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (collectively, &#147;other members&#148;).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount of common stock that any person may purchase will depend on the availability of the
common stock after satisfaction of all subscriptions having priority rights in the subscription
offering and to the maximum and minimum purchase limitations set forth in the plan of conversion.
See <I>&#147;&#151; Limitations on Purchases of Shares.&#148; </I>All persons on a joint account will be counted as a
single depositor for purposes of determining the maximum amount that may be subscribed for by
owners of a joint account.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will strive to identify your ownership in all accounts, but cannot guarantee we will
identify all accounts in which you have an ownership interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Category 1: Eligible Account Holders. </I></B>Subject to the purchase limitations as described below
under <I>&#147;&#151; Limitations on Purchases of Shares,&#148; </I>each eligible account holder has the right to
subscribe for up to the greater of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$300,000 of common stock (which equals 30,000 shares);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>one-tenth of 1% of the total offering of common stock; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>15 times the product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be sold by a fraction of which the
numerator is the amount of qualifying deposits of the eligible account holder and the
denominator is the total amount of qualifying deposits of all eligible account holders.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If there are insufficient shares to satisfy all subscriptions by eligible account holders,
shares first will be allocated so as to permit each subscribing eligible account holder, if
possible, to purchase a number of shares sufficient to make the person&#146;s total allocation equal 100
shares or the number of shares actually subscribed for, whichever is less. After that, unallocated
shares will be allocated among the remaining subscribing eligible account holders whose
subscriptions remain unfilled in the proportion that the amounts of their respective qualifying
deposits bear to the total qualifying deposits of all remaining eligible account holders whose
subscriptions remain unfilled. Unless waived by the Office of Thrift Supervision, subscription
rights of eligible account holders who are also executive officers or directors of Athens Federal
Community Bank or their associates will be subordinated to the subscription rights of other
eligible account holders to the extent attributable to increased deposits in Athens Federal
Community Bank in the one year period preceding March&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To ensure a proper allocation of stock, each eligible account holder must list on his or her
stock order form all deposit accounts in which such eligible account holder had an ownership
interest at March&nbsp;31, 2008. Failure to list an account, or providing incorrect information, could
result in the loss of all or part of a subscriber&#146;s stock allocation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Category 2: Tax-Qualified Employee Benefit Plans. </I></B>Our tax-qualified employee benefit plans
have the right to purchase up to 10% of the shares of common stock sold in the offering and
contributed to the charitable foundation. As a tax-qualified employee benefit plan, our employee
stock ownership plan intends to purchase a number of shares equal to 8% of the sum of the shares
sold in the offering and contributed to the charitable foundation. Subscriptions by the employee
stock ownership plan will not be aggregated with shares of common stock purchased by any other
participants in the offering, including subscriptions by our officers and directors, for
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->99<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the purpose of applying the purchase limitations in the plan of conversion. If eligible account
holders subscribe for all of the shares being sold, no shares will be available for our
tax-qualified employee benefit plans. However, if we increase the number of shares offered above
the maximum of the offering range, the employee stock ownership plan will have a first priority
right to purchase any shares exceeding that amount up to 10% of the sum of the common stock issued
in the offering and contributed to the charitable foundation. If the plan&#146;s subscription is not
filled in its entirety, the employee stock ownership plan may purchase shares in the open market or
may purchase shares directly from us with the approval of the Office of Thrift Supervision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Category 3: Supplemental Eligible Account Holders. </I></B>Subject to the purchase limitations as
described below under <I>&#147;&#151; Limitations on Purchases of Shares,&#148; </I>each supplemental eligible account
holder has the right to subscribe for up to the greater of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$300,000 of common stock (which equals 30,000 shares);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>one-tenth of 1% of the total offering of common stock; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>15 times the product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be sold by a fraction of which the
numerator is the amount of qualifying deposits of the supplemental eligible account
holder and the denominator is the total amount of qualifying deposits of all
supplemental eligible account holders.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If eligible account holders and the employee stock ownership plan subscribe for all of the
shares being sold, no shares will be available for supplemental eligible account holders. If
shares are available for supplemental eligible account holders but there are insufficient shares to
satisfy all subscriptions by supplemental eligible account holders, shares first will be allocated
so as to permit each subscribing supplemental eligible account holder, if possible, to purchase a
number of shares sufficient to make the person&#146;s total allocation equal 100 shares or the number of
shares actually subscribed for, whichever is less. After that, unallocated shares will be
allocated among the remaining subscribing supplemental eligible account holders whose subscriptions
remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to
the total qualifying deposits of all remaining supplemental eligible account holders whose
subscriptions remain unfilled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To ensure a proper allocation of stock, each supplemental eligible account holder must list on
his or her stock order form all deposit accounts in which such supplemental eligible account holder
had an ownership interest at September&nbsp;30, 2009. Failure to list an account, or providing
incorrect information, could result in the loss of all or part of a subscriber&#146;s stock allocation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Category 4: Other Members. </I></B>Subject to the purchase limitations as described below under
<I>&#147;</I>&#151;<I>Limitations on Purchases of Shares,&#148; </I>each other member has the right to purchase up to the
greater of $300,000 of common stock (which equals 30,000 shares) or one-tenth of 1% of the total
offering of common stock. If eligible account holders, the employee stock ownership plan and
supplemental eligible account holders subscribe for all of the shares being sold, no shares will be
available for other members. If shares are available for other members but there are not
sufficient shares to satisfy all subscriptions by other members, shares first will be allocated so
as to permit each subscribing other member, if possible, to purchase a number of shares sufficient
to make the person&#146;s total allocation equal 100 shares or the number of shares actually subscribed
for, whichever is less. After that, unallocated shares will be allocated among the remaining
subscribing other members in the proportion that each other member&#146;s subscription bears to the
total subscriptions of all such subscribing other members whose subscriptions remain unfilled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To ensure a proper allocation of stock, each other member must list on his or her stock order
form all deposit accounts in which such other member had an ownership interest at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
Failure to list an account or providing incorrect information could result in the loss of all or
part of a subscriber&#146;s stock allocation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Expiration Date for the Subscription Offering. </I></B>The subscription offering, and all
subscription rights under the plan of conversion, will terminate at
&#95;&#95;&#95;:&#95;&#95;&#95; p.m., Eastern time, on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. We will not accept orders for common stock in the subscription offering received
after that time. We will make reasonable attempts to provide a prospectus and related offering
materials to holders of subscription rights; however, all subscription rights
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->100<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">will expire on the expiration date whether or not we have been able to locate each person entitled
to subscription rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office of Thrift Supervision regulations require that we complete the sale of common stock
within 45&nbsp;days after the close of the subscription offering. If the sale of the common stock is
not completed within that period, all funds received will be returned promptly with interest at our
passbook rate and all withdrawal authorizations will be canceled unless we receive approval of the
Office of Thrift Supervision to extend the time for completing the offering. If regulatory
approval of an extension of the time period has been granted, we will notify all subscribers of the
extension and of the duration of any extension that has been granted, and subscribers will have the
right to modify or rescind their purchase orders. If we do not receive an affirmative response
from a subscriber to any resolicitation, the subscriber&#146;s order will be rescinded and all funds
received will be returned promptly with interest, or withdrawal authorizations will be canceled.
No single extension can exceed 90&nbsp;days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Persons in Non-Qualified States. </I></B>We will make reasonable efforts to comply with the
securities laws of all states in the United States in which persons entitled to subscribe for stock
under the plan of conversion reside. However, we are not required to offer stock in the
subscription offering to any person who resides in a foreign country or who resides in a state of
the United States in which (1)&nbsp;only a small number of persons otherwise eligible to subscribe for
shares of common stock reside; (2)&nbsp;the granting of subscription rights or the offer or sale of
shares to such person would require that we or our officers or directors register as a broker,
dealer, salesman or selling agent under the securities laws of the state, or register or otherwise
qualify the subscription rights or common stock for sale or qualify as a foreign corporation or
file a consent to service of process; or (3)&nbsp;we determine that compliance with that state&#146;s
securities laws would be impracticable for reasons of cost or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Restrictions on Transfer of Subscription Rights and Shares. </I></B>Subscription rights are
nontransferable. You may not transfer, or enter into any agreement or understanding to transfer,
the legal or beneficial ownership of your subscription rights issued under the plan of conversion
or the shares of common stock to be issued upon exercise of your subscription rights. Your
subscription rights may be exercised only by you and only for your own account. If you exercise
your subscription rights, you will be required to certify that you are purchasing shares solely for
your own account and that you have no agreement or understanding regarding the sale or transfer of
such shares. Federal regulations also prohibit any person from offering, or making an announcement
of an offer or intent to make an offer, to purchase such subscription rights or shares of common
stock before the completion of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you sell or otherwise transfer your rights to subscribe for common stock in the
subscription offering or subscribe for common stock on behalf of another person, you may forfeit
those rights and face possible further sanctions and penalties imposed by the Office of Thrift
Supervision or another agency of the U.S. Government. We will pursue any and all legal and
equitable remedies if we become aware of the transfer of subscription rights and will not honor
orders known by us to involve the transfer of such rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Community Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that shares remain available for purchase after satisfaction of all
subscriptions received in the subscription offering, we may offer shares in a community offering to
the following persons in the following order of priority:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Natural persons and trusts of natural persons who are residents of Blount, Bradley,
Hamilton, Knox, Loudon, McMinn, Meigs, Monroe and Polk Counties in Tennessee; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other persons to whom we deliver a prospectus.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will consider persons to be residents of the above listed counties if they occupy a
dwelling in the county and have established an ongoing physical presence in the county that is not
merely transitory in nature. We may utilize depositor or loan records or other evidence provided
to us to make a determination as to whether a person is a resident of such counties. In all cases,
the determination of residence status will be made by us in our sole discretion.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->101<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchasers in the community offering are eligible to purchase up to $300,000 of common stock
(which equals 30,000 shares). If shares are available for preferred subscribers in the community
offering but there are insufficient shares to satisfy all orders, the available shares will be
allocated first to each preferred subscriber whose order we accept in an amount equal to the lesser
of 100 shares or the number of shares ordered by each such subscriber, if possible. After that,
unallocated shares will be allocated among the remaining preferred subscribers whose orders remain
unsatisfied in the same proportion that the unfilled order of each such subscriber bears to the
total unfilled orders of all such subscribers. If, after filling the orders of preferred
subscribers in the community offering, shares are available for other subscribers in the community
offering but there are insufficient shares to satisfy all orders, shares will be allocated in the
same manner as for preferred subscribers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The community offering, if held, may commence concurrently with, during or after the
subscription offering and will terminate no later than 45&nbsp;days after the close of the subscription
offering unless extended by us, with approval of the Office of Thrift Supervision. If we receive
regulatory approval for an extension, all subscribers will be notified of the extension and of the
duration of any extension that has been granted, and will have the right to confirm, increase,
decrease or rescind their orders. If we do not receive an affirmative response from a subscriber to
any resolicitation, the subscriber&#146;s order will be rescinded and all funds received will be
promptly returned with interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The opportunity to subscribe for shares of common stock in the community offering is subject
to our right to reject orders, in whole or part, either at the time of receipt of an order or as
soon as practicable following the expiration date of the offering. If your order is rejected in
part, you will not have the right to cancel the remainder of your order.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Syndicated Community Offering or Underwritten Public Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan of conversion provides that, if necessary, all shares of common stock not purchased
in the subscription offering and community offering may be offered for sale to the general public
in a syndicated community offering to be managed by Keefe, Bruyette &#038; Woods, Inc., acting as our
agent. In such capacity, Keefe, Bruyette &#038; Woods, Inc. may form a syndicate of other
brokers-dealers who are member firms of the Financial Industry Regulatory Authority (formerly known
as the National Association of Securities Dealers, Inc.) (&#147;FINRA&#148;). Alternatively, we may sell any
remaining shares in an underwritten public offering. Neither Keefe, Bruyette &#038; Woods, Inc. nor any
registered broker-dealer will have any obligation to take or purchase any shares of the common
stock in the syndicated community offering; however, Keefe, Bruyette &#038; Woods, Inc. has agreed to
use its best efforts in the sale of shares in any syndicated community offering. We have not
selected any particular broker-dealers to participate in a syndicated community offering and will
not do so until before the commencement of the syndicated community offering. The syndicated
community offering would terminate no later than 45&nbsp;days after the expiration of the subscription
offering, unless extended by us, with approval of the Office of Thrift Supervision. See <I>&#147;&#151;
Community Offering&#148; </I>above for a discussion of rights of subscribers if an extension is granted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The opportunity to subscribe for shares of common stock in the syndicated community offering
or underwritten public offering is subject to our right in our sole discretion to accept or reject
orders, in whole or part, either at the time of receipt of an order or as soon as practicable
following the expiration date of the offering. If your order is rejected in part, you will not have
the right to cancel the remainder of your order.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock sold in the syndicated community offering also will be sold at the $10.00 per
share purchase price. Purchasers in the syndicated community offering are eligible to purchase up
to $300,000 of common stock (which equals 30,000 shares). Orders for common stock in the syndicated
community offering will be filled first to a maximum of 2% of the total number of shares sold in
the offering and thereafter any remaining shares will be allocated on an equal number of shares
basis per order until all orders have been filled. However, no fractional shares will be issued. We
may begin the syndicated community offering or underwritten public offering at any time following
the commencement of the subscription offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selected dealers, if any, will send confirmations of the orders to customers on the next
business day after the order date. Selected dealers will debit the accounts of their customers on
the settlement date, which date will be three business days from the order date. Customers who
authorize selected dealers to debit their brokerage accounts are required to have the funds for
payment in their account on but not before the settlement date. On the settlement
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->102<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">date, selected dealers will deposit funds to the account established at Athens Federal Community
Bank for each selected dealer. Each customer&#146;s funds forwarded to one of these accounts, along
with all other accounts held in the same title, will be insured by the Federal Deposit Insurance
Corporation in accordance with applicable regulations. After payment has been received by us from
selected dealers, funds will earn interest at Athens Federal Community Bank&#146;s regular savings rate
until the completion or termination of the offering. Funds will be promptly returned, with
interest, if the syndicated community offering is not completed. Keefe, Bruyette &#038; Woods, Inc.
shall also have the right, in its sole discretion, to permit investors to submit irrevocable orders
together with legally binding commitments for payment for shares for which they subscribe at any
time before the closing of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are unable to find purchasers from the general public for all unsubscribed shares, we
will make other purchase arrangements, if feasible. Other purchase arrangements must be approved by
the Office of Thrift Supervision and may provide for purchases for investment purposes by
directors, officers, their associates and other persons in excess of the limitations provided in
the plan of conversion and in excess of the proposed director and executive officer purchases
discussed earlier, although no such purchases are currently intended. If other purchase
arrangements cannot be made, we may: terminate the stock offering and promptly return all funds;
promptly return all funds, set a new offering range and give all subscribers the opportunity to
place a new order for shares of Athens Bancshares Corporation common stock; or take such other
actions as may be permitted by the Office of Thrift Supervision and the Securities and Exchange
Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Limitations on Purchases of Shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the purchase limitations described above under <I>&#147;Subscription Offering and
Subscription Rights,&#148; &#147;&#151; Community Offering&#148; </I>and <I>&#147;Syndicated Community Offering or Underwritten
Public Offering,&#148; </I>the plan of conversion provides for the following purchase limitations:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for our tax-qualified employee benefit plans, no individual may purchase in
the aggregate more than $300,000 of the common stock, or 30,000 shares sold in the
offering, subject to increase as described below. In addition, no person, either alone
or together with associates of or persons acting in concert with such person, may
purchase more than $500,000 of the common stock, or 50,000 shares sold in the offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our tax-qualified employee benefit plans are entitled to purchase up to 10.0% of the
shares sold in the conversion and contributed to the charitable foundation. As a tax-
qualified employee benefit plan, our employee stock ownership plan intends to purchase
8.0% of the sum of the shares sold in the offering and contributed to the charitable
foundation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each subscriber must subscribe for a minimum of 25 shares.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our directors and executive officers, together with their associates, may purchase
in the aggregate up to 31% of the common stock sold in the offering.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may, in our sole discretion, increase the individual or aggregate purchase limitation to up
to 5% of the shares of common stock sold in the offering. We do not intend to increase the maximum
purchase limitation unless market conditions warrant. If we decide to increase the purchase
limitations, persons who subscribed for the maximum number of shares of common stock will be given
the opportunity to increase their subscriptions accordingly, subject to the rights and preferences
of any person who has priority subscription rights. We, in our discretion, also may give other
large subscribers the right to increase their subscriptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we increase the maximum purchase limitation to 5% of the shares of common stock sold in the
offering, we may further increase the maximum purchase limitation to 9.99%, provided that orders
for common stock exceeding 5% of the shares of common stock sold in the offering may not exceed in
the aggregate 10% of the total shares of common stock sold in the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan of conversion defines &#147;acting in concert&#148; to mean knowing participation in a joint
activity or interdependent conscious parallel action towards a common goal whether or not by an
express agreement or understanding; or a combination or pooling of voting or other interests in the securities of an
issuer for a common
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->103<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">purpose under any contract, understanding, relationship, agreement or other
arrangement, whether written or otherwise. In general, a person who acts in concert with another
party will also be deemed to be acting in concert with any person who is also acting in concert
with that other party. We may presume that certain persons are acting in concert based upon, among
other things, joint account relationships or the fact that persons share a common address (whether
or not related by blood or marriage) or may have filed joint Schedules 13D or 13G with the
Securities and Exchange Commission with respect to other companies. For purposes of the plan of
conversion, our directors are not deemed to be acting in concert solely by reason of their Board
membership.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan of conversion defines &#147;associate,&#148; with respect to a particular person, to mean:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a corporation or organization other than Athens Bancshares Corporation or Athens
Federal Community Bank or a majority-owned subsidiary of Athens Bancshares Corporation
or Athens Federal Community Bank of which a person is a senior officer or partner or
is, directly or indirectly, the beneficial owner of 10% or more of any class of equity
securities of such corporation or organization;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a trust or other estate in which a person has a substantial beneficial interest or
as to which a person serves as a trustee or a fiduciary; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any person who is related by blood or marriage to such person and who lives in the
same home as such person or who is a director or senior officer of Athens Bancshares
Corporation or Athens Federal Community Bank or any of their subsidiaries.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For example, a corporation of which a person serves as an officer would be an associate of
that person and, therefore, all shares purchased by the corporation would be included with the
number of shares that the person could purchase individually under the aggregate purchase
limitation described above. We have the right in our sole discretion to reject any order submitted
by a person whose representations we believe to be false or who we otherwise believe, either alone
or acting in concert with others, is violating or circumventing, or intends to violate or
circumvent, the terms and conditions of the plan of conversion. Directors and officers are not
treated as associates of each other solely by virtue of holding such positions. We have the sole
discretion to determine whether prospective purchasers are &#147;associates&#148; or &#147;acting in concert.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Marketing Arrangements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have retained Keefe, Bruyette &#038; Woods, Inc. to consult with and advise and assist us, on a
best efforts basis, in the distribution of shares in the offering. Keefe, Bruyette &#038; Woods, Inc. is
a broker-dealer registered with the Securities and Exchange Commission and a member of the FINRA.
Keefe, Bruyette &#038; Woods, Inc. will assist us in the conversion by acting as marketing advisor with
respect to the subscription offering and will represent us as placement agent on a best efforts
basis in the sale of the common stock in the community offering, if held. The services that Keefe,
Bruyette &#038; Woods, Inc. will provide include, but are not limited to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>training our employees who will perform ministerial functions in the subscription
offering and community offering regarding the mechanics and regulatory requirements of
the stock offering process;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>managing the stock information center by assisting interested stock subscribers and
by keeping records of all stock orders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>preparing marketing materials; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>assisting in the solicitation of proxies from Athens Federal Community Bank&#146;s
members for use at the special meeting.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->104<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also engaged Keefe, Bruyette &#038; Woods, Inc. to act as our conversion agent in
connection with the stock offering. In its role as conversion agent, Keefe, Bruyette &#038; Woods, Inc.
will assist us in the stock offering as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>develop a master file and consolidation of accounts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>generate address lists for the mailing of proxy solicitation and stock offering
materials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provide software for the operation of the stock information center; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subscription order processing and stock allocation services.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For all these services, Keefe, Bruyette &#038; Woods, Inc. will receive a success fee equal to the
greater of: (i) $200,000 or (ii)&nbsp;1.125% of the aggregate dollar amount of the common stock sold in
the subscription and community offerings to persons other than the employee stock ownership plan
and directors, officers and employees of Athens Federal Community Bank or their immediate families
and shares issued to the charitable foundation. We have paid Keefe, Bruyette &#038; Woods, Inc. a
management fee of $30,000 that will be applied against the success fee. We will reimburse Keefe,
Bruyette &#038; Woods, Inc. for its expenses, including the fees and expenses of its counsel not to
exceed $50,000, associated with its marketing effort. If there is a syndicated community offering,
the total fees paid to Keefe, Bruyette &#038; Woods, Inc. and other FINRA member firms in the syndicated
community offering will not exceed 5.5% of the aggregate dollar amount of the common stock sold in
the syndicated community offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Keefe, Bruyette &#038; Woods, Inc. has not prepared any report or opinion constituting a
recommendation or advice to us or to persons who subscribe for stock, nor has it prepared an
opinion as to the fairness to us of the purchase price or the terms of the stock to be sold.
Keefe, Bruyette &#038; Woods, Inc. expresses no opinion as to the prices at which common stock to be
issued may trade. Keefe, Bruyette &#038; Woods, Inc. and selected dealers participating in the
syndicated community offering may receive a commission in the syndicated community offering in a
maximum amount to be agreed upon by us to reflect market requirements at the time of the allocation
of shares in the syndicated community offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also agreed to indemnify Keefe, Bruyette &#038; Woods, Inc. against liabilities and
expenses, including legal fees, incurred in connection with certain claims or litigation arising
out of or based upon untrue statements or omissions contained in the offering materials for the
common stock, including liabilities under the Securities Act of 1933 and the performance of Keefe,
Bruyette &#038; Woods, Inc. of its services in connection with the conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Description of Sales Activities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation will offer the common stock in the subscription offering and
community offering by the distribution of this prospectus and through activities conducted at the
stock information center. The stock information center is expected to operate during normal
business hours throughout the subscription offering and community offering. It is expected that at
any particular time one or more Keefe, Bruyette &#038; Woods, Inc. employees will be working at the
stock information center. Employees of Keefe, Bruyette &#038; Woods, Inc. will be responsible for
responding to questions regarding the conversion and the offering and processing stock orders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales of common stock will be made by registered representatives affiliated with Keefe,
Bruyette &#038; Woods, Inc. or by the selected dealers managed by Keefe, Bruyette &#038; Woods, Inc. Athens
Federal Community Bank&#146;s officers and employees may participate in the offering in clerical
capacities, providing administrative support in effecting sales transactions or, when permitted by
state securities laws, answering questions of a mechanical nature relating to the proper execution
of the order form. Athens Federal Community Bank&#146;s officers may answer questions regarding our
business when permitted by state securities laws. Other questions of prospective purchasers,
including questions as to the advisability or nature of the investment, will be directed to
registered representatives. Athens Federal Community Bank&#146;s officers and employees have been
instructed not to solicit offers to purchase common stock or provide advice regarding the purchase
of common stock.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->105<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No officer, director or employee of Athens Federal Community Bank will be compensated,
directly or indirectly, for any activities in connection with the offer or sale of common stock in
the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of Athens Federal Community Bank&#146;s personnel participating in the offering is registered
or licensed as a broker or dealer or an agent of a broker or dealer. Athens Federal Community
Bank&#146;s personnel will assist in the above-described sales activities under an exemption from
registration as a broker or dealer provided by Rule&nbsp;3a4-l promulgated under the Securities Exchange
Act of 1934. Rule&nbsp;3a4-l generally provides that an &#147;associated person of an issuer&#148; of securities
will not be deemed a broker solely by reason of participation in the sale of securities of the
issuer if the associated person meets certain conditions. These conditions include, but are not
limited to, that the associated person participating in the sale of an issuer&#146;s securities not be
compensated in connection with the offering at the time of participation, that the person not be
associated with a broker or dealer and that the person observe certain limitations on his or her
participation in the sale of securities. For purposes of this exemption, &#147;associated person of an
issuer&#148; is defined to include any person who is a director, officer or employee of the issuer or a
company that controls, is controlled by or is under common control with the issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Procedure for Purchasing Shares in the Subscription and Community Offerings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Use of Order Forms. </I></B>To purchase shares in the subscription offering, a properly completed and
executed order form must be received (not postmarked) by us in our stock information center by
&#95;&#95;&#95;:&#95;&#95;&#95; p.m., Eastern time, on &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;. Your order form must be accompanied by full payment
for all of the shares subscribed for or include appropriate authorization in the space provided on
the order form for withdrawal of full payment from a deposit account with Athens Federal Community
Bank. To purchase shares in the community offering, you must deliver a properly completed and
executed order form to us, accompanied by the required payment for each share subscribed for,
before the community offering terminates, which may be on, or at any time after, the end of the
subscription offering. Our interpretation of the terms and conditions of the plan of conversion
and of the acceptability of the order forms will be final.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>To ensure that your stock purchase eligibility and priority are properly identified, you must
list all accounts on the order form, giving all names in each account and the account number. We
will strive to identify your ownership in all accounts, but cannot guarantee we will identify all
accounts in which you have an ownership interest. Failure to list all of your accounts may result
in fewer shares being allocated to you than if all of your accounts were listed.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We need not accept order forms that are received after the expiration of the subscription
offering or community offering, as the case may be, or that are executed defectively or that are
received without full payment or without appropriate withdrawal instructions. In addition, we are
not obligated to accept orders submitted on photocopied or facsimilied stock order forms. We have
the right to waive or permit the correction of incomplete or improperly executed order forms, but
do not represent that we will do so. Under the plan of conversion, our interpretation of the terms
and conditions of the plan of conversion and of the order form will be final. Once received, an
executed order form may not be modified, amended or rescinded without our consent unless the
offering has not been completed within 45&nbsp;days after the end of the subscription offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The reverse side of the order form contains a regulatorily mandated certification form. We
will not accept order forms where the certification form is not executed. By executing and
returning the certification form, you will be certifying that you received this prospectus and
acknowledging that the common stock is not a deposit account and is not insured or guaranteed by
the federal government. You also will be acknowledging that you received disclosure concerning the
risks involved in this offering. The certification form could be used as support to show that you
understand the nature of this investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To ensure that each purchaser in the subscription and community offering receives a prospectus
at least 48 hours before the end of the subscription and community offering, as required by Rule
15c2-8 under the Securities Exchange Act of 1934, as amended, no prospectus will be mailed any
later than five days before that date or hand delivered any later than two days before that date.
Execution of the order form will confirm receipt or delivery under Rule&nbsp;15c2-8. Order forms will
be distributed only when preceded or accompanied by a prospectus.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->106<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Payment for Shares. </I></B>Payment for subscriptions may be made by check, bank draft or money
order, or by authorization of withdrawal from deposit accounts maintained with Athens Federal
Community Bank. Funds received before the completion of the offering will be maintained in a
segregated account at Athens Federal Community Bank or, at our discretion, at another federally
insured depository institution. However, we will not maintain more than one escrow account. All
subscriptions received will bear interest at Athens Federal Community Bank&#146;s passbook savings rate,
which is currently 0.3% per annum. Subscribers&#146; funds will be transmitted to the segregated
account no later than noon of the next business day where they will be invested in investments that
are permissible under Securities and Exchange Commission Rule&nbsp;15c2-4. Appropriate means by which
withdrawals may be authorized are provided on the order form. No wire transfers or third party
checks will be accepted. Interest will be paid on payments made by check, bank draft or money
order at our passbook rate from the date payment is received at the conversion center until the
completion or termination of the offering. Payment in cash will not be accepted unless the cash is
converted into a bank check or money order. If payment is made by authorization of withdrawal from
deposit accounts, the funds authorized to be withdrawn from a deposit account will continue to
accrue interest at the contractual rates until completion or termination of the offering, but a
hold will be placed on the funds, making them unavailable to the depositor until completion or
termination of the offering. When the offering is completed, the funds received in the offering
will be used to purchase the shares of common stock ordered. The shares of common stock issued in
the offering cannot and will not be insured by the Federal Deposit Insurance Corporation or any
other government agency. If the offering is not consummated for any reason, all funds submitted
will be promptly refunded with interest as described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a subscriber authorizes us to withdraw the amount of the purchase price from his or her
deposit account, we will do so as of the completion of the offering, though the account must
contain the full amount necessary for payment at the time the subscription order is received. We
will waive any applicable penalties for early withdrawal from certificate accounts. If the
remaining balance in a certificate account is reduced below the applicable minimum balance
requirement at the time funds are actually transferred under the authorization, the certificate
will be canceled at the time of the withdrawal, without penalty, and the remaining balance will
earn interest at our passbook rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The employee stock ownership plan will not be required to pay for the shares subscribed for at
the time it subscribes, but rather may pay for shares of common stock subscribed for upon the
completion of the offering; provided that there is in force from the time of its subscription until
the completion of the offering a loan commitment from an unrelated financial institution or from us
to lend to the employee stock ownership plan, at that time, the aggregate purchase price of the
shares for which it subscribed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may, in our sole discretion, permit institutional investors to submit irrevocable orders
together with the legally binding commitment for payment and to thereafter pay for such shares of
common stock for which they subscribe in the community offering at any time before the 48 hours
before the completion of the offering. This payment may be made by wire transfer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our individual retirement accounts (&#147;IRAs&#148;) do not permit investment in common stock. A
depositor interested in using his or her IRA funds to purchase common stock must do so through a
self-directed IRA. Since we do not offer those accounts, we will allow a depositor to make a
trustee-to-trustee transfer of the IRA funds to a trustee offering a self-directed IRA program with
the agreement that the funds will be used to purchase our common stock in the offering. There will
be no early withdrawal or Internal Revenue Service interest penalties for such transfers. The new
trustee would hold the common stock in a self-directed account in the same manner as we now hold
the depositor&#146;s IRA funds. An annual administrative fee may be payable to the new trustee.
Depositors interested in using funds in an IRA with us to purchase common stock should contact the
conversion center as soon as possible so that the necessary forms may be forwarded for execution
and returned before the subscription offering ends. In addition, federal laws and regulations
require that officers, directors and 10% shareholders who use self-directed IRA funds to purchase
shares of common stock in the subscription offering, make purchases for the exclusive benefit of
IRAs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>How We Determined the Offering Range and the $10.00 Per Share Purchase Price</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal regulations require that the aggregate purchase price of the securities sold in
connection with the offering be based upon our estimated pro forma value, as determined by an
independent appraisal. We have retained Keller &#038; Company, Inc., which is experienced in the
evaluation and appraisal of business entities, to prepare the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->107<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">independent appraisal. Keller &#038; Company will receive fees totaling $35,000 for its appraisal
services, plus $2,000 for each appraisal valuation update other than the required final valuation
update at closing, and a maximum of $1,500 for reimbursement of out-of-pocket expenses. We have
agreed to indemnify Keller &#038; Company and its employees and affiliates for certain costs and
expenses, including reasonable legal fees arising out of, related to, or based upon the offering
and due to any misstatement or untrue statement or intentional omission by Athens Federal Community
Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Keller &#038; Company prepared the appraisal taking into account the pro forma impact of the
offering. For its analysis, Keller &#038; Company undertook substantial investigations to learn about
our business and operations. We supplied financial information, including annual financial
statements, information on the composition of assets and liabilities, and other financial
schedules. In addition to this information, Keller &#038; Company reviewed our stock issuance
application as filed with the Office of Thrift Supervision and our registration statement as filed
with the Securities and Exchange Commission. Furthermore, Keller &#038; Company visited our facilities
and had discussions with our management. Keller &#038; Company did not perform a detailed individual
analysis of the separate components of our assets and liabilities. We did not impose any
limitations on Keller &#038; Company in connection with its appraisal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with its appraisal, Keller &#038; Company reviewed the following factors, among
others:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our present and projected operating results and financial condition;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the economic and demographic conditions of our primary market area;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pertinent historical financial and other information relating to Athens Federal
Community Bank;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a comparative evaluation of our operating and financial statistics with those of
other thrift institutions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the proposed price per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the aggregate size of the offering of common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of the conversion on our capital position and earnings potential; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the trading market for securities of comparable institutions and general conditions
in the market for such securities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consistent with Office of Thrift Supervision appraisal guidelines, Keller &#038; Company&#146;s
analysis utilized three selected valuation procedures, the price/tangible book method, the
price/core earnings method, and the price/assets method, all of which are described in its report.
Keller &#038; Company&#146;s appraisal report is filed as an exhibit to the registration statement that we
have filed with the Securities and Exchange Commission. See <I>&#147;Where You Can Find More Information.&#148;</I>
Keller &#038; Company placed the greatest emphasis on the price/core earnings and price/tangible book
methods in estimating pro forma market value. Keller &#038; Company compared the pro forma
price/tangible book and price/core earnings ratios for Athens Bancshares Corporation to the same
ratios for a peer group of comparable companies. The peer group included companies with:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>average assets of $532.0&nbsp;million;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>average non-performing assets of 0.88% of total assets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>average net loans of 72.27% of total assets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>average equity of 12.07% of total assets; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>average core income of 0.63% of average assets.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->108<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the basis of the analysis in its report, Keller &#038; Company has advised us that, in its
opinion, as of August&nbsp;19, 2009, our estimated pro forma market value, including shares contributed
to the Athens Federal Foundation, was within the valuation range of $16.2&nbsp;million and $21.9&nbsp;million
with a midpoint of $19.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents a summary of selected pricing ratios for Athens Bancshares
Corporation, for the peer group companies and for all publicly traded thrifts. Compared to the
average pricing ratios of the peer group, Athens Bancshares Corporation&#146;s pro forma pricing ratios
at the maximum of the offering range indicated discount of 18.85% on a price-to-tangible book value
basis.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price to Core</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price to Tangible</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Earnings</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price to Book</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Book Value</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Multiple (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value Ratio (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Ratio (2)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Athens Bancshares Corporation (pro forma):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Minimum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.97</TD>
    <TD nowrap>x</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">42.91</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">43.66</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Midpoint</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48.11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Maximum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52.49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Maximum, as adjusted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55.98</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peer Group:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.06</TD>
    <TD nowrap>x</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">63.12</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">72.11</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Median</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All publicly-traded thrift:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.71</TD>
    <TD nowrap>x</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">66.98</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">73.53</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Median</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Ratios are based on earnings for the twelve months ended December&nbsp;31, 2008 or June&nbsp;30, 2009,
and share prices as of August&nbsp;19, 2009.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Ratios are based on book value as of December&nbsp;31, 2008 or June&nbsp;30, 2009, and share prices as of
August&nbsp;19, 2009.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma information presented under <I>&#147;Pro Forma Data&#148; </I>reflects an estimated expense for
the equity incentive plan that may be adopted by Athens Bancshares Corporation and the resulting
effect on the pro forma price-to-earnings multiples for Athens Bancshares Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors reviewed Keller &#038; Company&#146;s appraisal report, including the methodology
and the assumptions used by Keller &#038; Company, and determined that the valuation range was
reasonable and adequate. Assuming that the shares are sold at $10.00 per share in the conversion,
the estimated number of shares would be between 1,615,000 at the minimum of the valuation range and
2,185,000 at the maximum of the valuation range, with a midpoint of 1,900,000, which amount
includes shares contributed to the foundation. The purchase price of $10.00 per share was
determined by us, taking into account, among other factors, the requirement under Office of Thrift
Supervision regulations that the common stock be offered in a manner that will achieve the widest
distribution of the stock and desired liquidity in the common stock after the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the outcome of the offering relates in large measure to market conditions at the time of
sale, it is not possible for us to determine the exact number of shares that we will issue at this
time. The offering range may be amended, with the approval of the Office of Thrift Supervision, if
necessitated by developments following the date of the appraisal in, among other things, market
conditions, our financial condition or operating results, regulatory guidelines or national or
local economic conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, upon completion of the subscription offering, at least the minimum number of shares are
subscribed for, Keller &#038; Company, after taking into account factors similar to those involved in
its prior appraisal, will determine its estimate of our pro forma market value as of the close of
the subscription offering. If, as a result of regulatory considerations, demand for the shares or
changes in market conditions, Keller &#038; Company determines that our pro forma market value has
increased, we may sell up to 2,412,750 shares without any further notice to you.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No shares will be sold unless Keller &#038; Company confirms that, to the best of its knowledge and
judgment, nothing of a material nature has occurred that would cause it to conclude that the actual
total purchase price of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->109<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">shares on an aggregate basis was materially incompatible with its appraisal. If, however, the
facts do not justify that statement, we may either: terminate the stock offering and promptly
return all funds; set a new offering range, notify all subscribers and give them the opportunity to
place a new order for shares of Athens Bancshares Corporation common stock; or take such other
actions as may be permitted by the Office of Thrift Supervision. If the offering is terminated all
subscriptions will be cancelled and subscription funds will be returned promptly with interest, and
holds on funds authorized for withdrawal from deposit accounts will be released or reduced. If
Keller &#038; Company establishes a new valuation range, it must be approved by the Office of Thrift
Supervision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In formulating its appraisal, Keller &#038; Company relied upon the truthfulness, accuracy and
completeness of all documents we furnished to it. Keller &#038; Company also considered financial and
other information from regulatory agencies, other financial institutions, and other public sources,
as appropriate. While Keller &#038; Company believes this information to be reliable, Keller &#038; Company
does not guarantee the accuracy or completeness of the information and did not independently verify
the consolidated financial statements and other data provided by us nor independently value our
assets or liabilities. The appraisal is not intended to be, and must not be interpreted as, a
recommendation of any-kind as to the advisability of purchasing shares of common stock. Moreover,
because the appraisal must be based on many factors that change periodically, there is no assurance
that purchasers of shares in the offering will be able to sell shares after the offering at prices
at or above the purchase price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of the appraisal report of Keller &#038; Company, including any amendments to the report,
and the detailed memorandum of the appraiser setting forth the method and assumptions for such
appraisal are available for inspection at our main office and the other locations specified under
<I>&#147;Where You Can Find More Information.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Delivery of Certificates</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificates representing the common stock sold in the offering will be mailed by our transfer
agent to the persons whose subscriptions or orders are filled at the addresses of such persons
appearing on the stock order form as soon as practicable following completion of the offering. We
will hold certificates returned as undeliverable until claimed by the persons legally entitled to
the certificates or otherwise disposed of in accordance with applicable law. <B>Until certificates
for common stock are available and delivered to subscribers, subscribers may not be able to sell
their shares, even though trading of the common stock may have commenced.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions on Repurchase of Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Office of Thrift Supervision regulations, we may not for a period of one year from the
date of the completion of the offering repurchase any of our common stock from any person, except
(1)&nbsp;in an offer made to all shareholders to repurchase the common stock on a pro rata basis,
approved by the Office of Thrift Supervision, (2)&nbsp;the repurchase of qualifying shares of a
director, or (3)&nbsp;repurchases to fund restricted stock plans or tax-qualified employee stock benefit
plans. Where extraordinary circumstances exist, the Office of Thrift Supervision may approve the
open market repurchase of up to 5% of our common stock during the first year following the
offering. To receive such approval, we must establish compelling and valid business purposes for
the repurchase to the satisfaction of the Office of Thrift Supervision. Furthermore, repurchases
of any common stock are prohibited if they would cause Athens Federal Community Bank&#146;s regulatory
capital to be reduced below the amount required under the regulatory capital requirements imposed
by the Office of Thrift Supervision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions on Transfer of Shares After the Conversion Applicable to Officers and Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock purchased in the offering will be freely transferable, except for shares
purchased by our directors and executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of common stock purchased by our directors and executive officers may not be sold for a
period of one year following the offering, except upon the death of the shareholder or unless
approved by the Office of Thrift Supervision. Shares purchased by these persons in the open market
after the offering will be free of this restriction. Shares of common stock issued to directors
and executive officers will bear a legend giving appropriate notice of the restriction and, in
addition, we will give appropriate instructions to our transfer agent with respect to the
restriction
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->110<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">on transfers. Any shares issued to directors and executive officers as a stock dividend, stock
split or otherwise with respect to restricted common stock will be similarly restricted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Persons affiliated with us, including our directors and executive officers, received
subscription rights based only on their deposits with Athens Federal Community Bank as account
holders. Any purchases made by persons affiliated with us for the explicit purpose of meeting the
minimum of the offering must be made for investment purposes only, and not with a view towards
redistribution. Furthermore, as set forth above, Office of Thrift Supervision regulations restrict
sales of common stock purchased in the offering by directors and executive officers for a period of
one year following the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of outstanding shares of our common stock by directors, officers, or any person who
becomes an executive officer or director after adoption of the plan of conversion, and their
associates, during the three-year period following the offering may be made only through a broker
or dealer registered with the Securities and Exchange Commission, except with the prior written
approval of the Office of Thrift Supervision. This restriction does not apply, however, to
negotiated transactions involving more than 1% of our outstanding common stock or to the purchase
of stock under stock benefit plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended, for the registration of the common stock to be issued in the
offering and contributed to the charitable foundation. This registration does not cover the resale
of the shares. Shares of common stock purchased by persons who are not affiliates of us may be
resold without registration. Shares purchased by an affiliate of us will have resale restrictions
under Rule&nbsp;144 of the Securities Act. If we meet the current public information requirements of
Rule&nbsp;144, each affiliate of ours who complies with the other conditions of Rule&nbsp;144, including
those that require the affiliate&#146;s sale to be aggregated with those of certain other persons, would
be able to sell in the public market, without registration, a number of shares not to exceed, in
any three-month period, the greater of 1% of our outstanding shares or the average weekly volume of
trading in the shares during the preceding four calendar weeks. We may make future provision to
permit affiliates to have their shares registered for sale under the Securities Act under certain
circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Interpretation, Amendment and Termination</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by law, all interpretations by us of the plan of conversion will be
final; however, such interpretations have no binding effect on the Office of Thrift Supervision.
The plan of conversion provides that, if deemed necessary or desirable, we may substantively amend
the plan of conversion as a result of comments from regulatory authorities or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Completion of the offering requires the sale of all shares of the common stock within 90&nbsp;days
following approval of the plan of conversion by the Office of Thrift Supervision, unless an
extension is granted by the Office of Thrift Supervision. If this condition is not satisfied, the
plan of conversion will be terminated and we will continue our business as a federal mutual savings
bank. We may terminate the plan of conversion at any time.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->111<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="147"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Athens Federal Foundation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In furtherance of our commitment to our local community, the plan of conversion provides that
we will establish a charitable foundation in connection with the conversion. We intend to
establish the Athens Federal Foundation as a non-stock Delaware corporation to serve as the
charitable foundation. The foundation will be funded with Athens Bancshares Corporation common
stock and cash as described below. By further enhancing our visibility and reputation in our local
community, we believe that the foundation will enhance the long-term value of our community banking
franchise. We believe the conversion presents us with a unique opportunity to provide a
substantial and continuing benefit to our community and to receive the associated tax benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purpose of the Charitable Foundation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We emphasize community lending and community activities. The Athens Federal Foundation is
being formed to complement, not to replace, our existing community activities. Although we intend
to continue to emphasize community lending and community activities following the conversion, such
activities are not our sole corporate purpose. The Athens Federal Foundation will be dedicated
completely to community activities and the promotion of charitable causes, and may be able to
support such activities in manners that are not presently available to us. We believe that the
Athens Federal Foundation will enable us to assist the communities within our market areas in areas
beyond community development and lending and will enhance our current activities under the
Community Reinvestment Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We further believe that the funding of the Athens Federal Foundation with our common stock in
addition to cash will allow our community to share in our potential growth and success long after
the conversion. The Athens Federal Foundation will accomplish that goal by providing for continued
ties between our community and us, thereby forming a partnership within the communities in which we
operate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not expect the contribution to the Athens Federal Foundation to take the place of our
traditional community lending and charitable activities. For the six months ended June&nbsp;30, 2009
and the years ended December&nbsp;31, 2008 and 2007, we contributed $21,000, $35,000 and $68,000,
respectively, to community organizations. We expect to continue making charitable contributions
and donations within our community. In connection with the closing of the offering, we intend to
contribute to the Athens Federal Foundation 100,000 shares of our common stock and $100,000 in
cash.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Structure and Regulatory Requirements of the Charitable Foundation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Athens Federal Foundation will be incorporated under Delaware law as a non-stock
corporation. The certificate of incorporation of the Athens Federal Foundation will provide that
the Athens Federal Foundation is organized exclusively for charitable purposes as set forth in
Section&nbsp;501(c)(3) of the Internal Revenue Code. The Certificate of Incorporation will further
provide that no part of the net earnings of the foundation will inure to the benefit of, or be
distributable to, its directors, officers or members. Pursuant to regulations of the Office of
Thrift Supervision, Athens Federal Foundation&#146;s certificate of incorporation and gift instrument
must also provide that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The charitable organization&#146;s primary purpose is to serve and make grants in Athens
Federal Community Bank&#146;s local community.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As long as the Athens Federal Foundation controls shares of Athens Bancshares
Corporation, it must vote those shares in the same ratio as all other shares voted on
each proposal considered by Athens Bancshares Corporation&#146;s shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For at least five years after its organization, one seat on the Athens Federal
Foundation&#146;s board of directors is reserved for an independent director from Athens
Federal Community Bank&#146;s local community. This director may not be an employee,
officer or director of Athens Federal</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->112<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Community Bank or an affiliate of Athens Federal Community Bank, and should have
experience with local community charitable organizations and grant making.</TD>
</TR><TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For at least five years after its organization, one seat on the Athens Federal
Foundation&#146;s board of directors is reserved for a director from Athens Federal
Community Bank&#146;s board of directors or the board of directors of an acquirer or
resulting institution in the event of a merger or acquisition of Athens Federal
Community Bank.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Office of Thrift Supervision may examine the charitable organization at the
charitable organization&#146;s expense.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The charitable organization must comply with all supervisory directives that the
Office of Thrift Supervision imposes.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The charitable organization must annually provide the Office of Thrift Supervision
with a copy of the annual report that the charitable organization submitted to the
Internal Revenue Service.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The charitable organization must operate according to written policies adopted by
its board of directors, including a conflict of interest policy.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The charitable organization may not engage in self-dealing, and must comply with all
laws necessary to maintain its tax-exempt status under the Internal Revenue Code.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, within six months of completing the conversion, Athens Federal Foundation must
submit to the Office of Thrift Supervision a three-year operating plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three directors of Athens Federal Community Bank will serve on the initial board of directors
of the foundation: Elaine M. Cathcart, Lyn B. Thompson and Larry D. Wallace. We also will select
one additional person to serve on the foundation&#146;s board of directors who will not be one of our
employees, officers or directors. As required by the Office of Thrift Supervision regulations,
this other director will have experience with local charitable organizations and grant making.
While there are no plans to change the size of the initial board of directors during the year
following the composition of its board of directors, following the first anniversary of the
conversion, the foundation may alter the size and composition of its board of directors. It is
currently not anticipated that directors of the foundation will receive compensation for their
service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The board of directors of the Athens Federal Foundation will be responsible for establishing
its grant and donation policies, consistent with the purposes for which it was established. As
directors of a nonprofit corporation, directors of the Athens Federal Foundation will always be
bound by their fiduciary duty to advance the foundation&#146;s charitable goals, to protect its assets
and to act in a manner consistent with the charitable purposes for which the foundation is
established. The directors of the Athens Federal Foundation also will be responsible for directing
the activities of the foundation, including the management and voting of our common stock held by
the foundation. However, as required by Office of Thrift Supervision regulations, all shares of
common stock held by the Athens Federal Foundation must be voted in the same ratio as all other
shares of the common stock on all proposals considered by our shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Foundation&#146;s place of business will be located at our main offices. The board
of directors of Athens Federal Foundation will appoint such officers and employees as may be
necessary to manage its operations, although no employees are expected to be hired. To the extent
applicable, we will comply with the affiliates restrictions set forth in Sections&nbsp;23A and 23B of
the Federal Reserve Act and the Office of Thrift Supervision regulations governing transactions
between us and the foundation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the initial cash contribution, Athens Federal Foundation will receive working
capital from: (1)&nbsp;any dividends that may be paid on our common stock in the future; (2)&nbsp;within the
limits of applicable federal and state laws, loans collateralized by the common stock; or (3)&nbsp;the
proceeds of the sale of any of the common stock in the open market from time to time. As a private
foundation under Section&nbsp;501(c)(3) of the Internal Revenue Code,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->113<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Athens Federal Foundation will be required to distribute annually in grants or donations a minimum
of 5% of the average fair market value of its net investment assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Tax Considerations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our independent tax advisor has advised us that an organization created for the above purposes
should qualify as a Section&nbsp;501(c)(3) exempt organization under the Internal Revenue Code and would
be classified as a private foundation. Athens Federal Foundation will submit a timely request to
the Internal Revenue Service to be recognized as an exempt organization. As long as Athens Federal
Foundation files its application for tax-exempt status within 27&nbsp;months from the date of its
organization, and provided the Internal Revenue Service approves the application, its effective
date as a Section&nbsp;501(c)(3) organization will be the date of its organization. Our independent tax
advisor, however, has not rendered any advice on whether Athens Federal Foundation&#146;s tax-exempt
status will be affected by the regulatory requirement that all shares
of our common stock held by
the Athens Federal Foundation must be voted in the same ratio as all other outstanding shares of
common stock voted on all proposals considered by our shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are authorized under federal law to make charitable contributions. We believe that the
conversion presents a unique opportunity to establish and fund a charitable foundation given the
substantial amount of additional capital being raised. In making such a determination, we
considered the dilutive impact of the contribution of common stock to the Athens Federal Foundation
on the amount of common stock to be sold in the conversion. See <I>&#147;Capitalization,&#148; &#147;Regulatory
Capital Compliance,&#148; </I>and <I>&#147;Comparison of Independent Valuation and Pro Forma Financial Information
With and Without the Foundation.&#148; </I>The amount of the contribution will not adversely impact our
financial condition. We therefore believe that the amount of the charitable foundation is
reasonable given our pro forma capital position and does not raise safety and soundness concerns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have received an opinion from our independent tax advisor that our contribution of our
stock to the Athens Federal Foundation should not constitute an act of self-dealing and that we
should be entitled to a deduction under federal law in the amount of the fair market value of the
stock at the time of the contribution, less the nominal amount that the Athens Federal Foundation
is required to pay us for such stock. Under the Internal Revenue Code, we are permitted to deduct
only an amount equal to 10% of our annual taxable income in any one year. We are permitted under
the Internal Revenue Code to carry the excess contribution over the five-year period following the
contribution to the Athens Federal Foundation. We estimate that substantially all of the
contribution should be deductible under federal law over the six-year period. However, we do not
have any assurance that the Internal Revenue Service will grant tax-exempt status to the
foundation. Furthermore, even if the contribution is deductible under federal law, we may not have
sufficient earnings to be able to use the deduction in full. We do not expect to make any further
contributions to the Athens Federal Foundation within the first five years following the initial
contribution, unless such contributions would be deductible under the Internal Revenue Code. Any
such decisions would be based on an assessment of, among other factors, our financial condition at
that time, the interests of our shareholders and depositors, and the financial condition and
operations of the foundation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we have received an opinion from our independent tax advisor that we should be
entitled to a deduction under federal law for the charitable contribution, there can be no
assurances that the Internal Revenue Service will recognize Athens Federal Foundation as a Section
501(c)(3) exempt organization or that the deduction will be permitted. In such event, our
contribution to the Athens Federal Foundation would be expensed without tax benefit, resulting in a
reduction in earnings in the year in which the Internal Revenue Service makes such a determination.
See <I>&#147;Risk Factors &#151; Risks Related to the Formation of the Charitable Foundation &#151; Our
contribution to the Athens Federal Foundation may not be tax deductible, which could negatively
impact our profits.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a private foundation, earnings and gains, if any, from the sale of common stock or other
assets are exempt from federal and sate income taxation. However, investment income, such as
interest, dividends and capital gains, is generally taxed at a rate of 2.0%. Athens Federal
Foundation will be required to file an annual return with the Internal Revenue Service within four
and one-half months after the close of its fiscal year. Athens Federal Foundation will be required
to make its annual return available for public inspection. The annual return for a private
foundation includes, among other things, an itemized list of all grants made or approved, showing
the amount of each grant, the recipient, any relationship between a grant recipient and the foundation&#146;s managers
and a concise statement of the purpose of each grant.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->114<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="148"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Restrictions on the Acquisition of<BR>
Athens Bancshares Corporation<BR>
and Athens Federal Community Bank</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank&#146;s plan of conversion provides for the conversion of Athens
Federal Community Bank from the mutual to the stock form of organization and, as part of the
conversion, the adoption of a new federal stock charter and bylaws by Athens Federal Community
Bank&#146;s members. The plan of conversion also provides for the concurrent formation of a holding
company. As described below and elsewhere in this document, certain provisions in Athens
Bancshares Corporation&#146;s charter and bylaws may have anti-takeover effects. In addition,
provisions in Athens Federal Community Bank&#146;s federal stock charter and bylaws may also have
anti-takeover effects. Finally, Tennessee corporate law and regulatory restrictions may make it
difficult for persons or companies to acquire control of either Athens Bancshares Corporation or
Athens Federal Community Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions in Athens Bancshares Corporation&#146;s Charter and Bylaws</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation&#146;s charter and bylaws contain provisions that could make more
difficult an acquisition of Athens Bancshares Corporation by means of a tender offer, proxy contest
or otherwise. Some provisions will also render the removal of the incumbent board of directors or
management of Athens Bancshares Corporation more difficult. These provisions may have the effect
of deterring a future takeover attempt that is not approved by the directors of Athens Bancshares
Corporation, but which Athens Bancshares Corporation shareholders may deem to be in their best
interests or in which shareholders may receive a substantial premium for their shares over then
current market prices. As a result, shareholders who might desire to participate in such a
transaction may not have the opportunity to do so. The following description of these provisions
is only a summary and does not provide all of the information contained in Athens Bancshares
Corporation&#146;s charter and bylaws. See <I>&#147;Where You Can Find More Information&#148; </I>for information on
where to obtain a copy of these documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Business Combinations with Interested Shareholders. </I></B>The charter requires the approval of the
holders of at least 80% of Athens Bancshares Corporation&#146;s outstanding shares of voting stock
entitled to vote to approve certain &#147;business combinations&#148; with an &#147;interested shareholder.&#148; This
supermajority voting requirement will not apply in cases where the proposed transaction has been
approved by a majority of those members of Athens Bancshares Corporation&#146;s board of directors who
are unaffiliated with the interested shareholder and who were directors before the time when the
interested shareholder became an interested shareholder or if the proposed transaction meets
certain conditions that are designed to afford the shareholders a fair price in consideration for
their shares. In each such case, where shareholder approval is required, the approval of only a
majority of the outstanding shares of voting stock is sufficient.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Athens Bancshares Corporation&#146;s charter, the term &#147;interested shareholder&#148; includes any
individual, group acting in concert, corporation, partnership, association or other entity (other
than Athens Bancshares Corporation or its subsidiary) who or which (i)&nbsp;is the beneficial owner,
directly or indirectly, of 10% or more of the outstanding shares of voting stock of Athens
Bancshares Corporation; (ii)&nbsp;is an affiliate of Athens Bancshares Corporation and at any time
within the two-year period immediately before the date in question was the beneficial owner,
directly or indirectly, of 10% or more of the outstanding shares of voting stock of Athens
Bancshares Corporation; or (iii)&nbsp;is an assignee of or has otherwise succeeded to any shares of the
outstanding shares of voting stock of Athens Bancshares Corporation which were at any time within
the two-year period immediately before the date in question beneficially owned by any interested
shareholder, if such assignment or succession shall have occurred in the ordinary course of a
transaction or series of transactions not involving a public offering within the meanings of the
Securities Act of 1933, as amended.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->115<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#147;business combination&#148; includes, but is not limited to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any merger or consolidation of Athens Bancshares Corporation or any of its
subsidiaries with (i)&nbsp;any interested shareholder or (ii)&nbsp;any corporation (whether or
not itself is an interested shareholder) which is, or after such merger or
consolidation would be, an affiliate of an interested shareholder;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or
with any interested shareholder, or affiliate of an interested shareholder, of 25% or
more of the assets of Athens Bancshares Corporation or combined assets of Athens
Bancshares Corporation and its subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the issuance or transfer by Athens Bancshares Corporation or any of its subsidiaries
of any securities of Athens Bancshares Corporation or any of its subsidiaries to any
interested shareholder or any affiliate of any interested shareholder in exchange for
cash, securities or other property having an aggregate fair market value equaling or
exceeding 25% of the combined fair market value of the outstanding common stock of
Athens Bancshares Corporation, except for any issuance or transfer pursuant to an
employee benefit plan of Athens Bancshares Corporation or any of its subsidiaries;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the adoption of any plan for the liquidation or dissolution of Athens Bancshares
Corporation proposed by or on behalf of any interested shareholder or any affiliate or
associate of such interested shareholder; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any reclassification of securities, or recapitalization for Athens Bancshares
Corporation, or any merger or consolidation of Athens Bancshares Corporation with any
of its subsidiaries or any other transaction (whether or not into or otherwise
involving an interested shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class of equity or
convertible securities of Athens Bancshares Corporation or any of its subsidiaries
which is directly or indirectly owned by any interested shareholder or any affiliate of
any interested shareholder.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Limitation on Voting Rights. </I></B>The charter of Athens Bancshares Corporation provides that in no
event shall any person, who directly or indirectly beneficially owns in excess of 10% of the
then-outstanding shares of common stock as of the record date for the determination of shareholders
entitled or permitted to vote on any matter (the &#147;10% limit&#148;), be entitled or permitted to any vote
in respect of the shares held in excess of the 10% limit. Beneficial ownership is determined
pursuant to the federal securities laws and includes, but is not limited to, shares as to which any
person and his or her affiliates (1)&nbsp;have the right to acquire upon the exercise of conversion
rights, exchange rights, warrants or options and (2)&nbsp;have or share investment or voting power, but
shall not be deemed the beneficial owner of any voting shares solely by reason of a revocable proxy
granted for a particular meeting of shareholders, and that are not otherwise beneficially, or
deemed by Athens Bancshares Corporation to be beneficially, owned by such person and his or her
affiliates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing restriction does not apply to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any underwriter or member of an underwriting or selling group involving a public
sale or resale of securities of Athens Bancshares Corporation or any subsidiary;
provided, however, that upon completion of the sale of such securities, no such
underwriter or member of such selling group is a beneficial owner of more than 10% of
any class of equity security of Athens Bancshares Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any proxy granted to one or more disinterested directors by a shareholder of Athens
Bancshares Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any employee benefit plans of Athens Bancshares Corporation or any subsidiary; and</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->116<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any transaction approved in advance by a majority of such disinterested directors.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Evaluation of Offers. </I></B>The charter of Athens Bancshares Corporation provides that its board of
directors, when evaluating a transaction that would or may involve a change in control of Athens
Bancshares Corporation (including a tender or exchange offer, merger or consolidation or sale of
all or substantially all of the assets of Athens Bancshares Corporation), may, in connection with
the exercise of its judgment in determining what is in the best interest of Athens Bancshares
Corporation and its shareholders, give consideration to the following factors:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the social and economic effects of the transaction on Athens Bancshares Corporation,
its subsidiaries, employees, depositors, loan and other customers and creditors and the
other elements of the communities in which Athens Bancshares Corporation and its
subsidiaries operate or are located;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the business and financial condition and earnings prospects of the acquiring person
or entity, including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the acquisition
and other likely financial obligations of the acquiring person or entity, and the
possible effect of such conditions upon Athens Bancshares Corporation and its
subsidiaries and the other elements of the communities in which Athens Bancshares
Corporation and its subsidiaries operate or are located; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the competence, experience and integrity of the acquiring person or entity and its
or their management.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By having these standards in the charter of Athens Bancshares Corporation, the board of
directors may be in a stronger position to oppose such a transaction if the Board concludes that
the transaction would not be in the best interest of Athens Bancshares Corporation, even if the
price offered is significantly greater than the then market price of any equity security of Athens
Bancshares Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Board of Directors. </I></B>The charter and bylaws of Athens Bancshares Corporation require the board
of directors to be divided into three classes as nearly equal in number as possible and that the
members of each class be elected for a term of three years and until their successors are elected
and qualified, with one class being elected annually. Any vacancy occurring in the board of
directors, however caused, may be filled by an affirmative vote of the majority of the directors
then in office, whether or not a quorum is present, and any director so chosen shall hold office
only until the next annual meeting of shareholders at which directors are elected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The bylaws of Athens Bancshares Corporation provide that to be eligible for election,
re-election or appointment to the board of directors a person must:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>be no older than 70&nbsp;years of age;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>be the beneficial owner of at least 100 shares of capital stock of Athens
Bancshares Corporation; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>not have been: (i)&nbsp;under indictment for, or have ever been convicted of, a
criminal offense involving dishonesty or breach of trust and for which the penalty for
such offense could be imprisonment for more than one year; (ii)&nbsp;a person who a banking
agency has issued a cease and desist order for conduct involving dishonesty or breach
of trust and that order is final and not subject to appeal; or (iii)&nbsp;found by either a
regulatory agency whose decision is final and not subject to appeal or by a court to
have (a)&nbsp;breached a fiduciary duty involving personal profit or (b)&nbsp;committed a willful
violation of any law, rule or regulation governing banking, securities, commodities or
insurance, or any final cease and desist order issued by a banking, securities,
commodities or insurance regulatory agency.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->117<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These provisions may prevent shareholders from nominating themselves or persons of their
choosing for election to the board of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The charter of Athens Bancshares Corporation provides that any director may be removed by
shareholders only for cause upon the affirmative vote of the holders of not less than 80% of the
outstanding voting shares. The higher vote threshold will make it more difficult for shareholders
to remove directors and replace them with their own nominees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Special Meetings of Shareholders. </I></B>The charter of Athens Bancshares Corporation contains a
provision pursuant to which special meetings of the shareholders of Athens Bancshares Corporation
may only be called by the board of directors pursuant to a resolution adopted by a majority of the
total number of directors which Athens Bancshares Corporation would have if there were no vacancies
on the board of directors or the holders of not less than a majority of the capital stock of Athens
Bancshares Corporation entitled to vote at a meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Advance Notice Provisions for Shareholder Nominations and Proposals</I></B>. Athens Bancshares
Corporation&#146;s bylaws establish an advance notice procedure for shareholders to nominate directors
or bring other business before an annual meeting of shareholders of Athens Bancshares Corporation.
A person may not be nominated for election as a director unless that person is nominated by or at
the direction of the Athens Bancshares Corporation board of directors or by a shareholder who has
given appropriate notice to Athens Bancshares Corporation before the meeting. Similarly, a
shareholder may not bring business before an annual meeting unless the shareholder has given Athens
Bancshares Corporation appropriate notice of its intention to bring that business before the
meeting. Athens Bancshares Corporation&#146;s secretary must receive notice of the nomination or
proposal not less than 90&nbsp;days before the annual meeting; provided, however, that if less than 100
days&#146; notice of prior public disclosure of the date of the meeting is given or made to the
shareholders, notice by the shareholder to be timely must be received not later than the close of
business on the 10th day following the day on which such notice of the date of the annual meeting
was mailed or such public disclosure was made. A shareholder who desires to raise new business
must provide certain information to Athens Bancshares Corporation concerning the nature of the new
business, the shareholder and the shareholder&#146;s interest in the business matter. Similarly, a
shareholder wishing to nominate any person for election as a director must provide Athens
Bancshares Corporation with certain information concerning the nominee and the proposing
shareholder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance notice of nominations or proposed business by shareholders gives Athens Bancshares
Corporation&#146;s board of directors time to consider the qualifications of the proposed nominees, the
merits of the proposals and, to the extent deemed necessary or desirable by the board of directors,
to inform shareholders and make recommendations about those matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Preferred Stock. </I></B>The charter authorizes Athens Bancshares Corporation&#146;s board of directors to
establish one or more series of preferred stock and, for any series of preferred stock, to
determine the terms and rights of the series, including voting rights, conversion rates, and
liquidation preferences. Although Athens Bancshares Corporation&#146;s board of directors has no
intention at the present time of doing so, it could issue a series of preferred stock that could,
depending on its terms, impede a merger, tender offer or other takeover attempt. Athens Bancshares
Corporation&#146;s board of directors will make any determination to issue shares with those terms based
on its judgment as to the best interests of Athens Bancshares Corporation and its shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Amendment of Governing Instruments. </I></B>The charter of Athens Bancshares Corporation generally
may be amended by the holders of a majority of the shares entitled to vote; provided, however, that
any amendment of Articles VII (Repurchase of Shares), IX (Removal of Directors), X (Elimination of
Directors&#146; Liability), XI (Indemnification), XII (Limitations on Voting Common Stock), XIII
(Approval of Business Combinations), XIV (Evaluations of Business Combinations), XV (Special
Meeting of Shareholders), XVII (Amendment of Bylaws) and XVIII (Amendment of Charter) of the
charter must be approved by the affirmative vote of the holders of at least 80% of the outstanding
shares entitled to vote, except that the board of directors may amend the articles of incorporation
without any action by the shareholders to increase or decrease the aggregate number of shares of
capital stock. The bylaws of Athens Bancshares Corporation may be amended by the majority vote of
the board of directors or by the affirmative vote of the holders of at least 80% of the outstanding
shares of Athens Bancshares Corporation capital stock entitled to vote.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->118<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions in Tennessee Corporate Law</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tennessee law contains certain provisions, described below, which may be applicable to Athens
Bancshares Corporation upon consummation of the conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Control Share Acquisitions. </I></B>The Tennessee Control Share Acquisition Act provides that
&#147;control shares&#148; of a Tennessee corporation, with 100 or more shareholders and its principal place
of business in Tennessee and more than 10% of its shareholders or 10% of its shares held by
Tennessee residents, acquired in a &#147;control share acquisition&#148; have no voting rights unless
approved by a vote of a majority of the votes entitled to be cast on the matter, excluding shares
owned by the acquirers or by the corporation&#146;s officers or directors who are employees of the
corporation. Control shares are shares of voting stock which, if aggregated with all other shares
of stock previously acquired, would entitle the acquirers to exercise voting power in electing
directors within one of the following ranges of voting power:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>one-fifth (1/5) or more but less than one-third (1/3) of all voting power;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>one-third (1/3) or more but less than a majority of all voting power; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a majority or more of all voting power.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Control shares do not include shares of stock an acquiring person is entitled to vote as a
result of having previously obtained shareholder approval. A control share acquisition generally
means the acquisition of, ownership of or the power to direct the exercise of voting power with
respect to, control shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A person who has made or proposes to make a &#147;control share acquisition,&#148; under specified
conditions, including an undertaking to pay expenses, may require the board of directors to call a
special shareholders&#146; meeting to consider the voting rights of the shares. The meeting must be
held within 50&nbsp;days of the demand. If no request for a meeting is made, the corporation may itself
present the question at any shareholders&#146; meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If voting rights are not approved at the meeting or if the acquiring person does not deliver
an acquiring person statement as permitted by the statute, the corporation generally may redeem
all, but not less than all, of the control shares, except those for which voting rights have
previously been approved. This redemption of shares must be for fair value, determined without
regard to the absence of voting rights as of the date of the last control share acquisition or of
any shareholders&#146; meeting at which the voting rights of the shares are considered and not approved.
If voting rights for &#147;control shares&#148; are approved at a shareholders&#146; meeting and the acquirer
becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may
exercise appraisal rights. The fair value of the stock determined for purposes of appraisal rights
may not be less than the value of the shares on the date of any shareholders&#146; meeting at which the
voting rights of the shares are considered and not approved. The limitations and restrictions
otherwise applicable to the exercise of dissenters&#146; rights do not apply in the context of a
&#147;control share acquisition.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The control share acquisition statute does not apply to stock acquired in a merger,
consolidation or share exchange if the corporation is a party to the transaction, or to
acquisitions previously approved or exempted by a provision in the articles of incorporation or
bylaws of the corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Business Combination Act. </I></B>The Tennessee Business Combination Act generally prohibits a
&#147;business combination&#148; (defined to include mergers, share exchanges, sales, leases or pledges of
10% of assets, issuance of securities and similar transactions) of a &#147;resident domestic
corporation&#148; or a subsidiary with an &#147;Interested Shareholder&#148; (generally defined as any person or
entity which beneficially owns 10% or more of the voting power of any class or series of the
corporation&#146;s stock then outstanding) for a period of five years after the date the person becomes
an Interested Shareholder unless, before that date, the board of directors of the resident domestic
corporation approved either the business combination or the transaction which resulted in the
shareholder becoming an Interested Shareholder and the business combination satisfies any other
applicable requirements imposed by law or by the corporation&#146;s charter or bylaws. After five
years, the Interested Shareholder may only engage in a business combination if it is approved by
two-thirds of the outstanding voting stock not beneficially owned by the Interested Shareholder or
the business combination satisfies certain fair price criteria. The Business Combination Act also
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->119<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">limits the extent to which a &#147;resident domestic corporation&#148; which has a class of voting stock
traded on any national securities exchange or registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 or any of its officers or directors may be held liable for
resisting any business combination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Tennessee Business Combination Act, the term &#147;resident domestic
corporation&#148; is defined as an issuer of voting stock which, as of the acquisition date in question,
is organized under the laws of Tennessee and meets two or more of the following requirements: (i)
the corporation has more than 10,000 or 10% of its shareholders resident in Tennessee or more than
10% of its shares held by shareholders who are Tennessee residents; (ii)&nbsp;the corporation has its
principal office or place of business located in Tennessee; (iii)&nbsp;the corporation has the principal
office or place of business of a significant subsidiary, representing not less than 25% of the
corporation consolidated net sales located in Tennessee; (iv)&nbsp;the corporation employs more than 250
individuals in Tennessee or has a combined annual payroll paid to Tennessee residents which is in
excess of $5.0&nbsp;million; (v)&nbsp;the corporation produces goods and services in Tennessee which result
in annual gross receipts in excess of $10.0&nbsp;million; or (vi)&nbsp;the corporation has physical assets
and/or deposits, including those of any subsidiary located within Tennessee which exceed $10.0
million in value. Athens Bancshares Corporation has elected not to be governed by the Tennessee
Business Combination Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Anti-Greenmail Statute. </I></B>The Tennessee Greenmail Act prohibits a Tennessee corporation having
a class of voting stock registered or traded on a national securities exchange or registered under
Section 12(g) of the Securities Exchange Act of 1934 from purchasing, directly or indirectly, any
of its shares at a price above the market value of that shares from any person who holds more than
3% of the class of securities to be purchased if that person has held such shares for less than two
years, unless: (i)&nbsp;the purchase has been approved by the affirmative vote of a majority of the
outstanding shares of each class of voting stock issued by the corporation; or (ii)&nbsp;the corporation
makes an offer, at least equal value per share, to all holders of shares of such class. Any person
who sells securities to a corporation in violation of the Tennessee Greenmail Act will be liable to
the corporation for an amount equal to two times the amount by which the purchase price exceeds the
amount permitted by the statute. For purposes of the Tennessee Greenmail Act, market value is
defined as the average of the highest and lowest closing market price of such shares during the 30
trading days preceding the purchase or preceding the commencement or announcement of a tender offer
if the seller of such shares has commenced a tender offer or announced an intention to seek control
of the corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the common stock of Athens Bancshares Corporation will be traded on a national
securities exchange, the Athens Bancshares Corporation will be subject to the restrictions of the
Tennessee Greenmail Act after the completion of the stock offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Investor Protection Act. </I></B>The Tennessee Investor Protection Act prohibits any party owning,
directly or indirectly, 5% or more of any class of equity securities of an &#147;offeree company,&#148; any
of which were purchased within one year before the proposed takeover offer from making a tender
offer that would result in their becoming the beneficial owner of more than 10% of the offeree
company&#146;s outstanding equity securities, unless the offeror: (i)&nbsp;before making such purchase, had
made a public announcement of his intention to change or influence the management or control of the
&#147;offeree company&#148;; (ii)&nbsp;has made a full, fair and effective disclosure of his intention to the
persons from whom he acquired such securities; and (iii)&nbsp;has filed with the Tennessee Commissioner
of Commerce and Insurance and with the &#147;offeree company&#148; a statement signifying such intentions and
containing such additional information as a Commissioner may require. For purposes of the Investor
Protection Act, an &#147;offeree company&#148; is defined as a corporation or other issuer of equity
securities which is incorporated or organized under the laws of Tennessee or has its principal
office in Tennessee, has substantial assets located in Tennessee and which is or may be involved in
a takeover offer relating to any class of its equity securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor Protection Act also prohibits any offeror from making a takeover offer which is
not made to the holders of record or beneficial owners of the equity securities of an offeree
company who reside in Tennessee on substantially the same terms as the offer is made to holders
residing elsewhere. The Investor Protection Act also imposes certain other restrictions on
takeover offers involving offeree companies. Athens Bancshares Corporation is a Tennessee
corporation and will have its principal office and substantial assets located in Tennessee.
Accordingly, Athens Bancshares Corporation would be an offeree company entitled to the protections
of the Tennessee Investor Protection Act if it becomes involved in a takeover offer relating to a
class of its equity securities.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->120<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions in Athens Federal Community Bank&#146;s Federal Stock Charter and Bylaws</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the board of directors of Athens Federal Community Bank is not aware of any effort
that might be made to obtain control of Athens Federal Community Bank after its conversion to the
stock form of ownership, the board of directors believes it is appropriate to adopt certain
provisions permitted by federal regulations that may have the effect of deterring a future takeover
attempt that is not approved by Athens Federal Community Bank&#146;s board of directors. The following
description of these provisions is only a summary and does not provide all of the information
contained in Athens Federal Community Bank&#146;s proposed federal stock charter and bylaws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Beneficial Ownership Limitation. </I></B>Athens Federal Community Bank&#146;s charter provides that, for a
period of five years from the date of the conversion, no person, other than Athens Bancshares
Corporation, may acquire directly or indirectly the beneficial ownership of more than 10% of any
class of any equity security of Athens Federal Community Bank. If a person acquires shares in
violation of this provision, all shares beneficially owned by such person in excess of 10% will be
considered &#147;excess shares&#148; and will not be counted as shares entitled to vote or counted as voting
shares in connection with any matters submitted to the shareholders for a vote.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Board of Directors.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Classified Board. </I>Athens Federal Community Bank&#146;s board of directors is divided into three
classes as nearly as equal in number as possible. The shareholders elect one class of directors
each year for a term of three years. The classified board makes it more difficult and time
consuming for a shareholder group to fully use its voting power to gain control of the board of
directors without the consent of the incumbent board of directors of Athens Federal Community Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Filling of Vacancies; Removal. </I>The bylaws provide that any vacancy occurring in the board of
directors, including a vacancy created by an increase in the number of directors, may be filled by
a vote of a majority of the remaining directors although less than a quorum of the board of
directors then in office. A person elected to fill a vacancy on the board of directors will serve
until the next election of directors by the shareholders. Athens Federal Community Bank&#146;s bylaws
provide that a director may be removed from the board of directors before the expiration of his or
her term only for cause and only upon the vote of the holders of at least 80% of the outstanding
shares of voting stock. These provisions make it more difficult for shareholders to remove
directors and replace them with their own nominees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Elimination of Cumulative Voting. </I>The charter of Athens Federal Community Bank does not
provide for cumulative voting with respect to the election of directors. The elimination of
cumulative voting makes it more difficult for a shareholder group to elect a director nominee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Authorized but Unissued Shares of Capital Stock. </I></B>Following the conversion, Athens Federal
Community Bank will have authorized but unissued shares of common and preferred stock. Athens
Federal Community Bank&#146;s charter authorizes the board of directors to establish one or more series
of preferred stock and, for any series of preferred stock, to determine the terms and rights of the
series, including voting rights, conversion rates, and liquidation preferences. Such shares of
common and preferred stock could be issued by the board of directors to render more difficult or to
discourage an attempt to obtain control of Athens Federal Community Bank by means of a merger,
tender offer, proxy contest or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Regulatory Restrictions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Office of Thrift Supervision Regulations. </I></B>Regulations of the Office of Thrift Supervision
provide that, for a period of three years following the date of the completion of the conversion,
no person, acting singly or together with associates in a group of persons acting in concert, will
directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any
class of any equity security of Athens Bancshares Corporation without the prior written approval of
the Office of Thrift Supervision. Where any person, directly or indirectly, acquires beneficial
ownership of more than 10% of any class of any equity security of Athens Bancshares Corporation
without the prior written approval of the Office of Thrift Supervision, the securities beneficially
owned by such person in excess of 10% will not be voted by any person or counted as voting shares
in connection with any
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->121<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">matter submitted to the shareholders for a vote, and will not be counted as outstanding for
purposes of determining the affirmative vote necessary to approve any matter submitted to the
shareholders for a vote.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Change in Bank Control Act. </I></B>The acquisition of 10% or more of the common stock outstanding
may trigger the provisions of the Change in Bank Control Act, a federal law. The Office of Thrift
Supervision has also adopted a regulation under the Change in Bank Control Act which generally
requires persons who at any time intend to acquire control of a federally chartered savings
association, including a converted savings and loan association such as Athens Federal Community
Bank, to provide 60&nbsp;days prior written notice and certain financial and other information to the
Office of Thrift Supervision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 60-day notice period does not commence until the information is deemed to be substantially
complete. Control for the purpose of this Act exists in situations in which the acquiring party
has voting control of at least 25% of any class of Athens Bancshares Corporation&#146;s voting stock or
the power to direct the management or policies of Athens Bancshares Corporation. However, under
Office of Thrift Supervision regulations, &#147;control&#148; is presumed to exist where the acquiring party
has voting control of at least 10% of any class of Athens Bancshares Corporation&#146;s voting
securities if specified &#147;control factors&#148; are present. The statute and underlying regulations
authorize the Office of Thrift Supervision to disapprove a proposed acquisition on certain
specified grounds.
</DIV>
<DIV align="left">
<A name="149"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Description of Athens Bancshares Corporation Capital Stock</B>
</DIV>

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">



<DIV align="center" style="font-size: 10pt; margin-top: 6pt">The common stock of Athens Bancshares Corporation will represent
nonwithdrawable capital, will not be an account of any type, and will not be
insured by the Federal Deposit Insurance Corporation or any other government
agency.
</DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation is authorized to issue fifty million (50,000,000) shares of
common stock having a par value of $0.01 per share and ten million (10,000,000) shares of preferred
stock having a par value of $0.01 per share. Each share of Athens Bancshares Corporation&#146;s common
stock will have the same relative rights as, and will be identical in all respects with, each other
share of common stock. Upon payment of the purchase price for the common stock, as required by the
plan of conversion, all stock will be duly authorized, fully paid and nonassessable. Athens
Bancshares Corporation will not issue any shares of preferred stock in the conversion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Dividends. </I></B>Athens Bancshares Corporation can pay dividends on its common stock if, after
giving effect to the distribution, it would be able to pay its indebtedness as the indebtedness
comes due in the usual course of business and its total assets exceed the sum of its liabilities
and the amount needed, if Athens Bancshares Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock
who have a preference upon dissolution. The holders of common stock of Athens Bancshares
Corporation will be entitled to receive and share equally in dividends as may be declared by the
board of directors of Athens Bancshares Corporation out of funds legally available for dividends.
If Athens Bancshares Corporation issues preferred stock, the holders of the preferred stock may
have a priority over the holders of the common stock with respect to dividends. See &#147;<I>Our Dividend
Policy&#148; </I>and <I>&#147;Regulation and Supervision.&#148;</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Voting Rights. </I></B>After the conversion, the holders of common stock of Athens Bancshares
Corporation will possess exclusive voting rights in Athens Bancshares Corporation. They will elect
Athens Bancshares Corporation&#146;s board of directors and act on other matters as are required to be
presented to them under Tennessee law or as are otherwise presented to them by the board of
directors. Except as discussed under <I>&#147;Restrictions on the Acquisition of Athens Bancshares
Corporation and Athens Federal Community Bank&#151;Restrictions in Athens Bancshares Corporation&#146;s
Charter and Bylaws&#151;Limitations on Voting Rights,&#148; </I>each holder of common stock will be entitled to
one vote per share and will not have any right to cumulate votes in the election of directors. If
Athens Bancshares Corporation issues preferred stock, holders of Athens Bancshares Corporation
preferred stock may also possess voting rights.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->122<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Liquidation. </I></B>If there is any liquidation, dissolution or winding up of Athens Federal
Community Bank, Athens Bancshares Corporation, as the sole holder of Athens Federal Community
Bank&#146;s capital stock, would be entitled to receive all of Athens Federal Community Bank&#146;s assets
available for distribution after payment or provision for payment of all debts and liabilities of
Athens Federal Community Bank, including all deposit accounts and accrued interest. Upon
liquidation, dissolution or winding up of Athens Bancshares Corporation, the holders of its common
stock would be entitled to receive all of the assets of Athens Bancshares Corporation available for
distribution after payment or provision for payment of all its debts and liabilities. If Athens
Bancshares Corporation issues preferred stock, the preferred stock holders may have a priority over
the holders of the common stock upon liquidation or dissolution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Preemptive Rights; Redemption. </I></B>Holders of the common stock of Athens Bancshares Corporation
will not be entitled to preemptive rights with respect to any shares that may be issued. The
common stock cannot be redeemed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Preferred Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Bancshares Corporation will not issue any preferred stock in the conversion and it has
no current plans to issue any preferred stock after the conversion. Preferred stock may be issued
with designations, powers, preferences and rights as the board of directors may from time to time
determine. The board of directors can, without shareholder approval, issue preferred stock with
voting, dividend, liquidation and conversion rights that could dilute the voting strength of the
holders of the common stock and may assist management in impeding an unfriendly takeover or
attempted change in control.
</DIV>
<DIV align="left">
<A name="150"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Transfer Agent and Registrar</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our common stock will be
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>
<DIV align="left">
<A name="151"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Registration Requirements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have registered our common stock with the Securities and Exchange Commission under Section
12(b) of the Securities Exchange Act of 1934, as amended, and will not deregister our common stock
for a period of at least three years following the offering. As a result of registration, the
proxy and tender offer rules, insider trading reporting and restrictions, annual and periodic
reporting and other requirements of that statute will apply.
</DIV>
<DIV align="left">
<A name="152"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Legal and Tax Opinions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The legality of our common stock has been passed upon for us by Kilpatrick Stockton LLP,
Washington, D.C. The federal tax consequences of the conversion have been opined upon by
Kilpatrick Stockton LLP and the state tax consequences of the conversion have been opined upon by
Hazlett, Lewis &#038; Bieter, PLLC. Kilpatrick Stockton LLP and Hazlett, Lewis &#038; Bieter, PLLC have
consented to the references to its opinions in this prospectus. Certain legal matters will be
passed upon for Keefe, Bruyette &#038; Woods, Inc. by Silver, Freedman &#038; Taff, L.L.P., Washington, D.C.
</DIV>
<DIV align="left">
<A name="153"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Experts</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of Athens Federal Community Bank as of December&nbsp;31, 2008
and 2007, and for each of the years in the two year period ended December&nbsp;31, 2008 included in this
prospectus and in the registration statement have been audited by Hazlett, Lewis &#038; Bieter, PLLC, an
independent registered public accounting firm, as stated in its report appearing herein and
elsewhere in the registration statement (which report expresses an unqualified opinion), and has
been so included in reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->123<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Keller &#038; Company, Inc. has consented to the summary in this prospectus of its report to us
setting forth its opinion as to our estimated pro forma market value and to the use of its name and
statements with respect to it appearing in this prospectus.
</DIV>
<DIV align="left">
<A name="154"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Where You Can Find More Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended, that registers the common stock offered in the stock offering,
including the shares to be issued to the charitable foundation. This prospectus forms a part of
the registration statement. The registration statement, including the exhibits, contains
additional relevant information about us and our common stock. The rules and regulations of the
Securities and Exchange Commission allow us to omit certain information included in the
registration statement from this prospectus. You may read and copy the registration statement at
the Securities and Exchange Commission&#146;s public reference room at 100 F Street, N.E., Room&nbsp;1580,
Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the Securities and Exchange Commission&#146;s public reference rooms. The
registration statement also is available to the public from commercial document retrieval services
and at the Internet World Wide Website maintained by the Securities and Exchange Commission at
http://www.sec.gov.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Athens Federal Community Bank has filed an application for approval of the plan of conversion
with the Office of Thrift Supervision. This prospectus omits certain information contained in the
application. The application may be inspected, without charge, at the offices of the Office of
Thrift Supervision, 1700 G Street, NW, Washington, D.C. 20552 and at the offices of the Regional
Director of the Office of Thrift Supervision at the Southeast Regional Office of the Office of
Thrift Supervision, 1475 Peachtree Street, N.E., Atlanta, Georgia 30309.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the plan of conversion and Athens Bancshares Corporation&#146;s charter and bylaws are
available without charge from Athens Federal Community Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The appraisal report of Keller &#038; Company, Inc. has been filed as an exhibit to our
registration statement and to our application to the Office of Thrift Supervision. Portions of the
appraisal report were filed electronically with the Securities and Exchange Commission and are
available on its website as described above. The entire appraisal report is available at the
public reference room of the Securities and Exchange Commission and the offices of the Office of
Thrift Supervision as described above.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->124<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="155"></A>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Index to Consolidated Financial Statements<BR>
of Athens Federal Community Bank</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="93%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD >&nbsp;</TD></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#300">Report of Independent Registered Public Accounting Firm</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-l</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#301">Consolidated Balance Sheets as of June&nbsp;30, 2009 (unaudited)&nbsp;and December&nbsp;31, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#302">Consolidated Statements of Income for the Six Months Ended
June&nbsp;30, 2009 and 2008 (unaudited)&nbsp;and the Years Ended December&nbsp;31, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#303">Consolidated Statements of Changes in Equity for the Six Months Ended
June&nbsp;30, 2009 (unaudited)&nbsp;and the Years Ended December&nbsp;31, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#304">Consolidated Statements of Cash Flows for the Six Months Ended
June&nbsp;30, 2009 and 2008 (unaudited)&nbsp;and the Years Ended December&nbsp;31, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#305">Notes to Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-6</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">****
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All schedules are omitted as the required information either is not applicable or is included
in the financial statements or related notes. Separate financial statements for Athens Bancshares
Corporation have not been included in this prospectus because Athens Bancshares Corporation, which
has engaged only in organizational activities to date, has no significant assets, contingent or
other liabilities, revenues or expenses.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->125<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="300"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Report of Independent Registered Public Accounting Firm</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors<BR>
Athens Federal Community Bank<BR>
Athens, Tennessee

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have audited the accompanying consolidated balance sheets of Athens Federal Community Bank
and subsidiaries (Bank) as of December&nbsp;31, 2008 and 2007, and the related consolidated statements
of income, changes in equity and cash flows for the years then ended. These financial statements
are the responsibility of the Bank&#146;s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Athens Federal Community Bank and subsidiaries as of
December&nbsp;31, 2008 and 2007, and the results of their operations and their cash flows for the years
then ended in conformity with U.S. generally accepted accounting principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>/s/ HAZLETT, LEWIS &#038; BIETER, PLLC</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Chattanooga, Tennessee<BR>
September&nbsp;11, 2009

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="301"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
CONSOLIDATED BALANCE SHEETS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><B>ASSETS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and due from banks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,811,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,547,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,284,410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal funds sold</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,950,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,761,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,547,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,284,410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest-bearing deposits in banks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">981,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,881,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities available for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,621,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,509,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,966,937</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities held to maturity (fair value approximates $1,624,
$4,961 and $14,517 at June&nbsp;30, 2009 (unaudited), December&nbsp;31,
2008 and December&nbsp;31, 2007, respectively)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,449</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments, at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,898,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,898,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,746,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loans, net of allowance for loan losses of $2,757,596, $3,082,602
and $2,536,097 at June&nbsp;30, 2009 (unaudited), December&nbsp;31,
2008 and December&nbsp;31, 2007, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192,217,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196,519,657</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,603,012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Premises and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,090,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,343,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,864,638</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued interest receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,023,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,150,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,245,724</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash surrender value of bank owned life insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,353,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,245,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,020,203</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Foreclosed real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">252,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230,491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,809,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,669,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,759,167</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">243,010,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">251,000,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">230,504,540</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><B>LIABILITIES AND EQUITY</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LIABILITIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deposits:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Noninterest-bearing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,963,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,288,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,807,180</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest-bearing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,956,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">199,204,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">189,536,909</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202,920,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206,493,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197,344,089</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued interest payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">418,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">454,450</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities sold under agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">971,737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">911,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,150,972</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,377,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,310,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,532,273</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued expenses and other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,062,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,654,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,752,239</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,679,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">226,788,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">207,234,023</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>COMMITMENTS AND CONTINGENCIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,039</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,237,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,153,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,277,556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,331,007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,211,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,270,517</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total liabilities and equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">243,010,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">251,000,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">230,504,540</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying notes are an integral part of these consolidated financial statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="302"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
CONSOLIDATED STATEMENTS OF INCOME</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Six Months Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Years Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Interest and dividend income:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans, including fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,799,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,946,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,824,469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,421,048</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">153,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">203,746</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities and interest-bearing deposits in other banks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">638,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">811,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,602,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,832,581</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,511,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,836,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,580,409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,457,375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Interest expense:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,517,454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,744,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,609,086</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal funds purchased and securities sold under
agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,254</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">366,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">455,695</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,003,288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,675,295</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,133,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,101,035</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,507,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,160,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,447,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,356,340</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Provision for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">287,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">760,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442,895</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net interest income after provision for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,390,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,873,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,686,598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,913,445</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Noninterest income:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Customer service fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">810,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">766,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,621,943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,329,843</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other charges and fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">963,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">986,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,775,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,087,814</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment sales commissions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">173,098</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">279,721</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Increase in cash surrender value of life insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,457</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">256,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">223,649</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other noninterest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">131,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,756</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total noninterest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,488,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,183,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,160,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,029,783</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Noninterest expenses:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Salaries and employee benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,914,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,140,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,638,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,818,740</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Occupancy and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">737,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">798,392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,613,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,625,824</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal deposit insurance premiums</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">268,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,951</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Data processing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">408,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">742,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">657,433</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Advertising</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,724</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">227,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">331,698</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,094,018</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">952,798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,946,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,976,834</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total noninterest expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,389,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,441,619</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,250,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,431,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Income before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,489,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">615,928</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,596,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,511,748</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">405,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">152,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">391,802</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,083,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">462,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,109,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,119,946</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying notes are an integral part of these consolidated financial statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="303"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY<BR>
Six Months Ended June&nbsp;30, 2009 (Unaudited) and Years Ended December&nbsp;31, 2008 and 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Accumulated</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Comprehensive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Retained</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Comprehensive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Income</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Earnings</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Income</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, December&nbsp;31, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,157,610</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(278,230</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,879,380</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comprehensive income:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,119,946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,119,946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,119,946</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other comprehensive income, net of tax:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Change in unrealized gains (losses)&nbsp;on securities
available for sale, net of tax effect of $166,214</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">271,191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">271,191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">271,191</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,391,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, December&nbsp;31, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,277,556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,039</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,270,517</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cumulative effect of change in accounting principle</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(233,120</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(233,120</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comprehensive income:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,109,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,109,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,109,407</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other comprehensive income, net of tax:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Change in unrealized gains (losses)&nbsp;on securities
available for sale, net of tax effect of $39,890</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,093</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,174,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,153,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,211,897</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comprehensive income:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,083,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,083,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,083,629</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other comprehensive income, net of tax:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Change in unrealized gains (losses)&nbsp;on securities
available for sale, net of tax effect of $21,752</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,481</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,119,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, June&nbsp;30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,237,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">93,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,331,007</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying notes are an integral part of these consolidated financial statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="304"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
CONSOLIDATED STATEMENTS OF CASH FLOWS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Six Months Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Years Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH FLOWS FROM OPERATING ACTIVITIES:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,083,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">462,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,109,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,119,946</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net income to
net cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">325,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">374,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">763,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">837,351</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Amortization of securities and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">255,855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">222,829</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Provision for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">287,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">760,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442,895</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other gains and losses, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,296</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,644</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Federal Home Loan Bank stock dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(74,300</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(112,800</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net change in:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Cash surrender value of life insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(108,079</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(109,716</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(225,587</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(214,756</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Loans held for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(65,709</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(242,682</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(83,011</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(162,085</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Accrued interest receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(291,520</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Accrued interest payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71,049</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(39,178</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36,269</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133,989</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Other assets and liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">186,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(56,912</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(398,753</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">242,918</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:75px; text-indent:-15px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,709,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">770,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,118,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,334,211</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH FLOWS FROM INVESTING ACTIVITIES:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net change in interest-bearing deposits in banks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,980,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,881,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities available for sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(14,674,963</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16,687,862</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8,677,971</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Maturities, prepayments and calls</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,907,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,718,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,941,411</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,524,949</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities held to maturity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Principal repayments received</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,486</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,438</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loan originations and principal collections, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,211,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,342,460</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18,855,847</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21,795,736</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of premises and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71,805</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(167,944</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(251,262</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(935,398</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from sales of premises and equipment
and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,868</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchase of investments, at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,600,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Redemption of investments, at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">960,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,960,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,930,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Net cash provided by (used in) investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,949,945</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17,481,969</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(26,543,845</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17,540,850</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH FLOWS FROM FINANCING ACTIVITIES:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net (decrease)&nbsp;increase in deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,573,007</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,569,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,149,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,129,864</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net increase (decrease)&nbsp;in securities sold under
agreements to repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,079</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">247,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(239,314</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(530,181</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,530,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">925,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Repayment of Federal Home Loan Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13,082,521</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,150,501</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33,752,001</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11,023,077</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Net cash (used in) provided by financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,445,449</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,565,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,687,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,501,606</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>NET INCREASE (DECREASE)&nbsp;IN CASH AND
CASH EQUIVALENTS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,213,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,145,431</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,736,932</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">294,967</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,547,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,284,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,284,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,989,443</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CASH AND CASH EQUIVALENTS, END
OF PERIOD</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,761,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,138,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,547,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,284,410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest paid on deposits and borrowed funds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,074,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,714,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,169,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,967,046</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Income taxes paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">575,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">241,274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">531,854</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">960,121</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING ACTIVITIES:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Acquisition of real estate acquired through
foreclosure</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">230,491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying notes are an integral part of these consolidated financial statements.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-5<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="305"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The accounting and reporting policies of Athens Federal Community
Bank (Bank) and subsidiaries conform with accounting principles
generally accepted in the United States of America and accepted
accounting and reporting practices within the banking industry.
The significant accounting policies are summarized as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Principles of consolidation</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The consolidated financial statements of Athens Federal Community Bank and subsidiaries
include the Bank and its wholly-owned subsidiaries: Southland Finance, Inc. (Southland)
and Ti-Serv, Inc. All material intercompany accounts and transactions have been
eliminated in consolidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Nature of operations</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank provides a variety of financial services to individuals and corporate
customers through its seven branches located in Athens, Sweetwater, Etowah,
Madisonville, and Cleveland, Tennessee. The Bank&#146;s primary deposit products include
checking, savings, certificates of deposit, and IRA accounts. Its primary lending
products are one-to-four family residential, commercial real estate, and consumer
loans. Southland is a consumer finance company with one branch located in Athens,
Tennessee. Ti-Serv, Inc. maintains the Bank&#146;s investment in Valley Title Services, LLC
and provides appraisal and title insurance services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Use of estimates</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. A
material estimate that is particularly susceptible to significant change in the near
term relates to the determination of the allowance for loan losses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Cash and cash equivalents</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">For purposes of the consolidated statements of cash flows, cash and cash equivalents
include cash and balances due from banks, money market mutual funds and federal funds
sold and securities purchased under agreements to resell, all of which mature within
ninety days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Interest-bearing deposits in banks</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits in banks have a maturity of one year or less and are carried
at cost.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Securities</I></B>

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Debt securities are classified as held to maturity when the Bank has the intent and
ability to hold the securities to maturity. Securities held to maturity are carried at
amortized cost. The amortization of premiums and accretion of discounts are recognized
in interest income using methods approximating the interest method over the period to
maturity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Debt securities not classified as held to maturity are classified as available for
sale. Securities available for sale are carried at market value with unrealized gains
and losses reported in other comprehensive income. Realized gains and losses on
securities available for sale are included in other income and, when applicable, are
reported as a reclassification adjustment, net of tax, in other comprehensive income.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Declines in the market value of held to maturity and available for sale securities
below their cost that are deemed to be other than temporary are reflected in earnings
as realized losses. In estimating other than temporary impairment losses, management
considers (1)&nbsp;the length of time and the extent to which the market value has been less
than cost, (2)&nbsp;the financial condition and near-term prospects of the issuer, and (3)
the intent and ability of the Bank to retain its investment in the issuer for a period
of time sufficient to allow for any anticipated recovery in market value. Gains and
losses on the sale of securities are recorded on the trade date and are determined
using the specific identification method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Loans</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank grants mortgage, commercial and consumer loans to customers. A substantial
portion of the loan portfolio is represented by mortgage and commercial real estate
loans located primarily in the East Tennessee area. The ability of the Bank&#146;s debtors
to honor their contracts is dependent upon the real estate and general economic
conditions in this area.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Loans that management has the intent and ability to hold for the foreseeable future or
until maturity or pay-off generally are stated at unpaid principal balances, less the
allowance for loan losses, net deferred loan organization fees and costs, and unearned
interest and fees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Loan fees, net of estimated initial direct cost relating to initiating and closing
mortgage loans, have been deferred and are being amortized into interest income over
the remaining lives of the loans as an adjustment of yield using the level yield
method.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Unearned interest on consumer finance loans is recognized as income over the terms of
the loans using a declining balance method. Interest on other loans is calculated
using the simple interest method on the principal outstanding.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Loans </I></B>(Continued)

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The accrual of interest on mortgage and commercial loans is discontinued at the time
the loan is 90&nbsp;days past due unless the credit is well-secured and in process of
collection. Other personal loans are typically charged off no later than 120&nbsp;days past
due. Past due status is based on contractual terms of the loan. In all cases, loans
are placed on nonaccrual or charged off at an earlier date if collection of principal
or interest is considered doubtful.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">All interest accrued but not collected for loans that are placed on non-accrual or
charged off is reversed against interest income. The interest on these loans is
accounted for on the cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all the principal and interest
amounts contractually due are brought current and future payments are reasonably
assured.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Allowance for loan losses</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The allowance for loan losses is established as losses are estimated to have occurred
through a provision for loan losses charged to earnings. Loan losses are charged
against the allowance when management believes the uncollectibility of a loan balance
is confirmed. Subsequent recoveries, if any, are credited to the allowance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The allowance for loan losses is evaluated on a regular basis by management and is
based upon management&#146;s periodic review of the collectibility of the loans in light of
historical experience, the nature and volume of the loan portfolio, adverse situations
that may affect the borrower&#146;s ability to repay, estimated value of any underlying
collateral, and prevailing economic conditions. This evaluation is inherently
subjective as it requires estimates that are susceptible to significant revision as
more information becomes available.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The allowance consists of specific, general and unallocated components. The specific
component relates to loans that are classified as doubtful, substandard or special
mention. For such loans that are also classified as impaired, an allowance is
established when the discounted cash flows (or collateral value or observable market
price) of the impaired loan is lower than the carrying value of that loan. The general
component covers non-classified loans and is based on historical loss experience
adjusted for qualitative factors. An unallocated component is maintained to cover
uncertainties that could affect management&#146;s estimate of probable losses. The
unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions
used in the methodologies for estimating specific and general losses in the portfolio.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Allowance for loan losses </I></B>(Continued)

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">A loan is considered impaired when, based on current information and events, it is
probable the Bank will be unable to collect the scheduled payments of principal or
interest when due according to contractual terms of the loan agreement. Factors
considered by management in determining impairment include payment status, collateral
value, and the probability of collecting scheduled principal and interest payments when
due. Loans that experience insignificant payment delays and payment shortfalls are not
classified as impaired. Management determines the significance of payment delays and
payment shortfalls on a case-by-case basis, taking into consideration all of the
circumstances surrounding the loan and the borrower, including the length of the delay,
the reasons for the delay, the borrower&#146;s prior payment record, and the amount of the
shortfall in relation to the principal and interest owed. Impairment is measured on a
loan-by-loan basis by either the present value of future cash flows discounted at the
loan&#146;s effective interest rate, the loan&#146;s obtainable market price, or the fair value
of the collateral if the loan is collateral dependent.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Large groups of smaller balance homogeneous loans are collectively evaluated for
impairment. Accordingly, the Bank does not separately identify individual consumer
loans for impairment disclosures, unless such loans are the subject of a restructuring
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Servicing</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Generally, servicing assets are recognized as separate assets when rights are acquired
through purchase or through sale of financial assets. For sales of mortgage loans, a
portion of the cost of originating the loan is allocated to the servicing right based
on relative fair value. Fair value is based on market prices for comparable mortgage
servicing contracts, when available, or alternatively, is based on a valuation model
that calculates the present value of estimated future net servicing income. The
valuation model incorporates assumptions that market participants would use in
estimating future net servicing income, such as the cost to service, the discount rate,
the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds,
and default rates and losses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank has not recorded any servicing assets or liabilities in accordance with SFAS
140 because the benefits received for servicing approximate the costs incurred by the
Bank for its servicing responsibilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Servicing fee income is recorded for fees earned for servicing loans. The fees are
based on a contractual percentage of the outstanding principal; or a fixed amount per
loan and are recorded as income when earned. The amortization of mortgage servicing rights is
netted against loan servicing fee income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Subsequent events</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Management performed an evaluation of subsequent events through September&nbsp;11, 2009, the
date these financial statements were issued.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Foreclosed real estate</I></B>

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Assets acquired through, or in lieu of, loan foreclosures are held for sale and are
initially recorded at fair value less cost to sell at the date of foreclosure,
establishing a new cost basis. Subsequent to foreclosure, valuations are periodically
performed by management and the assets are carried at the lower of carrying amount or
fair value less cost to sell. Revenue and expenses from operations and changes in the
valuation allowance are included in net expenses from foreclosed assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Premises and equipment</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Land is carried at cost. Other premises and equipment are stated at cost less
accumulated depreciation. Depreciation, computed using a combination of accelerated
and straight-line methods, is based on estimated useful lives of three to forty years.
Maintenance and repairs are expensed as incurred while major additions and improvements
are capitalized. Gains and losses on dispositions are included in current operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Investments, at cost</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Investments carried at cost include the Bank&#146;s required investment in the Federal Home
Loan Bank of Cincinnati as well as other investments that are carried at cost due to
the lack of a readily determinable market value and no established market price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Income taxes</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. Deferred tax
assets and liabilities are measured using enacted tax rates in effect for the year in
which the temporary differences are expected to be recovered or settled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Advertising costs</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Advertising costs are expensed as incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Segment reporting</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Statement of Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;131, <I>Disclosures About
Segments of an Enterprise and Related Information (&#147;SFAS 131&#148;)</I>, provides for the
identification of reportable segments on the basis of discrete business units and their
financial information to the extent such units are reviewed by an entity&#146;s chief
decision maker (which can be an individual or group of management persons). The
Statement permits aggregation or combination of segments that have similar
characteristics. In the operations of the Bank and its subsidiaries, each bank branch
is viewed by management as being a separately identifiable business or segment from the
perspective of monitoring performance and allocation of financial resources. Although
the branches
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Segment reporting </I></B>(Continued)

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">operate independently and are managed and monitored separately, each is substantially
similar in terms of business focus, type of customers, products, and services.
Further, the results of Southland and Ti-Serv, Inc. for the six months ended June&nbsp;30,
2009 and 2008, and the years ended December&nbsp;31, 2008 and 2007, were not significant for
separate disclosure. Accordingly, the Bank&#146;s consolidated financial statements reflect
the presentation of segment information on an aggregated basis in one reportable
segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Transfers of financial assets</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Transfers of financial assets are accounted for as sales, when control over the assets
has been surrendered. Control over transferred assets is deemed to be surrendered when
(1)&nbsp;the assets have been isolated from the Bank, (2)&nbsp;the transferee obtains the right
(free of conditions that constrain it from taking advantage of that right) to pledge or
exchange the transferred assets, and (3)&nbsp;the Bank does not maintain effective control
over the transferred assets through an agreement to repurchase them before their
maturity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Recent accounting pronouncements</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In March&nbsp;2006, the Financial Accounting Standards Board (&#147;FASB&#148;) issued SFAS No.&nbsp;156,
<I>Accounting for Servicing of Financial Assets</I>, (&#147;SFAS 156&#148;) an Amendment of SFAS No.
140, <I>Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities</I>, (&#147;SFAS 140&#148;) which requires that all separately recognized servicing
assets and liabilities be initially measured at fair value, if practicable, and
requires entities to elect either fair value measurement with changes in fair value
reflected in earnings or the amortization and impairment requirements of Statement 140
for subsequent measurement. SFAS 156 is effective as of the beginning of an entity&#146;s
first fiscal year that begins after September&nbsp;15, 2006. The Bank adopted SFAS 156 on
January&nbsp;1, 2007. The adoption of SFAS 156 did not have a significant impact on the
consolidated financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In September&nbsp;2006, the FASB issued SFAS No.&nbsp;157, <I>Fair Value Measurements </I>(&#147;SFAS
157&#148;). SFAS 157 defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements. SFAS 157 applies
only to fair-value measurements that are already required or permitted by other
accounting standards and is expected to increase the consistency of those
measurements. The statement emphasizes that fair value is a market-based
measurement; not an entity-specific measurement. Therefore, the fair value measurement should be determined based
on the assumptions that market participants would use in pricing the asset or
liability. The effective date for SFAS 157 was for fiscal years beginning
after November&nbsp;15, 2007, and interim periods within those fiscal years. The
Bank adopted SFAS 157 effective January&nbsp;1, 2008.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Recent accounting pronouncements </I></B>(Continued)

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In September&nbsp;2006, the FASB ratified a consensus opinion reached by the Emerging Issues Task Force
(&#147;EITF&#148;) on Issue No.&nbsp;06-04, <I>Accounting for Deferred Compensation and Postretirement Benefit Aspects of
Endorsement Split-Dollar Life Insurance Arrangements, </I>(&#147;EITF 06-04&#148;) which requires employers that enter
into endorsement split-dollar life insurance arrangements that provide an employee with a postretirement
benefit to recognize a liability for the future benefits promised based on the substantive agreement made
with the employer. Whether the accrual is based on a death benefit or on the future cost of maintaining
the insurance would depend on what the employer has effectively agreed to provide during the employee&#146;s
retirement. The purchase of an endorsement-type life insurance policy does not qualify as a settlement
of the liability. The consensus in EITF 06-4 is
effective for
fiscal years
beginning after
December&nbsp;15, 2007.
In adopting EITF
06-4, the Bank
recorded a
liability of
$233,120 as of
January&nbsp;1, 2008,
with a
corresponding
offset against
retained earnings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In February&nbsp;2007, the FASB issued SFAS No.&nbsp;159, <I>The Fair Value Option for Financial Assets and Financial
Liabilities, </I>(&#147;SFAS 159&#148;). This statement permits entities to choose to measure many financial
instruments and certain other items at fair value. The objective of this standard is to improve
financial reporting by providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without having to apply complex
hedge accounting provisions. This statement was effective as of January&nbsp;1, 2008; however, it had no
impact on the consolidated financial statements because management did not elect the fair value option
for any financial instrument not presently being accounted for at fair value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In March&nbsp;2007, the EITF reached a final consensus on
Issue No.&nbsp;06-10, <I>Accounting for Deferred Compensation
and Postretirement Benefit Aspects of Collateral
Assignment Split-Dollar Life Insurance Arrangements</I>,
(&#147;EITF 06-10&#148;). EITF 06-10 requires employers to
recognize a liability for the post-retirement benefit
related to collateral assignment split-dollar life
insurance arrangements in accordance with SFAS 106 or
APB Opinion 12. EITF 06-10 also requires employers
to recognize and measure an asset based on the
nature and
substance of the
collateral
assignment
split-dollar life
insurance
arrangement. The
provisions of EITF
06-10 were
effective on
January&nbsp;1, 2008.
EITF 06-10 had no
impact on the
consolidated
financial
statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In October&nbsp;2008, the FASB issued FASB Staff Position (&#147;FSP&#148;) No.&nbsp;FAS 157-3, <I>Determining
the Fair Value of a Financial Asset When The Market for That Asset Is Not Active, </I>(&#147;FSP
157-3&#148;). This FSP clarifies the application of SFAS 157 in a market that is not active
and provides an example to illustrate key considerations in determining the
fair value of a financial asset when the market for that financial asset is not active.
This FSP was effective upon issuance, including prior periods for which financial
statements have not been issued; and, therefore was effective for the consolidated
financial statements as of and for the year ended December&nbsp;31, 2008. Adoption of FSP
157-3 had no impact on the consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Summary of Significant Accounting Policies </B>(Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Recent accounting pronouncements </I></B>(Continued)

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In December&nbsp;2008, the FASB issued FSP No.&nbsp;FAS 140-4 and FIN 46(R)-8, <I>Disclosures about
Transfers of Financial Assets and Interests in Variable Interest Entities, </I>(&#147;FSP 140-4
and 46(R)-8&#148;). This FSP requires additional disclosures by public entities with
continuing involvement in transfers of financial assets to special purpose entities and
with variable interests in VIEs, including sponsors that have a variable interest in a
VIE. Additionally, this FSP requires certain disclosures to be provided by a public
entity that is (1)&nbsp;a sponsor of a qualifying special-purpose entity (SPE)&nbsp;that holds a
variable interest in the qualifying SPE but was not the transferor (nontransferor)&nbsp;of
financial assets to the qualifying SPE, and (2)&nbsp;a servicer of a qualifying SPE that
holds a significant variable interest in the qualifying SPE but was not the transferor
(nontransferor)&nbsp;of financial assets to the qualifying SPE. This FSP is effective for
the first reporting period (interim or annual) that ends after December&nbsp;15, 2008. The
Bank adopted FSP 140-4 and 46(R)-8 as of December&nbsp;31, 2008, and its adoption did not
have a significant impact on the consolidated financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In May&nbsp;2009, the FASB issued SFAS No.&nbsp;165, <I>Subsequent Events </I>(&#147;SFAS 165&#148;). Under SFAS
165, companies are required to evaluate events and transactions that occur after the
balance sheet date but before the date the financial statements are issued, or
available to be issued in the case of non-public entities. SFAS 165 requires entities
to recognize in the financial statements the effect of all events or transactions that
provide additional evidence of conditions that existed at the balance sheet date,
including the estimates inherent in the financial preparation process. Entities shall
not recognize the impact of events or transactions that provide evidence about
conditions that did not exist at the balance sheet date but arose after that date.
SFAS 165 also requires entities to disclose the date through which subsequent events
have been evaluated. SFAS 165 was effective for interim and annual reporting periods
ending after June&nbsp;15, 2009. The Bank adopted the provisions of SFAS 165 for the
quarter ended June&nbsp;30, 2009, as required, and adoption did not have a significant
impact on the consolidated financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Other than disclosures contained within these statements, the Bank has determined that
all other recently issued accounting pronouncements will not have a material impact on
its consolidated financial statements or do not apply to its operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Reclassification</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Certain amounts in the 2007 and 2008 consolidated financial statements have been
reclassified to conform to the 2009 presentation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 2. Cash and Cash Equivalents</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I>Restrictions on cash and due from banks</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank is required to maintain average balances on hand or with the Federal Reserve
Bank. At June&nbsp;30, 2009, December&nbsp;31, 2008, and December&nbsp;31, 2007, these reserve
balances amounted to $350,000 (unaudited), $350,000, and $350,000, respectively.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-13<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amortized cost and estimated market value of securities classified as available for
sale are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(Unaudited)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">June 30, 2009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Gains</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Available for Sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities of U.S.
Government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,625,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(10,475</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,639,522</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,304,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">380,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16,003</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,669,129</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and municipal
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,540,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(233,530</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,312,426</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,470,215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">410,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(260,008</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,621,077</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Held to Maturity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">December 31, 2008</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Gains</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Available for Sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities of U.S.
Government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,545,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">117,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(13,529</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,648,665</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,326,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">328,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71,006</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,583,932</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and municipal
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,543,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(269,529</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,276,495</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,415,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">447,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(354,064</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,509,092</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Held to Maturity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-14<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Securities </B>(Continued)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">December 31, 2007</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Gains</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Available for Sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities of U.S.
Government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,743,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(66,729</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,676,336</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,517,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">151,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(62,049</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,606,175</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and municipal
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,718,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,885</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(35,639</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,684,426</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,978,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">153,063</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(164,417</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,966,937</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Held to Maturity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,517</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The amortized cost and estimated market value of securities at June&nbsp;30, 2009 and
December&nbsp;31, 2008, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(Unaudited)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">June 30, 2009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Securities Available for Sale</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Securities Held to Maturity</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due in one year or less</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,007,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,012,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due after one year through
five years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,389,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,357,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due five years to ten years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,637,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,613,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due after ten years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,969,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage-backed
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,304,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,669,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,470,215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,621,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,624</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Securities </B>(Continued)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">December 31, 2008</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Securities Available for Sale</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Securities Held to Maturity</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amortized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due in one year or less</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,033,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,048,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due after one year through
five years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,538,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,489,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due five years to ten years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,386,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,425,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Due after ten years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,962,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage-backed securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,326,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,583,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,415,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,509,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,961</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">No realized gains or losses were recognized for the six-month periods ended June&nbsp;30,
2009 and 2008 (unaudited), or for the years ended December&nbsp;31, 2008 and 2007,
respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank has pledged securities with carrying values of approximately $14,939,000
(unaudited), $22,612,000, and $17,350,000 (which approximates market values) to secure
deposits of public and private funds as of June&nbsp;30, 2009, December&nbsp;31, 2008, and
December&nbsp;31, 2007, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Securities with gross unrealized losses at June&nbsp;30, 2009, December&nbsp;31, 2008 and December
31, 2007, aggregated by investment category and length of time that individual
securities have been in a continuous loss position, are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22">(Unaudited)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000">June 30, 2009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Less than 12 Months</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">12 Months or Greater</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22">(dollars in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Available for Sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities of U.S.
Government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,854</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and municipal
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(60</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(174</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(234</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">(64</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,610</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(196</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(260</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Securities </b>(Continued)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000">December 31, 2008</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Less than 12 Months</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">12 Months or Greater</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22">(dollars in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Available for Sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities of U.S.
Government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(57</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and municipal
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(151</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(119</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(270</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(179</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(176</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(355</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000">December 31, 2007</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Less than 12 Months</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">12 Months or Greater</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Gross</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Market</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22">(dollars in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities Available for Sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities of U.S.
Government agencies
and corporations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(67</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(67</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed and
related securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,428</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(61</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(62</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and municipal
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,026</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(35</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(35</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(129</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(164</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-17<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Securities </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Management evaluates securities for other-than-temporary impairment at least on a
quarterly basis, and more frequently when economic or market concerns warrant such
evaluation. Consideration is given to (1)&nbsp;the length of time and the extent to which
the fair value has been less than cost, (2)&nbsp;the financial condition and near-term
prospects of the issuer, and (3)&nbsp;the intent and ability of the Bank to retain its
investment in the issuer for a period of time sufficient to allow for any anticipated
recovery in market value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At June&nbsp;30, 2009, the 20 (unaudited)&nbsp;securities with unrealized losses have depreciated
3.37&nbsp;percent (unaudited)&nbsp;from the Bank&#146;s amortized cost basis. At December&nbsp;31, 2008,
the 25 securities with unrealized losses have depreciated 3.76&nbsp;percent from the Bank&#146;s
amortized cost basis. At December&nbsp;31, 2007, the 30 securities with unrealized losses
have depreciated 1.22&nbsp;percent from the Bank&#146;s amortized cost basis. Most of these
securities are guaranteed by either U.S. government corporations or agencies. These
unrealized losses relate principally to current interest rates for similar types of
securities. In analyzing an issuer&#146;s financial condition, management considers whether
the securities are issued by the federal government or its agencies, whether downgrades
by bond rating agencies have occurred, and the results of reviews of the issuer&#146;s
financial condition. Since management has the ability to hold debt securities until
maturity, or for the foreseeable future if classified as available-for-sale, no
declines in fair value are deemed to be other than temporary in nature. Accordingly,
management has not recorded any write downs in the carrying values of its securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 4. Loans and Allowance for Loan Losses</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank and Southland provide mortgage, consumer, and commercial lending services to individuals and
businesses primarily in the East Tennessee area.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank&#146;s loans consist of the following at:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mortgage loans on real estate:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential 1-4 family</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">77,194,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">75,296,542</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">71,629,133</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Residential multifamily (5 or more)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,605,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,255,113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,840,816</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Commercial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,196,052</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,294,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,709,572</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Construction and development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,428,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,207,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,654,664</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Equity lines of credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,798,698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,670,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,129,731</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172,222,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172,724,529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">156,963,916</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,174,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,564,990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,940,076</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consumer loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,046,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,865,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,010,159</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195,443,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,155,362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">181,914,151</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less: Allowance for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,757,596</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,082,602</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,536,097</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Unearned interest and fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(285,490</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(360,646</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(543,967</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net deferred loan origination fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(183,059</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(192,457</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(231,075</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loans, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">192,217,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">196,519,657</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">178,603,012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-18<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 4. Loans and Allowance for Loan Losses </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">An analysis of the allowance for loan losses follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">Years Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Six Months Ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,082,602</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,536,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,574,072</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">760,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442,895</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans charged off</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(484,679</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(323,747</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(528,943</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Recoveries of loans
previously charged off</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,073</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,757,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,082,602</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,536,097</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank&#146;s only significant concentration of credit at June&nbsp;30, 2009, December&nbsp;31, 2008
and December&nbsp;31, 2007, occurred in real estate loans which totaled $172,222,769
(unaudited), $172,724,529 and $156,963,916, respectively. While real estate loans
accounted for 88.12&nbsp;percent (unaudited)&nbsp;of total loans at June&nbsp;30, 2009, 86.30&nbsp;percent
of total loans at December&nbsp;31, 2008, and 86.29&nbsp;percent of total loans at December&nbsp;31,
2007, these loans were primarily residential development and construction loans,
residential mortgage loans, and commercial loans secured by commercial properties.
Substantially all real estate loans are secured by properties located in Tennessee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The following is a summary of information pertaining to impaired and non-accrual loans:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impaired loans without a valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,536,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,227,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impaired loans with a valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,961,531</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,320,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,168,693</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total impaired loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,497,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,548,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,168,693</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valuation allowance related to impaired loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">627,548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">926,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">229,361</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total non-accrual loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">787,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,139,467</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">316,498</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total loans past-due ninety days or more
and still accruing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">33,712</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">43,479</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-19<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 4. Loans and Allowance for Loan Losses </B>(Continued)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Six Months</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">Years Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average investment in impaired loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,633,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,653,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,269,708</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income recognized on impaired
loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">406,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income recognized on a cash
basis on impaired loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">406,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 5. Premises and Equipment</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">A summary of bank premises and equipment is as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,060,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,060,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,060,880</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Buildings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,181,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,171,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,115,926</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Leasehold improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,987</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,551,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,515,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,349,199</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Automobiles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,323</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,905,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,859,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,628,315</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less accumulated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,815,243</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,515,790</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,763,677</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,090,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,343,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,864,638</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Depreciation expense amounted to $325,042 (unaudited), $374,338 (unaudited), $763,939
and $837,351 for the six-month periods ended June&nbsp;30, 2009 and 2008, and the years
ended December&nbsp;31, 2008 and 2007, respectively.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 6. Investments, at Cost</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank carries the following investments at cost because they are not readily
marketable and there is no established market price. These investments are normally
redeemed by the issuer or the underwriter at par value and may carry call or put
options under certain circumstances. Investments carried at cost are:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal Home Loan Bank of Cincinnati
common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,898,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,898,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,786,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">West Point Market, Inc. variable rate
demand notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bee-Holdings, Inc. floater note</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">960,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,898,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,898,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,746,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 7. Deposits</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The aggregate amount of time deposits in denominations of $100,000 or more were
$47,225,457 (unaudited)&nbsp;at June&nbsp;30, 2009, $56,444,040 at December&nbsp;31, 2008 and
$50,041,560 at December&nbsp;31, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Deposit accounts are federally insured up to $250,000 per depositor through December
31, 2013. On January&nbsp;1, 2014, the FDIC insurance limit will return to $100,000 per
depositor for all deposit categories except for IRA and certain retirement accounts,
which will remain at $250,000 per depositor.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At June&nbsp;30, 2009, the scheduled maturities of time deposits are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Unaudited</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70,417,893</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,014,721</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,400,959</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,849,313</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2014</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,213,866</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">114,896,752</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At December&nbsp;31, 2008, the scheduled maturities of time deposits are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">75,862,084</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,673,342</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,798,320</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,125,199</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,663,557</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,207</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,160,709</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-21<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 8. Securities Sold Under Agreements to Repurchase</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Securities sold under agreements to repurchase averaged approximately $1,145,000
(unaudited)&nbsp;for the six months ended June&nbsp;30, 2009, $1,400,000 for the year ended
December&nbsp;31, 2008 and $1,692,000 for the year ended December&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 9. Federal Home Loan Bank Advances</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The schedule of advances from the Federal Home Loan Bank (FHLB)&nbsp;are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Interest</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Final</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Date of Advance</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Rate</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Maturity Date</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">06/30/09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">12/31/08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">12/31/07</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">September&nbsp;6, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.93</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">October 1, 2012</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">377,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">430,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">532,273</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;30, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.39</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">November 30, 2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;5, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">2.85</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">February 5, 2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July&nbsp;11, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">July 11, 2013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">July&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.28</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">September 6, 2013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;28, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.99</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">February 26, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December&nbsp;23, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.54</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">March 23, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,655,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December&nbsp;29, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.54</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="LEFT">March 27, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,377,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,310,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,532,273</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Pursuant to collateral agreements with the FHLB, the advances and letters of credit
described below are secured by the Bank&#146;s FHLB stock and qualifying first mortgage
loans, totaling approximately $30,871,000 (unaudited), $41,037,000 and $17,826,000 as
of June&nbsp;30, 2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank also has a Standby Letter of Credit for Public Unit Deposit Collateralization
Line with the Federal Home Loan Bank which provides an alternative for the Bank instead
of pledging securities to public depositors up to a maximum credit line of approximately
$17,000,000. This line of credit is also secured by the same collateral described
above. The FHLB issues irrevocable letters of credit on behalf of the Bank to certain
public entities which are depositors of the Bank. Letters of credit outstanding as of
June&nbsp;30, 2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, were $12,000,000 (unaudited),
$14,200,000 and $6,500,000, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At June&nbsp;30, 2009, the scheduled maturities of the Federal Home Loan Bank advances are
as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Unaudited</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,104,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,112,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,151</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2014</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,377,751</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-22<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 9. Federal Home Loan Bank Advances </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At December&nbsp;31, 2008, the scheduled maturities of the Federal Home Loan Bank advances
are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,991,800</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,112,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,112,900</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,072</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,310,272</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 10</B>. <B>Regulatory Matters</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank is subject to various regulatory capital requirements administered by the
federal banking agencies. Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary actions by regulators that, if
undertaken, could have a direct material affect on the Bank and the consolidated
financial statements. Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Bank must meet specific capital guidelines that
involve quantitative measures of the Bank&#146;s assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices. The
Bank&#146;s capital amounts and classification are also subject to qualitative judgments by
the regulators about components, risk weightings, and other factors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Quantitative measures established by regulation to ensure capital adequacy require the
Bank to maintain minimum amounts and ratios (set forth in the table below) of total and
Tier I capital (as defined in the regulations) to risk-weighted assets (as defined),
and of Tier I capital (as defined) to average assets (as defined). Management
believes, as of June&nbsp;30, 2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, that the Bank
meets all capital adequacy requirements to which it is subject.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">As of June&nbsp;30, 2009, the most recent notification from the OTS categorized the Bank as
well capitalized under the regulatory framework for prompt corrective action. There
are no conditions or events since that notification that management believes have
changed the institution&#146;s prompt corrective action category.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-23<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 10</B>. <B>Regulatory Matters </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank&#146;s actual capital amounts and ratios are presented in the table. Dollar
amounts are presented in thousands.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">For Capital</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Actual</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Adequacy Purposes</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Ratio</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Ratio</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of June&nbsp;30, 2009: (Unaudited)
Total capital
(to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15.04</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tier I capital
(to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">13.78</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tier I capital
(to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tangible capital
(to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.50</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of December&nbsp;31, 2008:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total capital
(to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.01</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tier I capital
(to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">12.79</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tier I capital
(to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.40</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tangible capital
(to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.40</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.50</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of December&nbsp;31, 2007:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total capital
(to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.77</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tier I capital
(to risk-weighted assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">13.52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tier I capital
(to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.80</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tangible capital
(to adjusted total assets)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.80</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.50</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Below is a reconciliation of GAAP and regulatory capital amounts (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total equity per the financial statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">23,271</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(555</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(636</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(793</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrealized (gains)&nbsp;losses on available for sale securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(94</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(58</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tier I capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,485</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for loan losses &#151; allowable portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,084</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total risk-based capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">25,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24,569</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-24<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 11. Income Taxes</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Net deferred tax assets consist of the following components as of June&nbsp;30, 2009,
December&nbsp;31, 2008 and December&nbsp;31, 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Allowance for loan losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">304,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">428,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">219,332</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">602,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">597,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">467,526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive benefit plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">165,551</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">181,113</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,992</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,192,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,273,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">972,963</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">FHLB stock dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">375,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">375,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">332,319</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Depreciable assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177,358</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">364,942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">494,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">354,391</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">883,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,038,734</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">864,068</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net deferred tax assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">309,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">234,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">108,895</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The provision for income taxes charged to income for the six-month periods ended June
30, 2009 and 2008, and the years ended December&nbsp;31, 2008 and 2007, consists of the
following:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">Six Months Ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">Years Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">445,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">312,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">679,812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">423,366</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(39,357</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(159,867</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(192,559</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(31,564</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provisions for income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">405,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">152,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">487,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">391,802</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 11. Income Taxes </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The income tax provision is less than the expected tax provision computed by multiplying
income before income taxes by the statutory federal income tax rates. The reasons for
this difference are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">Six Months Ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">Years Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">%</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected tax at statutory
rates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">506,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">34.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">209,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">34.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">542,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">34.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">514,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">34.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax-exempt earnings on
life insurance policies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(48,400</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.25</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(48,400</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7.86</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(98,100</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6.14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(85,600</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5.66</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax-exempt interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2.95</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33,700</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5.47</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(75,650</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4.74</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(49,900</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.30</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">State income taxes, net of
federal income tax
benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(72,210</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4.85</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(732</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(51,548</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.41</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Provision for income
taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">405,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">27.24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">152,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">24.84</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">487,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">30.52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">391,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25.92</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 12. Employee Benefit Plan</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank has adopted a 401(k) plan covering substantially all employees. Employees are
allowed to contribute up to 75% of earnings and, in addition, the Bank will match a
portion of the employees&#146; contributions. The expenses incurred by the Bank for the plan
totaled $151,642 (unaudited), $169,234 (unaudited), $312,568 and $318,206 for the
six-month periods ended June&nbsp;30, 2009 and 2008, and the years ended December&nbsp;31, 2008
and 2007, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 13. Deferred Compensation</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank has established deferred compensation plans for the benefit of its board of
directors. Under the plans, any director electing to defer directors&#146; fees will be
entitled to receive the accumulated benefits, including interest earned, over a period
of five to fifteen years following retirement. The Bank recognizes the liability for
these benefits over the service period. As of June&nbsp;30, 2009, December&nbsp;31, 2008 and
December&nbsp;31, 2007, the liability for these benefits was $905,360 (unaudited), $926,608
and $925,535,
respectively. The Bank has insured the lives of certain directors who participate in
the deferred compensation plans to assist in the funding of the deferred compensation
liability. The Bank is the owner and beneficiary of the insurance policies.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 14. Executive Benefit Plans</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank has adopted a noncontributory executive salary continuation agreement and an
executive salary continuation plan for its former president. The following is a summary
of the plans&#146; funded status:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Projected benefit obligation
at beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">449,863</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">473,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">494,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Service cost and net periodic
benefit cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,907</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Payments to former president</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23,587</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(50,472</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(50,904</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net benefit liability at end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">432,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">449,863</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">473,004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The weighted-average discount rate used in determining the present value of the benefit
liability is 6%.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Also, the Bank has an employment agreement with its president and chief executive
officer for post-retirement compensation and other related benefits. As of June&nbsp;30,
2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, the net present value liability of these
benefits was approximately $278,000 (unaudited), $168,000 and $38,000, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 15. Significant Group Concentrations of Credit Risk</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Most of the Bank&#146;s and subsidiaries&#146; business activity is with customers located within
East Tennessee. As of June&nbsp;30, 2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, the Bank
and Southland had concentrations of loans in real estate lending and consumer lending.
Generally these loans are secured by the underlying real estate and consumer goods. The
usual risks associated with such concentrations are generally mitigated by being spread
over several hundred unrelated borrowers and by adequate loan-to-collateral-value
ratios.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-27<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 16. Fair Value Disclosures</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value measurements:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank utilizes fair value measurements to record fair value adjustments to certain
assets and liabilities and to determine fair value disclosures. Securities available
for sale are recorded at fair value on a recurring basis. Additionally, from time to
time, the Bank may be required to record at fair value other assets on a nonrecurring
basis, such as loans held for sale, loans held for investment and certain other assets.
These nonrecurring fair value adjustments would typically involve application of lower
of cost or market accounting or write-downs of individual assets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">SFAS 157 establishes a three-tier fair value hierarchy which requires an entity to
maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value, as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Level 1 &#151; Quoted prices (unadjusted)&nbsp;in active markets for identical assets or
liabilities that the Bank has the ability to access.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Level 2 &#151; Significant other observable inputs other than Level 1 prices, such as quoted
prices for similar assets or liabilities in active markets, quoted prices in markets
that are not active and other inputs that are observable or can be corroborated by
observable market data.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Level 3 &#151; Significant unobservable inputs that reflect a company&#146;s own assumptions
about the assumptions that market participants would use in pricing an asset or
liability.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Following is a description of valuation methodologies used for assets and liabilities
recorded at fair value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Securities available for sale &#151; Securities classified as available for sale are
reported at fair value utilizing Level 2 inputs. For these securities, the Bank
obtains fair value measurements from an independent pricing service. The fair value
measurements consider observable data that may include dealer quotes, market spreads,
cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data,
market consensus prepayment speeds, credit information and the bond&#146;s terms and
conditions, among other things.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Impaired loans &#151; The Bank does not record loans at fair value on a recurring basis.
However, from time to time, a loan is considered impaired and an allowance for loan
losses is established. Loans for which it is probable that payment of interest and
principal will not be made in accordance with the contractual terms of the loan
agreement are considered impaired. Once a loan is identified as individually impaired,
management measures impairment in accordance with SFAS 114, <I>Accounting by Creditors for
Impairment of a Loan</I>. The fair value of impaired loans is estimated using several
methods including collateral value, liquidation value and discounted cash flows. Those
impaired loans not requiring an allowance represent loans for which the fair value of
the expected repayments or collateral exceed the recorded investments in
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-28<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 16. Fair Value Disclosures </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value measurements: (Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">such loans. At June&nbsp;30, 2009 and December&nbsp;31, 2008, substantially all of the total
impaired loans were evaluated based on the fair value of collateral. In accordance
with SFAS 157, impaired loans where an allowance is established based on the fair value
of collateral require classification in the fair value hierarchy. When the fair value
of the collateral is based on the observable market price or a current appraised value,
the Bank records the impaired loan as nonrecurring Level 2. When an appraised value is
not available or management determines the fair value of the collateral is further
impaired below the appraised value and there is no observable market price, the Bank
records the impaired loan as nonrecurring Level 3.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The table below presents the recorded amount of assets and liabilities measured at fair
value on a recurring basis.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Quoted Prices in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Significant</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Significant</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Active Markets</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">for Identical</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Observable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unobservable</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Assets</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Inputs</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Inputs</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Balance</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(Level 1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(Level 2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(Level 3)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June&nbsp;30, 2009:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities available
for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,621,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,621,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December&nbsp;31, 2008:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities available
for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,509,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,509,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The table below presents information about assets and liabilities on the balance sheet
at June&nbsp;30, 2009 and December&nbsp;31, 2008 for which a nonrecurring change in fair value was
recorded
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Quoted Prices in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Significant</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Significant</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Active Markets</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">for Identical</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Observable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unobservable</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Assets</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Inputs</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Inputs</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Balance</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(Level 1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(Level 2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(Level 3)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">June&nbsp;30, 2009:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Impaired loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,334,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,334,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December&nbsp;31, 2008:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Impaired loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,394,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,394,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-29<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 16. Fair Value Disclosures </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value measurements: (Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Losses derived from Level 3 inputs were calculated primarily by models utilizing
estimated collateral value or the discounted present value of expected cash flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value of financial instruments:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value estimates are made at a specific point in time, based on relevant market
information about the financial instrument. These estimates do not reflect any premium
or discount that could result from offering for sale at one time the Bank&#146;s entire
holdings of a particular financial instrument. Because no market exists for a
significant portion of the Bank&#146;s financial instruments, fair value estimates are based
on judgments regarding future expected loss experience, current economic conditions,
risk characteristics of various financial instruments, and other factors. These
estimates are subjective in nature; involve uncertainties and matters of significant
judgment; and, therefore, cannot be determined with precision. Changes in assumptions
could significantly affect the estimates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value estimates are based on existing financial instruments without attempting to
estimate the value of anticipated future business and the value of assets and
liabilities that are not considered financial instruments. The following methods and
assumptions were used to estimate the fair value of each class of financial instruments:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Cash, cash equivalents, and interest-bearing deposits in banks:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">For cash, cash equivalents, and interest-bearing deposits in banks, the carrying amount
is a reasonable estimate of fair value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Securities:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The fair value of securities, excluding investments carried at cost, is estimated based
on bid prices published in financial newspapers or bid quotations received from
securities dealers. The carrying value of investments carried at cost approximates fair
value based on the redemption provisions of each issuer.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-30<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 16. Fair Value Disclosures </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value of financial instruments: (Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Loans, net:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The fair value of loans is calculated by discounting scheduled cash flows through the
estimated maturity using estimated market discount rates, adjusted for credit risk and
servicing costs. The estimate of maturity is based on the Bank&#146;s historical experience
with repayments for each loan classification, modified, as required, by an estimate of
the effect of current economic and lending conditions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Cash surrender value of bank owned life insurance:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">For cash surrender value of bank owned life insurance, the carrying amount is a
reasonable estimate of fair value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Deposits:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The fair value of deposits with no stated maturity, such as noninterest-bearing demand
deposits and NOW, money market, and savings accounts, is equal to the amount payable on
demand at the reporting date. The fair value of time deposits is based on the
discounted value of contractual cash flows. The discount rate is estimated using the
rates currently offered for deposits of similar remaining maturities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Securities sold under agreements to repurchase:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The estimated fair value of these liabilities, which are extremely short term,
approximates their carrying value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Federal Home Loan Bank advances:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Rates currently available to the Bank for debt with similar terms and remaining
maturities are used to estimate the fair value of existing debt.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Commitments to extend credit:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The fair value of commitments is estimated using the fees currently charged to enter
into similar agreements, taking into account the remaining terms of the agreements and
the present creditworthiness of the counterparties. For fixed-rate loan commitments,
fair value also considers the difference between current levels of interest rates and
the committed rates.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-31<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 16. Fair Value Disclosures </B>(Continued)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Fair value of financial instruments: (Continued)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The carrying amount and estimated fair value of the Bank&#146;s financial instruments are as
follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000">December 31</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">June 30, 2009</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">2007</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Carrying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Estimated</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Carrying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Estimated</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Carrying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Estimated</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Fair Value</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Fair Value</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Fair Value</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash and cash
equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,284</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest-bearing
deposits in banks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,981</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investments, at cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,746</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loans, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180,392</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash surrender value
of bank owned life
insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,020</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">210,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">206,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">214,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198,841</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities sold under
agreements to
repurchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,151</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal Home Loan
Bank advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,883</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrecognized financial
instruments (net of
contract amount):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Commitments to
extend credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 17. Related Party Transactions</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In the ordinary course of business, the Bank has granted loans to principal officers and
directors and their affiliates. Activity for the six months ended June&nbsp;30, 2009 and the
years ended December&nbsp;31, 2008 and 2007, consisted of the following:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Beginning balance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,066,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,499,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,183,881</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">New loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">320,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,230,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">380,793</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Repayments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(480,850</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,663,679</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(65,516</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ending balance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">905,616</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,066,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,499,158</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank held related party deposits of $5,498,332 (unaudited), $5,099,187 and $5,305,243
at June&nbsp;30, 2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, respectively.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-32<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 18. Financial Instruments With Off-Balance-Sheet Risk</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank is party to financial instruments with off-balance sheet risk in the normal
course of business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit and standby letters of credit. These
instruments involve, to varying degrees, elements of credit and interest rate risk in
excess of the amount recorded in the accompanying consolidated balance sheets. Such
financial instruments are recorded when they are funded.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank&#146;s exposure to credit loss in the event of nonperformance by the counterparty to
the financial instruments for commitments to extend credit and standby letters of credit
is represented by the contractual amount of those instruments. The Bank uses the same
credit policies in making such commitments as it does for instruments that are included
in the balance sheet.</div>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At June&nbsp;30, 2009, December&nbsp;31, 2008 and December&nbsp;31, 2007, commitments under standby
letters of credit were approximately $2,800,000 (unaudited), $3,200,000 and $485,000,
respectively. Undisbursed loan commitments aggregated approximately $20,775,000
(unaudited), $22,869,000 and $26,621,000 at June&nbsp;30, 2009, December&nbsp;31, 2008 and December
31, 2007, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Commitments to extend credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee. Since
many of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The Bank
evaluates each customer&#146;s creditworthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Bank upon extension of credit, is based
on management&#146;s credit evaluation. Collateral held varies but may include accounts
receivable, inventory, property and equipment, and income-producing commercial
properties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Standby letters of credit are conditional commitments issued by the Bank to guarantee the
performance of a customer to a third party. Standby letters of credit generally have
fixed expiration dates or other termination clauses and may require payment of a fee.
The credit risk involved in issuing letters of credit is essentially the same as that
involved in extending loan facilities to customers. The Bank&#146;s policy for obtaining
collateral, and the nature of such collateral, is essentially the same as that involved
in making commitments to extend credit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Bank has not been required to perform on any financial guarantees during any of the
periods presented. The Bank has not incurred any losses on its commitments in either the
six-month periods ended June&nbsp;30, 2009 and 2008, or years ended December&nbsp;31, 2008 and
2007.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-33<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)<BR>
AND YEARS ENDED DECEMBER 31, 2008 AND 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 19. Plan of Conversion and Change in Corporate Form</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">On July&nbsp;15, 2009, the Board of Directors of the Bank adopted a plan of conversion (Plan).
The Plan is subject to the approval of the Office of Thrift Supervision (OTS)&nbsp;and must
be approved by the affirmative vote of at least a majority of the total votes eligible to
be cast by the voting members of the Bank at a special meeting. The Plan sets forth that
the Bank proposes to convert into a stock savings bank structure with the establishment
of a stock holding company, Athens Bancshares Corporation (Company), as parent of the
Bank. The Bank will convert to the stock form of ownership, followed by the issuance of
all of the Bank&#146;s outstanding stock to the Company. Pursuant to the Plan, the Bank will
determine the total offering value and number of shares of common stock based upon an
independent appraiser&#146;s valuation. The stock will be priced at $10.00 per share. In
connection with the Plan, the Company intends to establish a charitable foundation which
will be funded with common stock of the Company and cash. In addition, the Bank&#146;s Board
of Directors will adopt an employee stock ownership plan (ESOP)&nbsp;which will subscribe 8%
of the common stock sold in the offering and contributed to the charitable foundation.
The Company is being organized as a corporation incorporated under the laws of the State
of Tennessee and will own all of the outstanding common stock of the Bank upon completion
of the conversion.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The costs of issuing the common stock will be deferred and deducted from the sales
proceeds of the offering. If the conversion is unsuccessful, all deferred costs will be
charged to operations. At June&nbsp;30, 2009, the Bank had incurred an insignificant amount
of deferred conversion costs in the form of retainers paid and included in other assets
on the accompanying June&nbsp;30, 2009, balance sheet. The Bank had incurred no deferred
conversion costs as of December&nbsp;31, 2008 or 2007. The transaction is subject to approval
by regulatory authorities and members of the Bank. At the completion of the conversion
to stock form, the Bank will establish a liquidation account in the amount of retained
earnings contained in the final prospectus. The liquidation account will be maintained
for the benefits of eligible savings account holders who maintain deposit accounts in the
Bank after conversion.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The conversion will be accounted for as a change in corporate form with the historic
basis of the Bank&#146;s assets, liabilities and equity unchanged as a result.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-34<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You should rely only on the information contained in this prospectus. Neither
Athens Bancshares Corporation nor Athens Federal Community Bank has authorized
anyone to provide you with different information. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered by this prospectus to any person or in any jurisdiction in
which an offer or solicitation is not authorized or in which the person making
an offer or solicitation is not qualified to do so, or to any person to whom it
is unlawful to make an offer or solicitation in those jurisdictions. The
information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of
any sale of common stock.
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt">&#091;LOGO&#093;</div>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">
(Proposed Holding Company for Athens Federal Community Bank)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">2,085,000 Shares<BR>
(Anticipated Maximum, Subject to Increase)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">COMMON STOCK
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">
<DIV align="center"><DIV style="font-size: 1pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Prospectus</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 1pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Keefe, Bruyette &#038; Woods</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 1pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2009
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Until <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, or 25&nbsp;days after commencement of the syndicated
community offering, if any, whichever is later, all dealers effecting
transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>








<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<!-- /TOC -->

<!-- link1 "PART II INFORMATION NOT REQUIRED IN PROSPECTUS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II<BR>
INFORMATION NOT REQUIRED IN PROSPECTUS</B>
</DIV>

<!-- link2 "Item&nbsp;13. Other Expenses of Issuance and Distribution" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;13. Other Expenses of Issuance and Distribution.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">SEC filing fee (1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,500</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">OTS filing fee
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">FINRA filing fee (1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,500</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nasdaq Stock Market listing fee
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">50,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Blue Sky fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7,500</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EDGAR, printing, postage and mailing
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">175,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Legal fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">350,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Accounting fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">175,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Appraiser&#146;s fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">40,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Business Plan fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">35,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Marketing firm fees (1)(2)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"></TD>
    <TD nowrap valign="top">(3)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Marketing firm expenses (including marketing firm&#146;s counsel fees)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">60,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Conversion agent fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">25,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Transfer agent and registrar fees and expenses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certificate printing
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7,500</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Miscellaneous
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px"><B>Total</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><B>$</B></TD>
    <TD align="right" valign="top"><B>1,180,000</B></TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated based on registration of 2,512,750 shares at $10.00 per share.
</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes 8.0% ESOP purchase and insider purchases equal to 11.7% of the offering.</TD>
</TR>


<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Keefe, Bruyette &#038; Woods, Inc. will receive a success fee equal to the greater of: (i)
$200,000 or (ii)&nbsp;1.125% of the aggregate dollar amount of the common stock sold in the
subscription and community offerings to persons other than the employee stock ownership plan
and directors, officers and employees of Athens Federal Community Bank or their immediate
families and shares issued to the charitable foundation. In addition, Keefe, Bruyette and
Woods, Inc. will be reimbursed up to $50,000 for the fees and expenses of its legal counsel.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->II&#150;1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;14. Indemnification of Directors and Officers" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;14. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;X of the Registrant&#146;s Charter provides:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">A director of this Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability: (i)&nbsp;for any
breach of the director&#146;s duty of loyalty to the Corporation or its
shareholders; (ii)&nbsp;for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; or
(iii)&nbsp;for unlawful distributions under Section&nbsp;48-18-304 of the
Tennessee Business Corporation Act, as amended (the &#147;TBCA&#148;). If the
TBCA is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the TBCA, as so amended.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">Any repeal or modification of the foregoing paragraph by the
shareholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time
of such repeal or modification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, Article&nbsp;XI of the Registrant&#146;s Charter provides:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(A)&nbsp;Each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter
a &#147;proceeding&#148;), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee
benefit plan, <U>and</U> (1)&nbsp;he or she conducted himself in good
faith, (2)&nbsp;he or she reasonably believed, (a)&nbsp;in the case of conduct
in his official capacity with the Corporation, that his or her conduct
was in the Corporation&#146;s best interest and, (b)&nbsp;in all other cases,
that his or her conduct was at least not opposed to the Corporation&#146;s
best interest, and (3)&nbsp;in the case of any criminal proceeding, he or
she had no reasonable cause to believe that his conduct was unlawful
(hereinafter an &#147;indemnitee&#148;), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
TBCA, as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than such
law permitted the Corporation to provide before such amendment),
against all expense, liability and loss (including attorneys&#146; fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in
connection therewith; <U>provided</U>, <U>however</U>, that, except
as provided in Section (C)&nbsp;hereof with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify any
such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(B)&nbsp;The right to indemnification conferred in Section&nbsp;A of this
Article&nbsp;XI shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its
final disposition (hereinafter an &#147;advancement of expenses&#148;);
<U>provided</U>, <U>however</U>, that, if the TBCA requires, an
advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such indemnitee,
including, without limitation, services to an employee benefit plan)
shall be made
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II&#150;2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">upon (1)&nbsp;delivery to the Corporation of an undertaking
(hereinafter an &#147;undertaking&#148;), by or on behalf of such indemnitee, to
repay all amounts so advanced if it shall ultimately be determined by
final judicial decision from which there is no further right to appeal
(hereinafter a &#147;final adjudication&#148;) that such indemnitee is not
entitled to be indemnified for such expenses under this Section or
otherwise, (2)&nbsp;delivery to the Corporation, by or on behalf of such
indemnitee, of a written affirmation of his or her good faith belief
that he or she has met the standard of conduct set forth in Section&nbsp;A
of this Article&nbsp;XI, and (3)&nbsp;a determination that the facts would not
preclude indemnification under this Article&nbsp;XI.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">The determination shall be made (a)&nbsp;by the Board of Directors by majority
vote of a quorum consisting of directors not at the time parties to the proceeding,
(b)&nbsp;if a quorum cannot be obtained under the preceding clause, by majority vote of a
committee duly designated by the Board of Directors (in which designation directors
who are parties may participate), consisting solely of two (2)&nbsp;or more directors not
at the time parties to the proceeding, (c)&nbsp;by independent special legal counsel, (i)
selected by the Board of Directors or its committee in the manner described in
clause (a)&nbsp;or (b)&nbsp;of this paragraph, or (ii)&nbsp;if a quorum of the board cannot be
obtained under clause (a)&nbsp;or (b)&nbsp;of this paragraph, selected by a majority vote of
the full Board of Directors (in which selection directors who are parties may
participate) or; (d)&nbsp;by the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may not be voted
on the determination.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">The rights to indemnification and to the advancement of expenses conferred in
Sections (A)&nbsp;and (B)&nbsp;of this Article&nbsp;XI shall be contract rights and such rights
shall continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee&#146;s heirs,
executors and administrators.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(C)&nbsp;If a claim under Section (A)&nbsp;or (B)&nbsp;of this Article&nbsp;XI is not paid in full by
the Corporation within sixty (60)&nbsp;days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty (20)&nbsp;days, the indemnitee may at
any time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expenses of prosecuting or defending such suit. In (1)&nbsp;any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in a suit
brought by the indemnitee to enforce a right to an advancement of expenses) it shall
be a defense that, and (2)&nbsp;in any suit by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee has
not met any applicable standard for indemnification set forth in the TBCA.
Authorization of indemnification and evaluation as to reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled to select counsel under clause (c)&nbsp;of the second
paragraph of Section (B). In any suit brought by the indemnitee to enforce a right
to indemnification or to an advancement of expenses hereunder, or by the Corporation
to recover an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article&nbsp;XI or otherwise shall be on the
Corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(D)&nbsp;The rights to indemnification and to the advancement of expenses conferred in
this Article&nbsp;XI shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, this Charter, Bylaws, agreement, vote of
shareholders or Disinterested Directors, as defined in Article&nbsp;XIII of this Charter,
or otherwise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(E)&nbsp;The Corporation may maintain insurance, at its expense, to protect itself and
any director, officer, employee or agent of the Corporation or subsidiary or
affiliate or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II&#150;3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">the Corporation would have the power to indemnify such person against such expense, liability or
loss under the TBCA.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(F)&nbsp;The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to any
employee or agent of the Corporation to the fullest extent of the provisions of this
Article&nbsp;XI with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
</DIV>
<!-- link2 "Item&nbsp;15. Recent Sales of Unregistered Securities" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;15. Recent Sales of Unregistered Securities.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->II&#150;4<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link2 "Item&nbsp;16. Exhibits and Financial Statement Schedules" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;16. Exhibits and Financial Statement Schedules.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The exhibits and financial statement schedules filed as a part of this registration statement are
as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(a)&nbsp;List of Exhibits (filed herewith unless otherwise noted)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">1.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Engagement Letter between Athens Federal Community Bank and Keefe, Bruyette &#038; Woods, Inc.</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">1.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Draft Agency Agreement*</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Plan of Conversion</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Charter of Athens Bancshares Corporation</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bylaws of Athens Bancshares Corporation</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Stock Certificate of Athens Bancshares Corporation</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Opinion of Kilpatrick Stockton LLP re: Legality</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">8.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Opinion of Kilpatrick Stockton LLP re: Federal Tax Matters</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">8.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Opinion of Hazlett, Lewis &#038; Bieter, PLLC re: State Tax Matters</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Athens Federal Community Bank Employee Stock Ownership Plan</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Athens Federal Community Bank Employee Stock Ownership Plan Trust Agreement</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Employee Stock Ownership Plan Loan Agreement, Pledge Agreement and Promissory Note</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Athens Federal Community Bank 401(k) Plan*</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Employment Agreement between Athens Federal Community Bank and Athens Bancshares
Corporation and Jeffrey L. Cunningham</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Employment Agreement between Athens Federal Community Bank and Athens Bancshares
Corporation and Michael R. Hutsell and Jay Leggett, Jr.</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Supplemental Executive Retirement Plan Agreement between Athens Federal Community Bank and
Jeffrey L. Cunningham</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Supplemental Executive Retirement Plan Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Athens Federal Community Bank Supplemental Executive Retirement Plan</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&#146;s Deferred Compensation Agreement between Athens Federal Community Bank and Dr.
James L. Carter, Jr.</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Athens Federal Community Bank Employee Severance Compensation Plan</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Athens Federal Community Bank Amended Group Term Carve Out Plan for Jeffrey L. Cunningham</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Athens Federal Community Bank Amended Group Term Carve Out Plan for Michael R. Hutsell</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Kilpatrick Stockton LLP (included in Exhibits 5.1 and 8.1 filed herewith)</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Hazlett, Lewis &#038; Bieter, PLLC</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">23.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Keller &#038; Company, Inc.</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of Attorney</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Appraisal Report of Keller &#038; Company, Inc. (P)</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Draft Marketing Materials</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Subscription Order Form and Instructions</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px">99.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Athens Federal Foundation Gift Instrument</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(P)</TD>
    <TD>&nbsp;</TD>
    <TD>The supporting financial schedules are filed in paper under Form&nbsp;SE pursuant to Rule&nbsp;202 of
Regulation&nbsp;S-T.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>To be filed by amendment.</TD>
</TR>



</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(b)&nbsp;Financial Statement Schedules
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All schedules have been omitted as not applicable or not required under the rules of Regulation
S-X.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --> II&#150;5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link2 "Item&nbsp;17. Undertakings" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;17. Undertakings.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any prospectus required by Section&nbsp;10(a)(3) of the
Securities Act of 1933;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the &#147;Calculation of Registration Fee&#148;
table in the effective registration statement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule&nbsp;430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the
Securities Act shall be deemed to be part of this Registration Statement as of the time
it was declared effective.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the securities:</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule&nbsp;424;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The portion of any other free writing prospectus relating to the
offering containing</TD>
</TR>






</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio --> II&#150;6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes to provide to the underwriter at the closing
specified in the underwriting agreement certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each purchaser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --> II&#150;7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Athens, State of Tennessee on September&nbsp;17, 2009.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Athens Bancshares Corporation<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Jeffrey L. Cunningham
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Jeffrey L. Cunningham&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President, Chief Executive Officer and Director&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Title</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Date</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Jeffrey L. Cunningham
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Jeffrey
L. Cunningham
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive Officer<br>
and Director<br>
(principal executive officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Michael R. Hutsell
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Michael
R. Hutsell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Chief Operating Officer<br>
and Chief Financial Officer<br>
(principal accounting and financial<br>
officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Dr.&nbsp;James L. Carter, Jr.
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Dr.&nbsp;James
L. Carter, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Elaine M. Cathcart
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Elaine
M. Cathcart
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ G. Scott Hannah
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>G.
Scott Hannah
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ G. Timothy Howard
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>G.
Timothy Howard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ M. Darrell Murray
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>M.
Darrell Murray
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Lyn B. Thompson
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Lyn
B. Thompson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Larry D. Wallace
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Larry
D. Wallace
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;17, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --> &nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "g20505sv1.htm", "description": "ATHENS BANCSHARES CORPORATION", "secsgml_size_bytes": 1927200}]
{"company-data": {"conformed-name": "Athens Bancshares Corp", "cik": "0001472093", "irs-number": "000000000", "state-of-incorporation": "TN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-161967", "film-number": "091074886"}, "business-address": {"street1": "106 WASHINGTON AVENUE", "street2": "P P BOX 869", "city": "ATHENS", "state": "TN", "zip": "37371-0869", "phone": "423 745 1111"}, "mail-address": {"street1": "106 WASHINGTON AVENUE", "street2": "P P BOX 869", "city": "ATHENS", "state": "TN", "zip": "37371-0869"}}
ATHENS BANCSHARES CORPORATION
Table of Contents
As filed with the Securities and Exchange Commission on September 17, 2009
Registration No. 333-__________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Athens Bancshares Corporation
and
Athens Federal Community Bank 401(k) Plan
(Exact name of registrant as specified in its charter)
Tennessee
6035
27-0920126
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(IRS
Employer Identification No.)
106 Washington Avenue
Athens, Tennessee 37303
(423) 745-1111
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Jeffrey L. Cunningham
President and Chief Executive Officer
106 Washington Avenue
Athens, Tennessee 37303
(423) 745-1111
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Paul M. Aguggia, Esq.
Martin Meyrowitz, Esq.
Victor L. Cangelosi, Esq.
Silver Freedman & Taff, LLP
Kilpatrick Stockton LLP
3299 K Street, Suite 100
607
14
th
Street, NW, Suite 900
Washington, DC 20007
Washington, DC 20005
(202) 295-4513
(202) 508-5854
Approximate date of commencement of proposed sale to the public:
As soon as practicable after
this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
þ
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
þ
(Do not check if a smaller reporting company)
Calculation of Registration Fee
Proposed Maximum
Proposed Maximum
Amount of
Title of Each Class of
Amount to
Offering Price
Aggregate Offering
Registration
Securities to be Registered
be Registered
Per Unit
Price (2)
Fee
Common Stock
$.01 par value
2,512,750 shares (1)
$
10.00
$
25,127,500
$
1,403.00
Participation Interests
(3)
—
(3
)
(4
)
(1)
Includes shares of common stock to be issued to the Athens Federal Foundation, a private
foundation.
(2)
Estimated solely for the purpose of calculating the registration fee.
(3)
In addition, pursuant to Rule 416(c) under the Securities Act, this registration statement
also covers an indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
(4)
The securities of Athens Bancshares Corporation to be purchased by the Athens Federal
Community Bank 401(k) Plan included in the amount shown for common stock. Accordingly, no
separate fee is required for the participation interests. In accordance with Rule 457(h) of
the Securities Act, as amended, the registration fee has been calculated on the basis of the
number of shares of common stock that may be purchased with the current assets of such Plan.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may determine.
Table of Contents
PARTICIPATION INTERESTS IN
ATHENS FEDERAL COMMUNITY BANK
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
AND
OFFERING OF 526,533 SHARES OF
ATHENS BANCSHARES CORPORATION
COMMON STOCK ($.01 PAR VALUE)
This prospectus supplement relates to the offer and sale to participants in the Athens Federal
Community Bank Employees' Savings & Profit Sharing Plan and Trust (the "401(k) Plan"), of
participation interests and shares of common stock of Athens Bancshares Corporation ("Athens
Bancshares") in connection with the Athens Bancshares initial public offering.
401(k) Plan participants may direct the 401(k) Plan trustee, to use all or a portion of their
account balances to subscribe for and purchase shares of Athens Bancshares common stock through the
Athens Bancshares Stock Fund. Based upon the value of the 401(k) Plan assets as of September 14,
2009, the Athens Bancshares Stock Fund trustee may purchase up to 526,533 shares of Athens
Bancshares common stock at a purchase price of $10.00 per share. This prospectus supplement
relates to the election of 401(k) Plan participants to direct the 401(k) Plan trustee to invest
their 401(k) Plan account balances in Athens Bancshares common stock.
The Athens Bancshares
Corporation prospectus dated _______________, 200_, which we have
attached to this prospectus supplement, includes detailed information regarding the offering of
shares of Athens Bancshares common stock and the financial condition, results of operations and
business of Athens Federal Community Bank ("Athens Federal "). This prospectus supplement provides
information regarding the 401(k) Plan. You should read this prospectus supplement together with
the prospectus and keep both for future reference.
Please refer to "Risk Factors" beginning on page _____ of the prospectus.
Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal
Deposit Insurance Corporation, nor any other state or federal agency or any state securities
commission, has approved or disapproved these securities. Any representation to the contrary is a
criminal offense.
These securities are not deposits or accounts and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
This prospectus supplement may be used only in connection with offers and sales by Athens
Bancshares of participation interests or shares of common stock under the 401(k) Plan in the
offering. No one may use this prospectus supplement to re-offer or resell interests or shares of
common stock acquired through the 401(k) Plan.
You should rely only on the information contained in this prospectus supplement and the
attached prospectus. Neither Athens Bancshares, Athens Federal nor the 401(k) Plan have authorized
anyone to provide you with different information.
This prospectus supplement does not constitute an offer to sell or solicitation of an offer to
buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer
or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the
prospectus nor any sale of common stock shall under any circumstances imply that there has been no
change in the affairs of Athens Federal or the 401(k) Plan since the date of this prospectus
supplement, or that the information contained in this prospectus supplement or incorporated by
reference is correct as of any time after the date of this prospectus supplement.
The date of this Prospectus Supplement is ________________, 200_.
TABLE OF CONTENTS
Page
THE OFFERING
1
Securities Offered
1
Election to Purchase Athens Bancshares Corporation Common Stock in the
Stock Offering
1
Value of Participation Interests
2
Method of Directing Transfer
2
Time for Directing Transfer
2
Irrevocability of Transfer Direction
2
Purchase Price of Athens Bancshares Corporation Common Stock
2
Nature of a Participant's Interest in Athens Bancshares Corporation Common Stock
3
Voting and Tender Rights of Athens Bancshares Corporation Stock
3
DESCRIPTION OF THE 401(k) PLAN
3
Introduction
3
Eligibility and Participation
4
Contributions Under the 401(k) Plan
4
Limitations on Contributions
4
401(k) Plan Investments
6
Benefits Under the 401(k) Plan
7
Withdrawals and Distributions from the 401(k) Plan
7
ADMINISTRATION OF THE 401(k) PLAN
8
Trustees
8
Reports to 401(k) Plan Participants
8
Plan Administrator
8
Amendment and Termination
8
Merger, Consolidation or Transfer
8
Federal Income Tax Consequences
8
Restrictions on Resale
10
SEC Reporting and Short-Swing Profit Liability
10
LEGAL OPINION
11
i
Table of Contents
THE OFFERING
Securities Offered
The securities offered in connection with this prospectus supplement are participation
interests in the 401(k) Plan. At a purchase price of $10.00 per share, the 401(k) Plan trustee may
acquire up to 526,533 shares of Athens Bancshares common stock in the stock offering (the "Stock
Offering"). The interests offered under this prospectus supplement are conditioned on the close of
the Stock Offering. Certain subscription rights and purchase limitations also govern your
investment in the Athens Bancshares Stock Fund in connection with the Stock Offering. See
"The
Conversion and Stock Offering — Subscription Offering and
Subscription Rights"
and
"— Limitations
on Purchases of Shares"
in the prospectus attached to this prospectus supplement for further
discussion of these subscription rights and purchase limitations.
This prospectus supplement contains information regarding the 401(k) Plan. The attached
prospectus contains information regarding the Stock Offering and the financial condition, results
of operations and business of Athens Federal and its affiliates. The address of the principal
executive office of Athens Federal is 106 Washington Avenue, Athens, Tennessee 37371. The
telephone number of Athens Federal is (800) 526-3572.
Election to Purchase Athens Bancshares Corporation Common Stock in the Stock Offering
In connection with the Stock Offering, you may direct the 401(k) Plan trustee to transfer all
or a portion of your 401(k) Plan account balance to the Athens Bancshares Stock Fund. The 401(k)
Plan trustee will subscribe for Athens Bancshares common stock offered for sale in the Stock
Offering in accordance with each participant's direction. If there is not enough Athens Bancshares
common stock available in the Stock Offering to fill all subscriptions, the common stock will be
apportioned and the 401(k) Plan trustee may not be able to purchase all of the common stock you
requested. If the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan
funds (which are not invested in Athens Bancshares common stock) will be reinvested in accordance
with the investment elections that you have in place for your elective deferrals.
All eligible plan participants are permitted to direct a transfer of all or a portion of their
account balances in the 401(k) Plan into the Athens Bancshares Stock Fund. However, transfer
directions are subject to subscription rights and purchase priorities. See
"Summary — Persons Who
Can Order Stock in the Offering"
in the attached prospectus. Athens Bancshares has granted rights
to subscribe for shares of Athens Bancshares common stock to the following persons in the following
order of priority: (1) persons with $50 or more on deposit at Athens Federal as of the close of
business on March 31, 2008; (2) the Athens Federal Community Bank Employee Stock Ownership Plan;
(3) persons with $50 or more on deposit at Athens Federal as of the close of business on September
30, 2009; and (4) depositors of Athens Federal as of the close of business on _________________ who
are not eligible under categories 1 and 3 above and borrowers of Athens Federal as of May 1, 1999
whose borrowings still exist as of the close of business on ___________________. If you fall
into one of the above subscription offering categories, you have subscription rights to purchase
shares of Athens Bancshares common stock in the Stock Offering and you may use your account balance
in the 401(k) Plan to subscribe for shares of Athens Bancshares common stock.
1
Table of Contents
The limitations on the total amount of Athens Bancshares common stock that you may purchase in
the Stock Offering, as described in the prospectus (see
"The Conversion and Stock Offering —
Limitations on Purchases of Shares"
), will be calculated based on the aggregate amount that you
subscribed for: (a) through your 401(k) Plan account and (b) through your sources of funds outside
of the 401(k) Plan. Whether you place an order through the 401(k) Plan, outside the 401(k) Plan,
or both, the number of shares of Athens Bancshares common stock, if any, that you receive will be
determined based on the total number of subscriptions, your purchase priority and the allocation
priorities described in the prospectus. If, as a result of the calculation, you are allocated
insufficient shares to fill all of your orders, available shares will be allocated between orders
on a pro rata basis.
Value of Participation Interests
As of September 14, 2009, the market value of the 401(k) Plan assets equaled approximately
$5,265,332. The plan administrator has distributed quarterly statements to each participant
reflecting the value of his or her beneficial interest in the 401(k) Plan as of June 30, 2009. The
value of the 401(k) Plan assets represents past contributions made to the 401(k) Plan on your
behalf, plus or minus earnings or losses on the contributions, less previous withdrawals.
Method of Directing Transfer
In order to facilitate your investment in the Athens Bancshares Stock Fund in connection with
the Stock Offering, you must complete, sign and submit the
blue
form included with this prospectus
supplement (the "Investment Form"). In order to invest in the Athens Bancshares Stock Fund, you
must direct the 401(k) Plan trustee to transfer a percentage of your beneficial interest in the
assets of the 401(k) Plan to the Athens Bancshares Stock Fund (in multiples of not less than 1%).
If you do not wish to invest in the Athens Bancshares Stock Fund at this time, you do not need to
take any action. The minimum investment in the Athens Bancshares Stock Fund during the Stock
Offering is $25 and the maximum individual investment is $ ___________.
Your blue Investment Form must
be received by __________________ by noon on __________________, 200_.
Time for Directing Transfer
The deadline to submit your Investment Form to __________________ is 12:00 noon, local time, on
____________________, 200_,
unless extended by Athens Federal.
If you have any questions regarding
the Athens Bancshares Stock Fund, you can call ________________ at (_____) ______________.
Irrevocability of Transfer Direction
Once you have submitted your Investment Form, you cannot change your direction to transfer
amounts credited to your account in the 401(k) Plan to the Athens Bancshares Stock Fund. Following
the closing of the Stock Offering and the initial purchase of shares in the Athens Bancshares Stock
Fund, you will again have complete access to any funds you directed towards the purchase of shares
of Athens Bancshares common stock in the Stock Offering. Special restrictions may apply to
transfers directed to and from the Athens Bancshares Stock Fund by participants who are subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended. See
"SEC Reporting and
Short-Swing Profit Liability"
.
Purchase Price of Athens Bancshares Corporation Common Stock
The trustee will use the funds transferred to the Athens Bancshares Stock Fund to purchase
shares of Athens Bancshares common stock in the Stock Offering. The Athens Bancshares Stock Fund
trustee will pay the same price for shares of Athens Bancshares common stock as all other persons
who purchase
2
Table of Contents
shares of Athens Bancshares common stock in the Stock Offering. If there is not enough common
stock available in the Stock Offering to fill all subscriptions, the common stock will be
apportioned and the trustee may not be able to purchase all of the common stock you requested. If
the Stock Offering is oversubscribed and your order is cut back, your 401(k) Plan funds (which are
not invested in Athens Bancshares common stock) will be reinvested in accordance with the
investment elections that you have in place for your elective deferrals.
Nature of a Participant's Interest in Athens Bancshares Corporation Common Stock
The trustee will hold Athens Bancshares common stock in the name of the 401(k) Plan. The
trustee will credit shares of Athens Bancshares common stock acquired at your direction to your
account under the 401(k) Plan.
Voting and Tender Rights of Athens Bancshares Corporation Common Stock
The 401(k) Plan trustee will exercise voting and tender rights attributable to all Athens
Bancshares common stock held in the Athens Bancshares Stock Fund, as directed by participants with
interests in the Athens Bancshares Stock Fund. With respect to each matter as to which holders of
Athens Bancshares common stock have a right to vote, you will have voting instruction rights that
reflect your proportionate interest in the Athens Bancshares Stock Fund. The number of shares of
Athens Bancshares common stock held in the Athens Bancshares Stock Fund voted for and against each
matter will be proportionate to the number of voting instruction rights exercised. If there is a
tender offer for Athens Bancshares common stock, the 401(k) Plan allots each participant a number
of tender instruction rights reflecting the participant's proportionate interest in the Athens
Bancshares Stock Fund. The percentage of shares of Athens Bancshares common stock held in the
Athens Bancshares Stock Fund that will be tendered will be the same as the percentage of the total
number of tender instruction rights exercised in favor of the tender offer. The remaining shares
of Athens Bancshares common stock held in the Athens Bancshares Stock Fund will not be tendered.
The 401(k) Plan provides that participants will exercise their voting instruction rights and tender
instruction rights on a confidential basis.
DESCRIPTION OF THE 401(k) PLAN
Introduction
Athens Federal adopted the amended and restated 401(k) Plan effective _________________, 200_.
Athens Federal intends for the 401(k) Plan to comply, in form and in operation, with all applicable
provisions of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Athens Federal may change the 401(k) Plan from time to time in the future to
ensure continued compliance with these laws. Athens Federal may also amend the 401(k) Plan from
time to time in the future to add, modify, or eliminate certain features of the plan, as it sees
fit. Federal law provides you with various rights and protections as a participant in the 401(k)
Plan, which is governed by ERISA. However, the Pension Benefit Guaranty Corporation does not
guarantee your benefits under the 401(k) Plan.
Reference to Full Text of the Plan.
The following portions of this prospectus supplement
summarize the material provisions of the 401(k) Plan. Athens Federal qualifies this summary in its
entirety by reference to the full text of the 401(k) Plan. You may obtain copies of the 401(k)
Plan document, including any amendments to the plan and a summary plan description, by contacting
__________________ at (______) _____________. You should carefully read the 401(k) Plan documents to understand
your rights and obligations under the 401(k) Plan.
3
Table of Contents
Eligibility and Participation
As a regular full time or part time employee of Athens Federal, you are eligible to commence
participation in the 401(k) Plan as of the first Plan entry date following your employment. The
Plan entry dates are the 1
st
day of each month.
As of September 14, 2009, all eligible employees of Athens Federal actively participated in
the 401(k) Plan.
Contributions Under the 401(k) Plan
Employee Pre-Tax Salary Deferrals.
Subject to certain Internal Revenue Service limitations,
the 401(k) Plan permits you to make pre-tax salary deferrals each payroll period of up to 75% of
your compensation. Compensation is defined for purposes of the 401(k) Plan as each participant's
Box 1, form W-2 compensation. In addition to pre-tax salary deferrals, you may make "catch up"
contributions if you are currently age 50 or will be 50 before the end of the calendar year. You
are always 100% vested in your elective deferrals.
Athens Federal Safe Harbor Matching Contributions.
The 401(k) Plan provides that Athens
Federal will make matching contributions on behalf of each eligible participant with respect to
each eligible participant's elective deferrals. If you elect to defer funds into the 401(k) Plan,
Athens Federal will match 100% of your elective deferrals up to 6% of your compensation. Athens
Federal makes matching contributions only to those participants who actively defer a percentage of
their compensation into the 401(k) Plan.
Safe Harbor Basic Contributions.
The 401(k) Plan provides that Athens Federal may make
additional employer contributions under the Plan. Currently, Athens Federal makes a monthly safe
harbor basic contribution to the 401(k) Plan on behalf of each participant equal to 3% of each
participant's compensation. Participants vest in their basic contributions at a rate of
33
1
/
3
% each
year after two years of service.
Rollover Contributions.
Athens Federal allows employees who receive a distribution from a
previous employer's tax-qualified employee benefit plan to deposit that distribution into a
Rollover Contribution account under the 401(k) Plan, provided the rollover contribution satisfies
IRS requirements. For additional information on Rollover Contributions see the Summary Plan
Description for the 401(k) Plan.
Limitations on Contributions
Limitation on Employee Salary Deferrals.
By law, your total deferrals under the 401(k) Plan,
together with similar plans, may not exceed $16,500 for 2009. Eligible employees who are age 50
and over may also make additional "catch-up" contributions to the plan, up to a maximum of $5,500
for 2009. The Internal Revenue Service periodically increases these limitations. An eligible
participant who exceeds these limitations must include any excess deferrals in gross income for
federal income tax purposes in the year of deferral. In addition, the participant must pay federal
income taxes on any excess deferrals when distributed by the 401(k) Plan to the participant, unless
the plan distributes the excess deferrals and any related income no later than the first April 15th
following the close of the taxable year in which the participant made the excess deferrals. Any
income on excess deferrals distributed before such date is treated, for federal income tax
purposes, as earned and received by the participant in the taxable year of the distribution.
4
Table of Contents
Limitation on Annual Additions and Benefits.
As required by the Internal Revenue Code, the
401(k) Plan provides that the total amount of contributions and forfeitures (annual additions)
credited to a participant during any year under all defined contribution plans of Athens Federal
(including the 401(k) Plan and the proposed Athens Federal Community Bank Employee Stock Ownership
Plan) may not exceed the lesser of 100% of the participant's annual compensation or $49,000 for
2009.
Limitation on Plan Contributions for Highly Compensated Employees.
Special provisions of the
Internal Revenue Code limit the amount of pre-tax and matching contributions that may be made to
the 401(k) Plan in any year on behalf of highly compensated employees, in relation to the amount of
pre-tax and matching contributions made by or on behalf of all other employees eligible to
participate in the 401(k) Plan. If pre-tax and matching contributions exceed these limitations,
the plan must adjust the contribution levels for highly compensated employees.
In general, a highly compensated employee includes any employee who (1) was a 5% owner of the
sponsoring employer at any time during the year or the preceding year, or (2) had compensation for
the preceding year in excess of $110,000 and, if the sponsoring employer so elects, was in the top
20% of employees by compensation for such year. The preceding dollar amount applies for 2009 and
may be adjusted periodically by the Internal Revenue Service .
Top-Heavy Plan Requirements.
If the 401(k) Plan is a Top-Heavy Plan for any calendar year,
Athens Federal may be required to make certain minimum contributions to the 401(k) Plan on behalf
of non-key employees. In general, the 401(k) Plan will be treated as a "Top-Heavy Plan" for any
calendar year if, as of the last day of the preceding calendar year, the aggregate balance of the
accounts of "Key Employees" exceeds 60% of the aggregate balance of the accounts of all employees
under the plan. A Key Employee is generally any employee who, at any time during the calendar year
or any of the four preceding years, is:
(1)
an officer of Athens Federal whose annual compensation exceeds $145,000;
(2)
a 5% owner of the employer, meaning an employee who owns more than 5% of the
outstanding stock of Athens Bancshares, or who owns stock that possesses more than 5%
of the total combined voting power of all stock of Athens Bancshares; or
(3)
a 1% owner of the employer, meaning an employee who owns more than 1% of the
outstanding stock of Athens Bancshares, or who owns stock that possesses more than 1%
of the total combined voting power of all stock of Athens Bancshares,
and
whose annual
compensation exceeds $150,000.
The foregoing dollar amounts are for 2009.
5
Table of Contents
401(k) Plan Investments
Effective October 1, 2009, the 401(k) Plan offers the following investment choices:
Annual Rates of Return as of
December 31,
Fund Name
2008
2007
2006
S&P 500 Stock Fund
Stable Value Fund
S&P MidCap Stock Fund
Short Term Investment Fund
International Stock Fund
Growth Index Fund
Value Index Fund
Russell 2000 Stock Fund
NASDAQ 100 Stock Fund
U.S. REIT Index Fund
Target Retirement Income
Target Retirement Funds (4)
Aggregate Bond Index Fund
Government Short Term Investment Fund
Treasury Inflation Protection Fund
[INSERT DESCRIPTION OF FUNDS]
Stock Fund.
In connection with the Stock Offering, Athens Federal has added the Athens Bancshares Stock
Fund as an additional choice to the investment alternatives described above. The Athens Bancshares
Stock Fund invests primarily in the common stock of Athens Bancshares. Participants in the 401(k)
Plan may direct the 401(k) Plan trustee to invest all or a portion of their 401(k) Plan account
balances in the Athens Bancshares Stock Fund during the Stock Offering.
The Athens Bancshares Stock Fund consists of investments in the common stock of Athens
Bancshares made on the closing date of the Stock Offering. Your investment in the Athens
Bancshares Stock Fund will be recorded using the
unitized accounting
method. If cash dividends are
paid on Athens Bancshares common stock, the trustee will, to the extent practicable, use the
dividends held in the Athens Bancshares Stock Fund to purchase shares of the common stock. Pending
investment in the common stock, assets held in the Athens Bancshares Stock Fund will be placed in
the short term investment component of the Athens Bancshares Stock Fund. The Stock Fund will
maintain a 3-5% cash ratio target following the Stock Offering.
As of the date of this prospectus supplement, no shares of Athens Bancshares common stock have
been issued or are outstanding, and there is no established market for Athens Bancshares common
stock. Accordingly, there is no record of the historical performance of the Athens Bancshares
Stock Fund. Performance of the Athens Bancshares Stock Fund depends on a number of factors,
including the
6
Table of Contents
financial condition and profitability of Athens Federal and general stock market conditions. See
"Risk Factors"
in the attached prospectus.
Once you have submitted your Investment Form, you may not change your investment directions in
the Stock Offering.
Benefits Under the 401(k) Plan
Vesting.
All participants are 100% vested in their pre-tax elective deferrals and safe harbor
employer matching contributions. This means that participants have a non-forfeitable right to
these funds and any earnings on the funds at all times. Participants vest in their safe harbor
basic contribution at a rate of 33
1
/
3
% each year after two years of service.
Withdrawals and Distributions from the 401(k) Plan
Withdrawals Before Termination of Employment.
While in active service, participants may take
[___] loans from the 401(k) Plan per plan year (subject to the restrictions set forth in the
401(k) Plan and the Athens Federal loan policy). A participant may also take [___] hardship
withdrawal per plan year, provided the participant has a hardship event as defined by the Internal
Revenue Service regulations and subject to approval by the Plan Administrator.
Distribution Upon Retirement, Death or Disability.
If a participant's accounts are $1,000 or
less upon termination of employment, payment will be in the form of a lump sum as of a valuation
date as soon thereafter as administratively possible. If a participant's accounts exceed $1,000
upon termination of employment, and the participant does not elect to have his/her distribution
paid, payment will be in the form of a Direct Rollover to an individual retirement plan designated
by the Plan Administrator.
Distribution Upon Termination for Any Other Reason.
If a participant's accounts are $1,000 or
less upon termination of employment, payment will be in the form of a lump sum as of a valuation
date as soon thereafter as administratively possible. If a participant's accounts exceed $1,000
upon termination of employment, and the participant does not elect to have his/her distribution
paid, payment will be in the form of a Direct Rollover to an individual retirement plan designated
by the Plan Administrator.
Nonalienation of Benefits.
Except with respect to federal income tax withholding, and as
provided for under a qualified domestic relations order, benefits payable under the 401(k) Plan
will not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary,
and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any rights to benefits payable under the 401(k) Plan will be void.
Applicable federal tax law requires the
401(k)
Plan to impose substantial restrictions on your
right to withdraw amounts held under the
401(k)
Plan before your termination of employment with
Athens Federal. Federal law may also impose an excise tax on withdrawals from the
401(k)
Plan
before you attain 59
1
/
2
years of age, regardless of whether the withdrawal occurs during your
employment with Athens Federal or after termination of employment.
7
Table of Contents
ADMINISTRATION OF THE 401(k) PLAN
Trustees
The board of directors of Athens Federal has appointed Pentegra Trust Company to serve as
trustee for the 401(k) Plan. The Reliance Trust Company serves as the custodian of all of the
Plan assets. The trustees receive, hold and invest the contributions to the 401(k) Plan in trust
and distribute them to participants and beneficiaries in accordance with the terms of the 401(k)
Plan and the directions of the Plan Administrator. The trustees are responsible for the investment
of the trust assets, as directed by the Plan Administrator and the participants.
Reports to 401(k) Plan Participants
The Plan Administrator furnishes participants quarterly statements that show the balance in
their accounts as of the statement date, contributions made to their accounts during that period
and any additional adjustments required to reflect earnings or losses.
Plan Administrator
Athens Federal currently acts as Plan Administrator for the 401(k) Plan. The Plan
Administrator handles the following administrative functions: interpreting the provisions of the
plan, prescribing procedures for filing applications for benefits, preparing and distributing
information explaining the plan, maintaining plan records, books of account and all other data
necessary for the proper administration of the plan, preparing and filing all returns and reports
required by the U.S. Department of Labor and the IRS and making all required disclosures to
participants, beneficiaries and others under ERISA.
Amendment and Termination
Athens Federal expects to continue the 401(k) Plan indefinitely. Nevertheless, Athens Federal
may terminate the 401(k) Plan at any time. If Athens Federal terminates the 401(k) Plan in whole
or in part, all affected participants become fully vested in their accounts, regardless of other
provisions of the 401(k) Plan. Athens Federal reserves the right to make, from time to time,
changes which do not cause any part of the trust to be used for, or diverted to, any purpose other
than the exclusive benefit of participants or their beneficiaries. Athens Federal may amend the
plan, however, as necessary or desirable, in order to comply with ERISA or the Internal Revenue
Code.
Merger, Consolidation or Transfer
If the 401(k) Plan merges or consolidates with another plan or transfers the trust assets to
another plan, and either the 401(k) Plan or the other plan is subsequently terminated, the 401(k)
Plan requires that you receive a benefit immediately after the merger, consolidation or transfer
that would equal or exceed the benefit you would have been entitled to receive immediately before
the merger, consolidation or transfer, if the 401(k) Plan had terminated at that time.
Federal Income Tax Consequences
The following briefly summarizes the material federal income tax aspects of the 401(k) Plan.
You should not rely on this summary as a complete or definitive description of the material federal
income tax consequences of the 401(k) Plan. Statutory provisions change, as do their
interpretation, and
8
Table of Contents
their application may vary in individual circumstances. Finally, applicable state and local income
tax laws may have different tax consequences than the federal income tax laws.
401(k) Plan
participants should consult a tax advisor with respect to any transaction involving the 401(k)
Plan, including any distribution from the 401(k) Plan.
As a "tax-qualified retirement plan," the Internal Revenue Code affords the 401(k) Plan
certain tax advantages, including the following:
(1)
the sponsoring employer may take an immediate tax deduction for the amount
contributed to the plan each year;
(2)
participants pay no current income tax on amounts contributed by the employer
on their behalf; and
(3)
earnings of the plan are tax-deferred, thereby permitting the tax-free
accumulation of income and gains on investments.
Athens Federal administers the 401(k) Plan to comply in operation with the requirements of the
Internal Revenue Code as of the applicable effective date of any change in the law. If Athens
Federal should receive an adverse determination letter from the Internal Revenue Service regarding
the 401(k) Plan's tax exempt status, all participants would generally recognize income equal to
their vested interests in the 401(k) Plan, the participants would not be permitted to transfer
amounts distributed from the 401(k) Plan to an Individual Retirement Account or to another
qualified retirement plan, and Athens Federal would be denied certain tax deductions taken in
connection with the 401(k) Plan.
Lump Sum Distribution.
A distribution from the 401(k) Plan to a participant or the
beneficiary of a participant qualifies as a lump sum distribution if it is made within one taxable
year, on account of the participant's death, disability or separation from service, or after the
participant attains age 59
1
/
2
; and consists of the balance credited to the participant under this
plan and all other profit sharing plans, if any, maintained by Athens Federal. The portion of any
lump sum distribution included in taxable income for federal income tax purposes consists of the
entire amount of the lump sum distribution, less the amount of after-tax contributions, if any,
made to any other profit-sharing plans maintained by Athens Federal, if the distribution includes
those amounts.
Athens Bancshares Common Stock Included in Lump Sum Distribution.
If a lump sum distribution
includes Athens Bancshares common stock, the distribution generally is taxed in the manner
described above. The total taxable amount is reduced, however, by the amount of any net unrealized
appreciation on Athens Bancshares common stock; that is, the excess of the value of Athens
Bancshares common stock at the time of the distribution over the cost or other basis of the
securities to the trust. The tax basis of Athens Bancshares common stock, for purposes of
computing gain or loss on a subsequent sale, equals the value of Athens Bancshares common stock at
the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent
sale or other taxable disposition of Athens Bancshares common stock, to the extent of the net
unrealized appreciation at the time of distribution, is long-term capital gain, regardless of how
long you hold the Athens Bancshares common stock, or the "holding period." Any gain on a
subsequent sale or other taxable disposition of Athens Bancshares common stock that exceeds the
amount of net unrealized appreciation upon distribution is considered long-term capital gain,
regardless of the holding period. The recipient of a distribution may elect to include the amount
of any net unrealized appreciation in the total taxable amount of the distribution, to the extent
allowed under IRS regulations.
9
Table of Contents
We have provided you with a brief description of the material federal income tax aspects of
the
401(k)
Plan that are generally applicable under the Internal Revenue Code. We do not intend
this description to be a complete or definitive description of the federal income tax consequences
of participating in or receiving distributions from the
401(k)
Plan. Accordingly, you should
consult a tax advisor concerning the federal, state and local tax consequences of participating in
and receiving distributions from the
401(k)
Plan.
Restrictions on Resale
Any "affiliate" of Athens Bancshares under Rules 144 and 405 of the Securities Act of 1933, as
amended, who receives a distribution of common stock under the 401(k) Plan, may re-offer or resell
such shares only under a registration statement filed under the Securities Act of 1933, as amended,
assuming the availability of a registration statement, or under Rule 144 or some other exemption
from these registration requirements. An "affiliate" of Athens Bancshares is someone who directly
or indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, Athens Bancshares. Generally, a director, principal officer or major shareholder of
a corporation is deemed to be an "affiliate" of that corporation.
Any person who may be an "affiliate" of Athens Bancshares may wish to consult with counsel
before transferring any common stock they own. In addition, participants should consult with
counsel regarding the applicability to them of Section 16 of the Securities Exchange Act of 1934,
as amended, which may restrict the sale of Athens Bancshares common stock acquired under the 401(k)
Plan or other sales of Athens Bancshares common stock.
Persons who are
not
deemed to be "affiliates" of Athens Bancshares at the time of resale may
resell freely any shares of Athens Bancshares common stock distributed to them under the 401(k)
Plan, either publicly or privately, without regard to the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended, or compliance with the restrictions and
conditions contained in the exemptions available under federal law. A person deemed an "affiliate"
of Athens Bancshares at the time of a proposed resale may publicly resell common stock only under a
"re-offer" prospectus or in accordance with the restrictions and conditions contained in Rule 144
of the Securities Act of 1933, as amended, or some other exemption from registration, and may not
use this prospectus supplement or the accompanying prospectus in connection with any such resale.
In general, Rule 144 restricts the amount of common stock which an affiliate may publicly resell in
any three-month period to the greater of one percent of Athens Bancshares common stock then
outstanding or the average weekly trading volume reported on the Nasdaq Capital Market during the
four calendar weeks before the sale. Affiliates may sell only through brokers without solicitation
and only at a time when Athens Bancshares is current in filing all required reports under the
Securities Exchange Act of 1934, as amended.
SEC Reporting and Short-Swing Profit Liability
Section 16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability
requirements on officers, directors and persons who beneficially own more than 10% of public
companies such as Athens Bancshares. Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the filing of reports of beneficial ownership. Within ten days of becoming a
person required to file reports under Section 16(a), such person must file a Form 3 reporting
initial beneficial ownership with the Securities and Exchange Commission ("SEC"). Such persons
must also report periodically certain changes in beneficial ownership involving the allocation or
reallocation of assets held in their 401(k) Plan accounts, either on a Form 4 within two business
days after a transaction, or annually on a Form 5 within 45 days after the close of a company's
fiscal year.
10
Table of Contents
In addition to the reporting requirements described above, Section 16(b) of the Securities
Exchange Act of 1934, as amended, provides for the recovery by Athens Bancshares of profits
realized from the purchase and sale or sale and purchase of its common stock within any six-month
period by any officer, director or person who beneficially owns more than 10% of the common stock.
The SEC has adopted rules that exempt many transactions involving the 401(k) Plan from the
"short-swing" profit recovery provisions of Section 16(b). The exemptions generally involve
restrictions upon the timing of elections to buy or sell employer securities for the accounts of
any officer, director or person who beneficially owns more than 10% of the common stock of a
company.
Except for distributions of the common stock due to death, disability, retirement, termination
of employment or under a qualified domestic relations order, persons who are subject to Section
16(b) may be required, under limited circumstances involving the purchase of common stock within
six months of the distribution, to hold the shares of common stock distributed from the 401(k) Plan
for six months after the distribution date.
LEGAL OPINION
The validity of the issuance of the common stock of Athens Bancshares will be passed upon by
Kilpatrick Stockton LLP, Washington, DC. Kilpatrick Stockton LLP acted as special counsel for
Athens Bancshares in connection with the Stock Offering.
11
Table of Contents
PROSPECTUS
Athens Bancshares Corporation
(Proposed Holding Company for Athens Federal Community Bank)
Up to 2,085,000 Shares of Common Stock
Athens Bancshares Corporation is offering shares of its common stock for sale in connection
with the conversion of Athens Federal Community Bank from the mutual to the stock form of
ownership. After the offering, Athens Bancshares Corporation will be the holding company for
Athens Federal Community Bank through its ownership of 100% of Athens Federal Community Bank's
outstanding common stock. We also intend to establish a charitable foundation in connection with
the conversion and contribute 100,000 shares of our common stock and $100,000 in cash to the
charitable foundation. We have received conditional approval to list our common stock on the
Nasdaq Capital Market under the symbol "AFCB."
If you are or were a depositor of Athens Federal Community Bank:
•
You may have priority rights to purchase shares of common stock.
If you are a participant in the Athens Federal Community Bank 401(k) Plan:
•
You may direct that all or part of your current account balance in this plan be
invested in shares of common stock.
•
You will receive a separate supplement to this prospectus that describes your rights
under this plan.
If you fit neither of the categories above, but are interested in purchasing shares of our
common stock:
•
You may have an opportunity to purchase shares of common stock after priority orders
are filled.
We are offering up to 2,085,000 shares of common stock for sale on a best efforts basis,
subject to certain conditions. We must sell a minimum of 1,515,000 shares to complete the
offering. If, as a result of regulatory considerations, demand for the shares or changes in market
conditions, the independent appraiser determines that our market value has increased, we may sell
up to 2,412,750 shares without giving you further notice or the opportunity to change or cancel
your order. The offering is expected to close at ___:___ p.m., Eastern time, on ____________. We
may extend this closing date without notice to you until __________, unless the Office of
Thrift Supervision approves a later date, which will not be beyond _______________.
Keefe, Bruyette & Woods, Inc. will use its best efforts to assist us in our selling efforts,
but is not required to purchase any of the common stock that is being offered for sale. Purchasers
will not pay a commission to purchase shares of common stock in the offering. All shares offered
for sale are offered at a price of $10.00 per share.
The minimum purchase is 25 shares. Once submitted, orders are irrevocable unless the offering
is terminated or extended beyond ____________. If the offering is extended beyond ____________,
subscribers will have the right to modify or rescind their purchase orders. Funds received before
the completion of the offering will be maintained in a segregated account at Athens Federal
Community Bank or, at our discretion, at another federally insured depository institution. All
funds received will bear interest at Athens Federal Community Bank's passbook savings rate, which
is currently 0.3% per annum. If we terminate the offering for any reason, or if we extend the
offering beyond _____________, we will notify you and will promptly return your funds with
interest if you do not respond to the notice.
We expect our directors and executive officers, together with their associates, to subscribe
for 293,750 shares, which equals 19.4% of the shares offered for sale at the minimum of the
offering range.
The Office of Thrift Supervision conditionally approved our plan of conversion on
____________. However, such approval does not constitute a recommendation or endorsement of
this offering.
This investment involves a degree of risk, including the possible loss of principal.
Please read "Risk Factors" beginning on page ____.
OFFERING SUMMARY
Price Per Share: $10.00
Maximum
Minimum
Maximum
As Adjusted
Number of shares
1,515,000
2,085,000
2,412,750
Gross offering proceeds
$
15,150,000
$
20,850,000
$
24,127,500
Estimated offering expenses, excluding selling agent fees and expenses
$
920,000
$
920,000
$
920,000
Estimated selling agent fees and expenses
(1)
$
260,000
$
260,000
$
260,000
Estimated net proceeds
$
13,970,000
$
19,670,000
$
22,947,500
Estimated net proceeds per share
$
9.22
$
9.43
$
9.51
(1)
Excludes fees payable if a syndicated community offering is held. For a
discussion of the compensation of Keefe, Bruyette & Woods, Inc., see
"The Conversion and
Stock Offering — Marketing Arrangements."
These securities are not deposits or savings accounts and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Neither the Securities and Exchange Commission, the Office of Thrift Supervision nor any state
securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
For assistance, please contact the stock information center at (___) ___-_________.
Keefe, Bruyette & Woods
The date of this prospectus is ________________, 2009
Table of Contents
[Map of Tennessee showing office locations of Athens Federal Community Bank]
Table of Contents
TABLE OF CONTENTS
PAGE
Summary
1
Risk Factors
13
A Warning About Forward-Looking Statements
21
Selected Consolidated Financial and Other Data
22
Use of Proceeds
24
Our Dividend Policy
26
Market for the Common Stock
27
Capitalization
28
Regulatory Capital Compliance
30
Pro Forma Data
31
Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation
37
Our Business
38
Management's Discussion and Analysis of Financial Condition and Results of Operations
47
Our Management
74
Subscriptions by Executive Officers and Directors
84
Regulation and Supervision
85
Federal and State Taxation
93
The Conversion and Stock Offering
95
Athens Federal Foundation
112
Restrictions on the Acquisition of Athens Bancshares Corporation and Athens Federal Community Bank
115
Description of Athens Bancshares Corporation Capital Stock
122
Transfer Agent and Registrar
123
Registration Requirements
123
Legal and Tax Opinions
123
Experts
123
Where You Can Find More Information
124
Index to Consolidated Financial Statements of Athens Federal Community Bank
125
i
Table of Contents
Summary
This summary highlights selected information from this document and may not contain all the
information that is important to you. To understand the stock offering fully, you should read this
entire document carefully.
The Companies
Athens Bancshares Corporation
Athens Federal Community Bank
106 Washington Avenue
Athens, Tennessee 37303
(423) 745-1111
Athens Bancshares Corporation
This offering is made by Athens Bancshares Corporation, a
Tennessee corporation incorporated in September 2009 by Athens Federal Community Bank to be its
holding company. Currently, Athens Bancshares Corporation has no assets. Following the
conversion, Athens Bancshares Corporation will own all of Athens Federal Community Bank's capital
stock and will direct, plan and coordinate Athens Federal Community Bank's business activities. In
the future, Athens Bancshares Corporation might also acquire or organize other operating
subsidiaries, including other financial institutions or financial services companies, although it
currently has no specific plans or agreements to do so.
Athens Federal Community Bank.
Athens Federal Community Bank operates as a community-oriented
financial institution, with seven full-service offices in its primary market area, which
encompasses McMinn, Monroe and Bradley Counties in Tennessee and the surrounding areas. We offer a
variety of deposit products and provide residential mortgage loans and, to a lesser extent,
non-residential real estate loans, construction loans, land and land development loans,
multi-family real estate loans, consumer loans and commercial business loans to borrowers generally
located within our primary market area. At June 30, 2009, we had total assets of $243.0 million,
total deposits of $202.9 million and total equity of $25.3 million.
Our predominant lending activity has been residential mortgage lending in our primary market
area. In recent years, a significant portion of the residential mortgage loans that we have
originated have been secured by non-owner occupied properties. Loans secured by non-owner occupied
properties generally carry a greater risk of loss than loans secured by owner-occupied properties.
See
"Risk Factors — Risks Related to Our Business — Our concentration in non-owner occupied real
estate loans may expose us to increased credit risk."
Our Operating Strategy (page ___)
Our mission is to operate and grow a profitable community-oriented financial institution. We
plan to achieve this by executing our strategy of:
•
remaining a community-oriented financial institution;
•
continuing our historical focus on residential mortgage lending;
•
expanding our commercial real estate and multi-family lending activities;
•
emphasizing lower cost core deposits to maintain low funding costs; and
•
expanding our market share within our primary market area.
1
Table of Contents
The Conversion
Description of the Conversion
Currently, we are a federally chartered mutual savings bank with no shareholders. Our
depositors currently have the right to vote on certain matters such as the election of directors
and this conversion transaction. The conversion transaction that we are undertaking involves a
change from our mutual form to a stock savings bank that will result in all of Athens Federal
Community Bank's capital stock being owned by Athens Bancshares Corporation. Voting rights in
Athens Bancshares Corporation will belong to its shareholders, including our employee stock
ownership plan and our charitable foundation. For more information on the charitable foundation
and the employee stock ownership plan, see
"Summary—We Will Form the Athens Federal Foundation"
and
"Summary—Benefits of the Offering to Management—Employee Stock Ownership Plan."
We are
conducting the conversion under the terms of our plan of conversion. The Office of Thrift
Supervision has conditionally approved the plan of conversion, including a condition that it be
approved by our members. We have called a special meeting of members for
to vote
on the plan of conversion.
The following diagram depicts our corporate structure after the conversion and offering:
Regulation and Supervision (page ____)
We are, and Athens Bancshares Corporation will be upon completion of the conversion, subject
to regulation, supervision and examination by the Office of Thrift Supervision. We are also
subject to regulation by the Federal Deposit Insurance Corporation.
2
Table of Contents
The Offering
Purchase Price
The purchase price is $10.00 per share. You will not pay a commission to buy any shares in
the offering.
Number of Shares to be Sold
We are offering for sale between 1,515,000 and 2,085,000 shares of Athens Bancshares
Corporation common stock in this offering. With regulatory approval, we may increase the number of
shares to be sold to 2,412,750 shares without giving you further notice or the opportunity to
change or cancel your order. In considering whether to increase the offering size, the Office of
Thrift Supervision will consider the level of subscriptions, the views of our independent
appraiser, our financial condition and results of operations and changes in market conditions.
How We Determined the Offering Range (page ____)
We are offering between 1,515,000 and 2,085,000 shares, which is our offering range, based on
an independent appraisal of our pro forma market value prepared by Keller & Company, Inc., an
independent appraisal firm experienced in appraisals of financial institutions. Keller & Company
estimates that as of August 19, 2009, our offering range was between $15.2 million and $20.9
million, with a midpoint of $18.0 million, and that our pro forma market value was between $16.2
million and $21.9 million, with a midpoint of $19.0 million, inclusive of shares to be issued to
the charitable foundation.
In preparing its appraisal, Keller & Company considered the information in this prospectus,
including our consolidated financial statements. Keller & Company also considered the following
factors, among others:
•
our historical, present and projected operating results and financial condition and
the economic and demographic characteristics of our primary market area;
•
a comparative evaluation of the operating and financial statistics of Athens Federal
Community Bank with those of other similarly situated, publicly traded companies;
•
the effect of the capital raised in this offering on our net worth and earnings
potential;
•
the trading market for securities of comparable institutions and general conditions
in the market for such securities; and
•
our intention to contribute to the Athens Federal Foundation 100,000 shares of
Athens Bancshares Corporation's common stock and $100,000 in cash in connection with
the conversion.
Two measures that some investors use to analyze whether a stock might be a good investment are
the ratio of the offering price to the issuer's "book value" and the ratio of the offering price
per share to the issuer's core income per share for the past twelve months. Keller & Company
considered these ratios, among other factors, in preparing its appraisal. Book value is the same
as total equity and represents the difference between the issuer's assets and liabilities. For
purposes of the appraisal, core earnings is defined as net earnings after taxes, plus non-recurring
expenses and minus non-recurring income, adjusted for income taxes in each case. Keller &
Company's appraisal also incorporates an analysis of a peer group of publicly traded companies that
Keller & Company considered to be comparable to us.
3
Table of Contents
The following table presents a summary of selected pricing ratios for the peer group companies
and for us utilized by Keller & Company in its appraisal. These ratios are based on our earnings
for the twelve months ended June 30, 2009 and book value as of June 30, 2009 and the latest date
for which complete financial data is publicly available for the peer group.
Price to Core
Price to Book
Earnings Multiple
Value Ratio
Athens Bancshares Corporation (pro forma):
Minimum
8.97x
42.91
%
Midpoint
10.73
47.33
Maximum
12.55
51.23
Maximum, as adjusted
14.72
55.18
Peer group companies as of August 19, 2009:
Average
13.06x
63.12
%
Median
12.82
60.39
Compared to the price to book value ratio of the peer group at the maximum of the offering
range, our stock would be priced at a discount of 23.5% to the peer group on a price-to-book basis.
The independent appraisal does not indicate market value. You should not assume or expect
that the valuation described above means that our common stock will trade at or above the $10.00
purchase price after the offering.
Possible Change in Offering Range (page ____)
Keller & Company will update its appraisal before we complete the stock offering. If, as a
result of regulatory considerations, demand for the shares or changes in market conditions, Keller
& Company determines that our pro forma market value has increased, we may sell up to 2,412,750
shares without further notice to you. If our pro forma market value at the end of the stock
offering period is either below $16.2 million or above $25.1 million, then, after consulting with
the Office of Thrift Supervision, we may: (i) terminate the stock offering and promptly return all
funds, with interest; (ii) set a new offering range and give all subscribers the opportunity to
confirm, modify or rescind their purchase orders for shares of Athens Bancshares Corporation's
common stock; or (iii) take such other actions as may be permitted by the Office of Thrift
Supervision and the Securities and Exchange Commission.
Possible Termination of the Offering
We must sell a minimum of 1,515,000 shares to complete the offering. If we do not sell the
minimum number of shares, or if we terminate the offering for any other reason, we will promptly
return all funds, with interest, at our current passbook rate.
After-Market Performance of Mutual-to-Stock Conversions
The appraisal prepared by Keller & Company includes examples of after-market stock price
performance for standard mutual-to-stock conversion offerings (i.e., excluding "second step"
conversions by mutual holding companies) completed during the 14-month period ended August 19,
2009. The following table presents stock price appreciation information for all standard
mutual-to-stock conversions completed between June 30, 2008 and August 19, 2009. These companies
did not constitute the group of ten comparable public companies utilized in Keller & Company's
valuation analysis.
4
Table of Contents
Percentage Change From Initial Offering Price
Offering
Issuer
Date of
Size (In
After 1
After 1
After 1
Through
(Market/Symbol)
IPO
thousands)
Day
Week
Month
August 19, 2009
Danvers Bancorp, Inc. (DNBK)
01/10/2008
$
171,925
(2.60
)%
(3.10
)%
2.60
%
27.10
%
Cape Bancorp, Inc. (CBNJ) (1)
01/31/2008
78,200
0.50
0.10
(3.00
)
(13.00
)
Home Bancorp, Inc. (HBCP)
09/30/2008
89,269
14.90
9.20
2.40
24.00
First Savings Financial Group,
Inc. (FSFG)
10/07/2008
24,320
(1.00
)
(0.10
)
(8.00
)
1.90
Hibernia Homestead Bancorp, Inc.
(HIBE)
01/28/2009
11,133
0.00
5.00
5.00
40.00
St. Joseph Bancorp, Inc. (SJBA)
02/02/2009
3,769
0.00
0.00
0.00
0.00
Territorial Bancorp Inc. (TBNK)
07/13/2009
122,331
49.90
47.50
48.00
56.00
All Transactions:
Average
71,564
8.81
8.37
6.71
19.43
Median
78,200
0.00
0.10
2.40
24.00
High
171,925
49.90
47.50
48.00
56.00
Low
3,769
(2.60
)
(3.10
)
(8.00
)
(13.00
)
(1)
Simultaneously with its initial public offering, Cape Bancorp, Inc. also issued 5,429,507
shares of common stock to former shareholders of
Boardwalk Bancorp, Inc. in connection with its acquisition of Boardwalk Bancorp, Inc.
This table is not intended to indicate how our stock may perform. Furthermore, this table
presents only short-term price performance with respect to a limited number of companies that have
only recently completed their initial public offerings and may not be indicative of the longer-term
stock price performance of these companies.
Stock price appreciation or depreciation is affected by many factors, including, but not
limited to: general market and economic conditions; the interest rate environment; the amount of
proceeds a company raises in its offering and its ability to successfully deploy those proceeds
through originating loans and making other investments; and numerous factors relating to the
specific company, including the experience and ability of management, historical and anticipated
operating results, the nature and quality of the company's assets, and the company's primary market
area. The companies listed in the table above may not be similar to Athens Bancshares Corporation,
the pricing ratios for their stock offerings were in some cases different from the pricing ratios
for Athens Bancshares Corporation's common stock and the market conditions in which these offerings
were completed were, in some cases, different from current market conditions. Any or all of these
differences may cause our stock to perform differently from these other offerings. Before you make
an investment decision, we urge you to carefully read this prospectus, including, but not limited
to, the section entitled
"Risk Factors."
You also should be aware that, recently, stock prices of some thrift initial public offerings
have decreased once the stock has begun trading. We cannot assure you that our stock will not
trade below the $10.00 purchase price or that our stock will perform similarly to other recent
mutual to stock conversions.
Conditions to Completing the Conversion and Offering
We are conducting the conversion and offering under the terms of our plan of conversion. We
cannot complete the conversion and offering unless:
•
we sell at least the minimum number of shares offered;
•
we receive the final approval of the Office of Thrift Supervision to complete the
offering; and
•
our members approve the plan of conversion.
5
Table of Contents
Reasons for the Conversion and Offering (page ____)
Our primary reasons for the conversion and offering are to:
•
increase the capital of Athens Federal Community Bank to support future lending and
operational growth;
•
enhance profitability and earnings through reinvesting and leveraging the proceeds,
primarily through traditional funding and lending activities;
•
support future branching activities and/or the acquisition of other financial
institutions or financial services companies;
•
implement equity compensation plans to retain and attract qualified directors,
officers and staff to enhance the current incentive-based compensation programs; and
•
increase our philanthropic endeavors to the community we serve through the formation
and funding of the Athens Federal Foundation.
We Will Form the Athens Federal Foundation (page ____)
To continue our long-standing commitment to our local communities, we intend to establish a
charitable foundation, named the Athens Federal Foundation, as part of the conversion. Subject to
separate approval by at least a majority of votes eligible to be cast by members of Athens Federal
Community Bank, the charitable foundation will be funded with 100,000 shares of Athens Bancshares
Corporation common stock and $100,000 in cash. This contribution to the charitable foundation
would reduce net earnings by approximately $726,000, after tax, in the year in which the charitable
foundation is established, which is expected to be late 2009 or early 2010. The charitable
foundation will make grants and donations to non-profit and community groups and projects located
within our primary market area. The amount of common stock that we are offering for sale would be
greater if the conversion were to be completed without the formation of the charitable foundation.
For a further discussion of the financial impact of the charitable foundation, including its effect
on those who purchase shares in the offering and on the shares issued to shareholders of Athens
Bancshares Corporation, see
"Comparison of Independent Valuation and Pro Forma Financial
Information With and Without the Foundation."
Benefits of the Offering to Management (page ____)
We intend to adopt the following benefit plans and employment agreements:
Employee Stock Ownership Plan.
We have adopted an employee stock ownership plan that will
purchase in the conversion offering a number of shares of common stock equal to 8% of the sum of
the shares sold in the offering and contributed to the charitable foundation by means of a 15-year
loan from Athens Bancshares Corporation. As the loan is repaid and shares are released from
collateral, the plan will allocate shares to the accounts of participating employees. Participants
will receive allocations based on their individual compensation as a percentage of total plan
compensation. Non-employee directors are not eligible to participate in the employee stock
ownership plan. We will incur additional compensation expense as a result of this plan. See
"Pro
Forma Data"
for an illustration of the effects of this plan.
Future Equity Incentive Plan.
We intend to implement an equity incentive plan no earlier than
six months after completion of the conversion. If we implement the plan within one year after the
conversion, the plan must be approved by a majority of the total votes eligible to be cast by our
shareholders. If we implement the plan more than one year after the conversion, it must be
approved only by a majority of the total votes cast. Under this plan, we may award stock options
and shares of restricted stock to key employees and directors. We will award shares of restricted
stock at no cost to the recipient. We will grant stock options at an exercise price at least equal
to 100% of the fair market value of our common stock on the option grant date. We will incur
additional compensation expense as a result of this plan. See
"Pro Forma Data"
for an illustration
of the effects of this plan. Under this
6
Table of Contents
plan, we may grant stock options in an amount up to 10% of the sum of the number of shares sold in
the offering and contributed to the charitable foundation, and we may grant awards of restricted
stock in an amount up to 4% of the sum of the number of shares sold in the offering and contributed
to the charitable foundation. The equity incentive plan will comply with all applicable Office of
Thrift Supervision regulations except to the extent waived by the Office of Thrift Supervision.
The following table represents the total value of all shares to be available for restricted
stock awards under the equity incentive plan, based on a range of market prices from $8.00 per
share to $14.00 per share. The value of the grants will depend on the actual trading price of our
common stock at the time of grant.
Value of
100,510
64,600
76,000
87,400
Shares
Shares
Shares
Shares
Awarded at
Awarded at
Awarded at
Awarded at
15% Above
Minimum of
Midpoint of
Maximum of
Maximum of
Share Price
Range
Range
Range
Range
(In thousands, except per share amounts)
$
8.00
$
517
$
608
$
699
$
804
10.00
646
760
874
1,005
12.00
775
912
1,049
1,206
14.00
904
1,064
1,224
1,407
The following table presents the total value of all stock options available for grant under
the equity incentive plan, based on a range of market prices from $8.00 per share to $14.00 per
share. For purposes of this table, the value of the stock options was determined using the
Black-Scholes option-pricing formula. See
"Pro Forma Data."
Financial gains can be realized on a
stock option only if the market price of the common stock increases above the exercise price at
which the option is granted.
Value of
251,275
161,500
190,000
218,500
Options
Options
Options
Options
Granted at
Granted at
Granted at
Granted at
15% Above
Minimum of
Midpoint of
Maximum of
Maximum of
Exercise Price
Option Value
Range
Range
Range
Range
(In thousands, except per share amounts)
$
8.00
$
3.32
536
631
725
834
10.00
4.15
670
789
907
1,043
12.00
4.98
804
946
1,089
1,251
14.00
5.81
938
1,104
1,269
1,460
The following table summarizes at the maximum of the offering range the total number and value
of the shares of common stock that the employee stock ownership plan expects to acquire and the
total value of all restricted stock awards and stock options that are expected to be available
under the equity incentive plan. At the maximum of the offering range, we would sell 2,085,000
shares and have 2,185,000 shares outstanding after accounting for the 100,000 shares of common
stock to be contributed to the charitable foundation. The number of shares reflected for the
benefit plans in the table below assumes that Athens Federal Community Bank's tangible capital will
be 10% or more following the completion of the offering and the application of the net proceeds as
described under
"Use of Proceeds."
7
Table of Contents
Number of Shares to be
Granted or Purchased
As a % of
At Maximum
Common Stock
As a % of
of
Sold at
Common
Offering
Maximum of
Stock
Total Estimated
Range
Offering Range
Outstanding
Value of Grants
Employee stock ownership plan (1)
174,800
8.4
%
8.0
%
$
1,748
Restricted stock awards (1)
87,400
4.2
4.0
874
Stock options (2)
218,500
10.5
10.0
907
Total
480,700
23.1
%
22.0
%
$
3,529
(1)
Assumes the value of Athens Bancshares Corporation common stock is $10.00 per share for
purposes of determining the total estimated value of the grants.
(2)
Assumes the value of a stock option is $4.15, which was determined using the Black-Scholes
option-pricing formula. See
"Pro Forma Data."
Employment Agreements.
Athens Bancshares Corporation and Athens Federal Community Bank intend
to enter into three-year employment agreements with Jeffrey L. Cunningham, our President and Chief
Executive Officer, Michael R. Hutsell, our Vice President, Chief Operating Officer and Chief
Financial Officer, and Jay Leggett, Jr, City President of our Cleveland Division. Based solely on
current cash compensation and excluding any benefits that would be payable under any employee
benefit plan, if a change in control of Athens Bancshares Corporation occurred and we terminated
Messrs. Cunningham, Hutsell and Leggett the total payments due under the employment agreements
would be approximately $
.
The Offering Will Not Be Taxable to Persons Receiving or Exercising Subscription Rights (page ____)
As a general matter, the offering will not be a taxable transaction for purposes of federal
income taxes to persons who receive or exercise subscription rights. We have received an opinion
from our special counsel, Kilpatrick Stockton LLP, that, for federal income tax purposes:
•
it is more likely than not that the members of Athens Federal Community Bank will
not realize any income upon the issuance or exercise of subscription rights;
•
it is more likely than not that the tax basis to the purchasers in the offering will
be the amount paid for our common stock, and that the holding period for shares of
common stock will begin on the date of completion of the subscription offering; and
•
the holding period for shares of common stock purchased in the community offering or
syndicated community offering will begin on the day after the date of completion of the
purchase.
Persons Who May Order Stock in the Offering (page ____)
Note: Subscription rights are not transferable, and persons with subscription rights may not
subscribe for shares for the benefit of any other person. If you violate this prohibition, you may
lose your rights to purchase shares and may face criminal prosecution and/or other sanctions.
We have granted rights to subscribe for shares of Athens Bancshares Corporation common stock
in a "subscription offering" to the following persons in the following order of priority:
1.
Persons with $50 or more on deposit at Athens Federal Community Bank as of the
close of business on March 31, 2008.
2.
Our employee stock ownership plan, which will provide retirement benefits to
our employees.
8
Table of Contents
3.
Persons (other than our directors and officers) with $50 or more on deposit at
Athens Federal Community Bank as of the close of business on September 30, 2009.
4.
Athens Federal Community Bank's depositors as of the close of business on
who were not able to subscribe for shares under categories 1 or 3 and
borrowers of Athens Federal Community Bank as of May 1, 1999 whose borrowings still
exist as of the close of business on
.
If we receive subscriptions for more shares than are to be sold in this offering, we may be
unable to fill or may only partially fill your order. Shares will be allocated in order of the
priorities described above under a formula outlined in the plan of conversion. Generally, shares
first will be allocated so as to permit each eligible subscriber, if possible, to purchase a number
of shares sufficient to make the subscriber's total allocation equal to 100 shares or the number of
shares actually subscribed for, whichever is less. After that, unallocated shares will be
allocated among the remaining eligible subscribers whose subscriptions remain unfilled in
proportion to the amounts that their respective qualifying deposits bear to the total qualifying
deposits of all remaining eligible subscribers whose subscriptions remain unfilled. If we increase
the number of shares to be sold above 2,085,000, the employee stock ownership plan will have the
first priority right to purchase any shares exceeding that amount to the extent that its
subscription has not previously been filled. Any shares remaining will be allocated in the order
of priorities described above. See
"The Conversion and Stock Offering — Subscription Offering and
Subscription Rights"
for a description of the allocation procedure.
We may offer shares not sold in the subscription offering, if any, to the general public in a
community offering. People and trusts for the benefit of people who are residents of Blount,
Bradley, Hamilton, Knox, Loudon, McMinn, Meigs, Monroe and Polk Counties in Tennessee will be given
a preference to purchase shares in the community offering. We may, in our sole discretion, reject
orders received in the community offering either in whole or in part. For example, we would reject
an order submitted by a person whom we believe is making false representations or whom we believe
is attempting to violate, evade or circumvent the terms and conditions of the plan of conversion.
If your order is rejected in part, you cannot cancel the remainder of your order. The community
offering may commence concurrently with the subscription offering or at any time thereafter and may
terminate at any time without notice until
, unless the Office of Thrift Supervision
approves a later date, which will not be beyond
.
Shares not sold in the subscription offering or the community offering may be offered for sale
in a syndicated community offering, which would be an offering to the general public on a best
efforts basis managed by Keefe, Bruyette & Woods, Inc. Any syndicated community offering may
terminate at any time without notice but not later than
, unless the Office of Thrift
Supervision approves a later date, which will not be beyond
. As in the case of the
community offering, we may, in our sole discretion, reject orders received in the syndicated
community offering either in whole or in part.
Deadline for Ordering Stock (page ____)
The
subscription offering will end at ___:___ p.m., Eastern time, on
. We expect
that the community offering will terminate at the same time, although it may continue for up to 45
days after the end of the subscription offering, or longer if the Office of Thrift Supervision
approves a later date. No single extension may be for more than 90 days. If we extend the
offering beyond
, or if we intend to sell fewer than 1,515,000 shares or more than
2,412,750 shares, all subscribers will be notified and given the opportunity to confirm, change or
cancel their orders. If you do not respond to this notice, we will return your funds promptly with
interest at our passbook rate.
Purchase Limitations (page ____)
Our plan of conversion establishes limitations on the purchase of stock in the offering.
These limitations include the following:
•
The minimum purchase is 25 shares.
9
Table of Contents
•
No individual (or individuals on a single deposit account) may purchase more than
$300,000 of common stock (which equals 30,000 shares) in the subscription offering.
•
No individual may purchase more than $300,000 of common stock (which equals 30,000
shares) in the community offering.
•
No individual, no individual together with any associates, and no group of persons
acting in concert may purchase more than $500,000 of common stock (which equals 50,000
shares) in all offering categories.
Subject to the Office of Thrift Supervision's approval, we may increase or decrease the
purchase limitations at any time.
How to Purchase Common Stock (page _____)
If you want to place an order for shares in the offering, you must complete an original stock
order and certification form and send it to us together with full payment, or deliver it in person
to the stock information center located at Athens Federal Community Bank's main office in Athens,
Tennessee. We must receive your stock order and certification form before the end of the
subscription offering or the end of the community offering, as appropriate. Once we receive your
order, you cannot cancel or change it without our consent.
To ensure that we properly identify your subscription rights, you must list all of your
deposit accounts as of the applicable eligibility date on the stock order form. If you fail to do
so, your subscription may be reduced or rejected if the offering is oversubscribed. To preserve
your purchase priority, only the name(s) of person(s) listed on your deposit account at the
applicable date of eligibility may be listed on your order form. You may not add the names of
others who were not eligible to purchase common stock in the offering on the applicable date of
eligibility.
You may pay for shares in the subscription offering or the community offering in either of the
following ways:
•
By check or money order made payable to Athens Bancshares Corporation; or
•
By authorizing withdrawal from an account at Athens Federal Community Bank.
To use funds in an Individual Retirement Account at Athens Federal Community Bank, you must
transfer your account to an unaffiliated institution or broker and open a self-directed Individual
Retirement Account. Individual Retirement Accounts at Athens Federal Community Bank are not
self-directed and common stock may only be purchased using a self-directed Individual Retirement
Account. Please contact your broker or financial institution as quickly as possible to determine
if you may transfer your Individual Retirement Account from Athens Federal Community Bank because
the transfer may take several days.
We will pay interest on your subscription funds at the rate we pay on passbook accounts, which
is currently 0.3% per annum, from the date we receive your funds until the offering is completed or
terminated. All funds authorized for withdrawal from deposit accounts with us will earn interest
at the applicable account rate until the offering is completed or terminated. If, as a result of a
withdrawal from a certificate of deposit, the balance falls below the minimum balance requirement,
the remaining funds will earn interest at our passbook rate.
There will be no early withdrawal
penalty for withdrawals from certificates of deposit used to pay for stock.
10
Table of Contents
How We Will Use the Proceeds of this Offering (page ____)
The following table summarizes how we will use the proceeds of this offering, based on the
sale of shares at the minimum and maximum of the offering range.
Minimum 1,515,000
Maximum 2,085,000
(In thousands)
Shares at $10.00 Per Share
Shares at $10.00 Per Share
Offering proceeds
$
15,150
$
20,850
Net offering proceeds
13,970
19,670
Less:
Proceeds contributed to Athens Federal Community Bank
6,985
9,835
Proceeds used for loan to employee stock ownership plan
1,292
1,748
Proceeds contributed to charitable foundation
100
100
Proceeds remaining for Athens Bancshares Corporation
$
5,593
$
7,987
Athens Bancshares Corporation may use the portion of the proceeds that it retains to, among
other things, invest in securities, pay cash dividends or repurchase shares of common stock,
subject to regulatory restrictions. Athens Federal Community Bank may use the portion of the
proceeds that it receives to fund new loans, open new branches, invest in securities and expand its
business activities. Athens Bancshares Corporation and Athens Federal Community Bank may also use
the proceeds of the offering to diversify their businesses and acquire other companies, although we
have no specific plans to do so at this time. Except as described above, neither Athens Bancshares
Corporation nor Athens Federal Community Bank has any specific plans for the investment of the
proceeds of this offering and has not allocated a specific portion of the proceeds to any
particular use. For a discussion of our business reasons for undertaking this offering, see
"The
Conversion and Stock Offering — Reasons for the Conversion."
Purchases by Directors and Executive Officers (page ____)
We expect that our directors and executive officers, together with their associates, will
subscribe for 293,750 shares, which equals 19.4% of the shares that would be sold at the minimum of
the offering range. Our directors and executive officers, together with their associates, will pay
the same $10.00 price per share as everyone else who purchases shares in the offering. Like all of
our depositors, our directors and executive officers and their associates have subscription rights
based on their deposits and, if there is an oversubscription, their orders will be subject to the
allocation provisions set forth in our plan of conversion, unless waived by the Office of Thrift
Supervision. Purchases by our directors and executive officers and their associates will count
towards the minimum number of shares we must sell to close the offering.
Market for Athens Bancshares Corporation's Common Stock (page ____)
We have received conditional approval to list the common stock of Athens Bancshares
Corporation for trading on the Nasdaq Capital Market under the symbol "AFCB." Keefe, Bruyette &
Woods, Inc. currently intends to become a market maker in the common stock, but it is under no
obligation to do so. In addition, if needed, Keefe, Bruyette & Woods, Inc. will assist us in
obtaining additional market makers. We cannot assure you that other market makers will be obtained
or that an active and liquid trading market for our common stock will develop or, if developed,
will be maintained. After shares of the common stock begin trading, you may contact a stock broker
to buy or sell shares.
Athens Bancshares Corporation's Dividend Policy (page ____)
After the offering, we intend to adopt a policy of paying regular cash dividends. Our ability
to pay dividends will depend on a number of factors, including capital requirements, regulatory
limitations and our operating results and financial condition.
11
Table of Contents
Delivery of Prospectus
To ensure that each person receives a prospectus at least 48 hours before the offering
deadline, we may not mail prospectuses any later than five days before such date or hand-deliver
prospectuses later than two days before that date. Stock order forms may only be delivered if
accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order
form by means other than U.S. mail.
We will make reasonable attempts to provide a prospectus and offering materials to holders of
subscription rights. The subscription offering and all subscription rights will expire at ___:___
p.m., Eastern time, on
whether or not we have been able to locate each person
entitled to subscription rights.
Delivery of Stock Certificates (page ____)
Certificates representing shares of common stock issued in the offering will be mailed to
purchasers at the address provided by them on the order form as soon as practicable following
completion of the offering.
Until certificates for common stock are available and delivered to
subscribers, subscribers may not be able to sell their shares, even though trading of the common
stock will have commenced.
Stock Information Center
If you have any questions regarding the offering, please call the stock information center at
(___) ___-______ to speak to a registered representative of Keefe, Bruyette & Woods, Inc. The stock
information center is open
. The stock information center is closed on bank holidays.
12
Table of Contents
Risk Factors
You should consider carefully the following risk factors before purchasing Athens Bancshares
Corporation common stock.
Risks Related to Our Business
Our concentration in non-owner occupied real estate loans may expose us to increased credit risk.
At June 30, 2009, $19.3 million, or 24.1% of our residential mortgage loan portfolio and 9.9%
of our total loan portfolio, consisted of loans secured by non-owner occupied residential
properties. Loans secured by non-owner occupied properties generally expose us to greater risk of
non-payment and loss than loans secured by owner occupied properties because the repayment of such
loans depends primarily on the tenant's continuing ability to pay rent to the property owner, who
is our borrower, or, if the property owner is unable to find a tenant, the property owner's ability
to repay the loan without the benefit of a rental income stream. In addition, the physical
condition of non-owner occupied properties is often below that of owner occupied properties due to
lax property maintenance standards, which has a negative impact on the value of the collateral
properties. Furthermore, some of our non-owner occupied residential loan borrowers have more than
one loan outstanding with us. Consequently, an adverse development with respect to one credit
relationship may expose us to a greater risk of loss compared to an adverse development with
respect to an owner occupied residential mortgage loan. At June 30, 2009, non-performing
non-owner occupied residential mortgage loans totaled $560,000, or 2.9% of our non-owner occupied
residential loan portfolio, of which $473,000 was attributable to a single borrower. At June 30,
2009, we did not hold any non-owner occupied residential properties as real estate owned. For more
information about the credit risk we face, see
"Management's Discussion and Analysis of Financial
Condition and Results of Operations — Risk Management."
Our construction loan and land and land development loan portfolios may expose us to increased
credit risk.
At June 30, 2009, $29.4 million, or 15.1% of our loan portfolio, consisted of construction
loans and land and land development loans, and $2.2 million, or 18.0% of the construction loan
portfolio, consisted of speculative construction loans. While recently the demand for construction
loans has decreased significantly due to the decline in the housing market, historically,
construction loans, including speculative construction loans, have been a material part of our loan
portfolio. Speculative construction loans are loans made to builders who have not identified a
buyer for the completed property at the time of loan origination. Subject to market conditions, we
intend to continue to emphasize the origination of construction loans and land and land development
loans. These loan types generally expose a lender to greater risk of nonpayment and loss than
residential mortgage loans because the repayment of such loans often depends on the successful
operation or sale of the property and the income stream of the borrowers and such loans typically
involve larger balances to a single borrower or groups of related borrowers. In addition, many
borrowers of these types of loans have more than one loan outstanding with us so an adverse
development with respect to one loan or credit relationship can expose us to significantly greater
risk of non-payment and loss. Furthermore, we may need to increase our allowance for loan losses
through future charges to income as the portfolio of these types of loans grows, which would
decrease our earnings. For more information about the credit risk we face, see
"Management's
Discussion and Analysis of Financial Condition and Results of Operations — Risk Management."
Our consumer loan portfolio includes consumer loans secured by rapidly depreciable assets and may
expose us to increased credit risk.
At June 30, 2009, $25.8 million, or 13.2% of our loan portfolio, consisted of consumer loans.
Included in consumer loans at that date were $4.6 million in automobile loans and $2.2 million in
consumer finance loans made to borrowers by our operating subsidiary, Southland Finance, Inc.
These consumer finance loans are generally secured by used automobiles, televisions and various
other personal property and are generally offered to borrowers with historically lower credit
scores at higher risk-adjusted interest rates. At June 30, 2009, Southland Finance, Inc.'s average
outstanding loan balance was approximately $3,700 and the weighted-average yield of its loan
13
Table of Contents
portfolio was 25.6%. Consumer loans secured by rapidly depreciable assets such as automobiles and
other personal property may be subject to greater risk of loss than loans secured by real estate
because any repossessed collateral for a defaulted consumer loan may not provide an adequate source
of repayment of the outstanding loan balance.
Significant loan losses could require us to increase our allowance for loan losses through a charge
to earnings.
When we loan money we incur the risk that our borrowers do not repay their loans. We reserve
for loan losses by establishing an allowance through a charge to earnings. The amount of this
allowance is based on our assessment of loan losses inherent in our loan portfolio. The process for
determining the amount of the allowance is critical to our financial results and condition. It
requires subjective and complex judgments about the future, including forecasts of economic or
market conditions that might impair the ability of our borrowers to repay their loans. We might
underestimate the loan losses inherent in our loan portfolio and have loan losses in excess of the
amount reserved. We might increase the allowance because of changing economic conditions. For
example, in a rising interest rate environment, borrowers with adjustable-rate loans could see
their payments increase. There may be a significant increase in the number of borrowers who are
unable or unwilling to repay their loans, resulting in our charging off more loans and increasing
our allowance. In addition, when real estate values decline, the potential severity of loss on a
real estate-secured loan can increase significantly, especially in the case of loans with high
combined loan-to-value ratios. The recent decline in the national economy and the local economies
of the areas in which the loans are concentrated could result in an increase in loan delinquencies,
foreclosures or repossessions resulting in increased charge-off amounts and the need for additional
loan loss allowances in future periods. In addition, our determination as to the amount of our
allowance for loan losses is subject to review by our primary regulator, the Office of Thrift
Supervision, as part of its examination process, which may result in the establishment of an
additional allowance based upon the judgment of the Office of Thrift Supervision after a review of
the information available at the time of its examination. Our allowance for loan losses amounted
to $2.8 million, or 1.39% of total loans outstanding and 345.04% of nonperforming loans, at June
30, 2009. Our allowance for loan losses at June 30, 2009 may not be sufficient to cover future
loan losses. A large loss could deplete the allowance and require increased provisions to replenish
the allowance, which would decrease our earnings. In addition, at June 30, 2009, we had 32 loan
relationships with outstanding balances that exceeded $1.0 million, all of which were performing
according to their original terms. However, the deterioration of one or more of these loans could
result in a significant increase in our nonperforming loans and our provision for loan losses,
which would negatively impact our results of operations.
A continuation of recent turmoil in the financial markets could have an adverse effect on our
financial position or results of operations.
Beginning in 2008, United States and global financial markets have experienced severe
disruption and volatility, and general economic conditions have declined significantly. Adverse
developments in credit quality, asset values and revenue opportunities throughout the financial
services industry, as well as general uncertainty regarding the economic, industry and regulatory
environment, have had a marked negative impact on the industry. Dramatic declines in the U.S.
housing market over the past eighteen months, with falling home prices, increasing foreclosures and
increasing unemployment, have negatively affected the credit performance of mortgage loans and
resulted in significant write-downs of asset values by many financial institutions. The United
States and the governments of other countries have taken steps to try to stabilize the financial
system, including investing in financial institutions, and have also been working to design and
implement programs to improve general economic conditions. Notwithstanding the actions of the
United States and other governments, there can be no assurances that these efforts will be
successful in restoring industry, economic or market conditions and that they will not result in
adverse unintended consequences. Factors that could continue to pressure financial services
companies, including Athens Bancshares Corporation, are numerous and include (i) worsening credit
quality, leading among other things to increases in loan losses and reserves, (ii) continued or
worsening disruption and volatility in financial markets, leading among other things to continuing
reductions in asset values, (iii) capital and liquidity concerns regarding financial institutions
generally, (iv) limitations resulting from or imposed in connection with governmental actions
intended to stabilize or provide additional regulation of the financial system, or (v) recessionary
conditions that are deeper or last longer than currently anticipated.
14
Table of Contents
The current economic recession could result in increases in our level of non-performing loans
and/or reduce demand for our products and services, which would lead to lower revenue, higher loan
losses and lower earnings.
Our business activities and earnings are affected by general business conditions in the United
States and in our local market area. These conditions include short-term and long-term interest
rates, inflation, unemployment levels, monetary supply, consumer confidence and spending,
fluctuations in both debt and equity capital markets and the strength of the economy in the United
States generally and in our market area in particular. In the current recession, the national
economy has experienced general economic downturns, with rising unemployment levels, declines in
real estate values and an erosion in consumer confidence. A prolonged or more severe economic
downturn, continued elevated levels of unemployment, further declines in the values of real estate,
or other events that affect household and/or corporate incomes could impair the ability of our
borrowers to repay their loans in accordance with their terms. Nearly all of our loans are secured
by real estate or made to businesses in our primary market area, which consists of McMinn, Monroe
and Bradley Counties in Tennessee and the surrounding areas. As a result of this concentration, a
prolonged or more severe downturn in the local economy could result in significant increases in
nonperforming loans, which would negatively impact our interest income and result in higher
provisions for loan losses, which would decrease our earnings. The economic downturn could also
result in reduced demand for credit or fee-based products and services, which also would decrease
our revenues.
Special Federal Deposit Insurance Corporation assessments and increased base assessment rates by
the Federal Deposit Insurance Corporation will decrease our earnings.
Beginning in late 2008, the economic environment caused higher levels of bank failures, which
dramatically increased Federal Deposit Insurance Corporation resolution costs and led to a
significant reduction in the Deposit Insurance Fund. As a result, the Federal Deposit Insurance
Corporation has significantly increased the initial base assessment rates paid by financial
institutions for deposit insurance. The base assessment rate was increased by seven basis points
(7 cents for every $100 of deposits) for the first quarter of 2009. Effective April 1, 2009,
initial base assessment rates were changed to range from 12 basis points to 45 basis points across
all risk categories with possible adjustments to these rates based on certain debt-related
components. These increases in the base assessment rate will increase our deposit insurance costs
and negatively impact our earnings. In addition, in May 2009, the Federal Deposit Insurance
Corporation imposed a special assessment on all insured institutions due to recent bank and
savings association failures. The emergency assessment amounts to 5 basis points on each
institution's assets minus Tier 1 capital as of June 30, 2009, subject to a maximum equal to 10
basis points times the institution's assessment base. The assessment will be collected on
September 30, 2009. Based on our assets and Tier 1 capital as of June 30, 2009, our special
assessment is approximately $109,000. The special assessment will decrease our earnings. In
addition, the Federal Deposit Insurance Corporation may impose additional emergency special
assessments after June 30, 2009, of up to 5 basis points per quarter on each institution's assets
minus Tier 1 capital if necessary to maintain public confidence in federal deposit insurance or as
a result of deterioration in the Deposit Insurance Fund reserve ratio due to institution failures.
The earliest possible date for imposing any such additional special assessment is September 30,
2009, with collection on December 31, 2009. The latest date possible for imposing any such
additional special assessment is December 31, 2009, with collection on March 31, 2010. Any
additional emergency special assessment imposed by the Federal Deposit Insurance Corporation will
further decrease our earnings.
Changing interest rates may decrease our earnings and asset value.
Our net interest income is the interest we earn on loans and investments less the interest we
pay on our deposits and borrowings. Our net interest margin is the difference between the yield we
earn on our assets and the interest rate we pay for deposits and our other sources of funding.
Changes in interest rates—up or down—could adversely affect our net interest margin and, as a
result, our net interest income. Although the yield we earn on our assets and our funding costs
tend to move in the same direction in response to changes in interest rates, one can rise or fall
faster than the other, causing our net interest margin to expand or contract. Our liabilities tend
to be shorter in duration than our assets, so they may adjust faster in response to changes in
interest rates. As a result, when interest rates rise, our funding costs may rise faster than the
yield we earn on our assets, causing our net interest margin to contract until the yield catches
up. This contraction could be more severe following a prolonged period of lower interest rates, as
a larger proportion of our fixed rate residential loan portfolio will have been originated at those
15
Table of Contents
lower rates and borrowers may be more reluctant or unable to sell their homes in a higher
interest rate environment. Changes in the slope of the "yield
curve"—or the spread between
short-term and long-term interest rates—could also reduce our net interest margin. Normally, the
yield curve is upward sloping, meaning short-term rates are lower than long-term rates. Because our
liabilities tend to be shorter in duration than our assets, when the yield curve flattens or even
inverts, we could experience pressure on our net interest margin as our cost of funds increases
relative to the yield we can earn on our assets. For further discussion of how changes in interest
rates could impact us, see
"Management's Discussion and Analysis of Financial Condition and Results
of Operations —Risk Management — Interest Rate Risk Management."
Strong competition within our primary market area could negatively impact our profits and slow
growth.
We face intense competition both in making loans and attracting deposits. This competition
has made it more difficult for us to make new loans and attract deposits. Price competition for
loans and deposits might result in us earning less on our loans and paying more on our deposits,
which would reduce net interest income. Competition also makes it more difficult to grow loans and
deposits. At June 30, 2008, which is the most recent date for which data is available from the
Federal Deposit Insurance Corporation, we held approximately 20.2% of the deposits in McMinn
County, Tennessee, 3.2% of the deposits in Monroe County, Tennessee and 1.1% of the deposits in
Bradley County, Tennessee. Some of the institutions with which we compete have substantially
greater resources and lending limits than we have and may offer services that we do not provide.
We expect competition to increase in the future as a result of legislative, regulatory and
technological changes and the continuing trend of consolidation in the financial services industry.
Our profitability depends upon our continued ability to compete successfully in our primary market
area. See
"Our Business — Market Area"
and
"Our Business — Competition"
for more information
about our primary market area and the competition we face.
We operate in a highly regulated environment and we may be adversely affected by changes in laws
and regulations.
We are subject to extensive regulation, supervision and examination by the Office of Thrift
Supervision, our chartering authority, and by the Federal Deposit Insurance Corporation, as insurer
of our deposits. Athens Bancshares Corporation also will be subject to regulation and supervision
by the Office of Thrift Supervision. Such regulation and supervision governs the activities in
which an institution and its holding company may engage, and are intended primarily for the
protection of the insurance fund and the depositors and borrowers of Athens Federal Community Bank
rather than for holders of Athens Bancshares Corporation common stock. Regulatory authorities have
extensive discretion in their supervisory and enforcement activities, including the imposition of
restrictions on our operations, the classification of our assets and determination of the level of
our allowance for loan losses. If our regulators require us to charge-off loans or increase our
allowance for loan losses, our earnings would suffer. Any change in such regulation and oversight,
whether in the form of regulatory policy, regulations, legislation or supervisory action, may have
a material impact on our operations. For a further discussion, see
"Regulation and Supervision."
The current administration has also proposed comprehensive legislation intended to modernize
regulation of the United States financial system. The proposed legislation contains several
provisions that would have a direct impact on Athens Bancshares Corporation and Athens Federal
Bank. Under the proposed legislation, the federal savings association charter would be eliminated
and the Office of Thrift Supervision would be consolidated with the Comptroller of the Currency
into a new regulator, the National Bank Supervisor. The proposed legislation would also require
Athens Federal Community Bank to become a national bank or convert to a state-chartered
institution. In addition, it would eliminate the status of "savings and loan holding company" and
mandate that all companies that control an insured depository institution register as a bank
holding company. Registration as a bank holding company would represent a significant change, as
material differences currently exist between savings and loan holding company and bank holding
company supervision and regulation. For example, bank holding companies above a specified asset
size are subject to consolidated leverage and risk-based capital requirements whereas savings and
loan holding companies are not subject to such requirements. The proposed legislation would also
create a new federal agency, the Consumer Financial Protection Agency, that would be dedicated to
administering and enforcing fair lending and consumer compliance laws with respect to financial
products and services, which could result in new regulatory requirements and increased regulatory
costs for us. If enacted, the legislation may have a substantial impact on our operations.
However, because any final legislation
16
Table of Contents
may differ significantly from the current administration's proposal, the specific effects of the
legislation cannot be evaluated at this time.
Risks Related to this Offering
Our stock price may decline when trading commences.
If you purchase shares in the offering, you may not be able to sell them at or above the
$10.00 purchase price. After the shares of our common stock begin trading, the trading price of
the common stock will be determined by the marketplace, and will be influenced by many factors
outside of our control, including prevailing interest rates, investor perceptions, securities
analyst research reports and general industry, geopolitical and economic conditions. Publicly
traded stocks, including stocks of financial institutions, often experience substantial market
price volatility. These market fluctuations might not be related to the operating performance of
particular companies whose shares are traded. Additionally, the stock prices of many recently
converted thrift institutions have declined below, and remain below, their initial offering prices.
There may be a limited market for our common stock, which may adversely affect our stock price.
Although we have received conditional approval to list our shares of common stock for trading
on the Nasdaq Capital Market, there is no guarantee that the shares will be actively traded. If an
active trading market for our common stock does not develop, you may not be able to sell all of
your shares of common stock on short notice and the sale of a large number of shares at one time
could temporarily depress the market price. There also may be a wide spread between the bid and
asked price for our common stock. When there is a wide spread between the bid and asked price, the
price at which you may be able to sell our common stock may be significantly lower than the price
at which you could buy it at that time.
Additional expenses following the offering from operating as a public company and from new equity
benefit plans will adversely affect our profitability.
Following the offering, our noninterest expenses are likely to increase as a result of the
financial accounting, legal and various other additional expenses usually associated with operating
as a public company and complying with public company disclosure obligations, particularly those
obligations imposed by the Sarbanes-Oxley Act of 2002. Compliance with the Sarbanes-Oxley Act of
2002 will require us to upgrade our accounting systems, which will increase our operating expenses.
We also will recognize additional annual employee compensation and benefit expenses stemming from
options and shares granted to employees, directors and executives under new benefit plans. These
additional expenses will adversely affect our profitability. We cannot determine the actual amount
of these new stock-related compensation and benefit expenses at this time because applicable
accounting practices generally require that they be based on the fair market value of the options
or shares of common stock at the date of the grant; however, we expect them to be material. We
will recognize expenses for our employee stock ownership plan when shares are committed to be
released to participants' accounts and will recognize expenses for restricted stock awards and
stock options generally over the vesting period of awards made to recipients. These benefit
expenses in the first year following the offering have been estimated to be approximately $
at the maximum of the offering range as set forth in the pro forma financial information under
"Pro
Forma Data"
assuming the $10.00 per share purchase price as fair market value. Actual expenses,
however, may be higher or lower, depending on the price of our common stock. For further
discussion of these plans, see
"Our Management — Benefit Plans."
Our low return on equity may negatively impact the value of our common stock.
Return on equity, which equals net income divided by average equity, is a ratio used by many
investors to compare the performance of a particular company with other companies. For the six
months ended June 30, 2009, our annualized return on equity was 8.68% and our return on equity for
the year ended December 31, 2008 was 4.72%. Our pro forma return on equity for the same periods is
estimated to be 2.04% and 2.28%, respectively, and our pro forma shareholders' equity to assets
ratio at June 30, 2009 is estimated to be 16.4%, assuming the sale of shares at the maximum of the
offering range. Our publicly traded thrift peers used in the valuation as of August 19, 2009 had
an average return on equity of 3.81% for the twelve months ended June 30, 2009. Over time, we
intend to
17
Table of Contents
use the net proceeds from this offering to increase earnings per share and book value per share,
without assuming undue risk, with the goal of achieving a return on equity that is competitive with
other publicly held companies. This goal could take a number of years to achieve, and it may not
be attained, and the expected increase in our noninterest expenses following the offering due to
operating as a public company and from new equity benefit plans will likely further deter our
ability to achieve a competitive return on equity. Consequently, you should not expect a
competitive return on equity in the near future. Failure to achieve a competitive return on equity
might make an investment in our common stock unattractive to some investors and might cause our
common stock to trade at lower prices than comparable companies with higher returns on equity. See
"Pro Forma Data"
for an illustration of the financial impact of this offering.
We have broad discretion in allocating the proceeds of the offering. Our failure to effectively
utilize such proceeds would reduce our profitability.
We intend to contribute approximately 50% of the net proceeds of the offering to Athens
Federal Community Bank. Athens Bancshares Corporation may use the portion of the proceeds that it
retains to, among other things, invest in securities, pay cash dividends or repurchase shares of
common stock, subject to regulatory restrictions. Athens Federal Community Bank may use the
portion of the proceeds that it receives to fund new loans, open new branches, invest in securities
and expand its business activities. Athens Bancshares Corporation and Athens Federal Community
Bank may also use the proceeds of the offering to diversify their businesses and acquire other
companies, although we have no specific plans to do so at this time. We have not allocated
specific amounts of proceeds for any of these purposes, and we will have significant flexibility in
determining how much of the net proceeds we apply to different uses and the timing of such
applications. Our failure to utilize these funds effectively would reduce our profitability.
A significant percentage of our common stock will be held by our directors and executive officers
and benefit plans.
We expect that our directors and executive officers, together with their associates, will
subscribe for 293,750 shares in the offering. In addition, we intend to establish an employee
stock ownership plan that will purchase an amount of shares equal to 8.0% of the sum of the shares
sold in the offering and contributed to the Athens Federal Foundation. As a result, upon
consummation of the offering, a total of up to 422,950, or 26.2%, and 468,550, or 21.4%, of our
outstanding shares will be held by our directors and executive officers and our employee stock
ownership plan at the minimum and maximum of the offering range, respectively. Further, shares
will be held by management following the implementation of an equity incentive plan, which we
intend to implement no earlier than six months following the completion of the offering. The
charter and bylaws of Athens Bancshares Corporation contain supermajority voting provisions that
require that the holders of at least 80% of Athens Bancshares Corporation's outstanding shares of
voting stock approve certain actions including, but not limited to, the consummation of a business
combination with an interested shareholder, the removal of a director and the amendment of certain
provisions of Athens Bancshares Corporation's charter and bylaws. If our directors and executive
officers and benefit plans hold more than 20% of our outstanding common stock following the
completion of the offering, the shares held by these individuals and benefit plans could be voted
in a manner that would ensure that the 80% supermajority needed to approve such actions could not
be attained. For more information on the restrictions included in the charter and bylaws of Athens
Bancshares Corporation, see
"Restrictions on the Acquisition of Athens Bancshares Corporation and
Athens Federal Community Bank."
Issuance of shares for benefit programs may dilute your ownership interest.
We intend to adopt an equity incentive plan following the offering. If shareholders approve
the new equity incentive plan, we intend to issue shares to our officers, employees and directors
through this plan. If the restricted stock awards under the equity incentive plan are funded from
authorized but unissued stock, your ownership interest in the shares could be diluted by up to
approximately 3.85%, assuming awards of common stock equal to 4% of the sum of the shares sold in
the offering and contributed to the Athens Federal Foundation are awarded under the plan. If the
shares issued upon the exercise of stock options under the equity incentive plan are issued from
authorized but unissued stock, your ownership interest in the shares could be diluted by up to
approximately 9.1%, assuming stock option grants equal to 10% of the sum of the shares sold in the
offering and contributed to the Athens Federal Foundation are granted under the plan. See
"Pro
Forma Data"
and
"Our Management — Benefit Plans."
18
Table of Contents
The charter and bylaws of Athens Bancshares Corporation and certain regulations may prevent or make
more difficult certain transactions, including a sale or merger of Athens Bancshares Corporation.
Provisions of the charter and bylaws of Athens Bancshares Corporation and federal banking
regulations may make it more difficult for companies or persons to acquire control of Athens
Bancshares Corporation. Consequently, our shareholders may not have the opportunity to participate
in such a transaction and the trading price of our common stock may not rise to the level of other
institutions that are more vulnerable to hostile takeovers. The factors that may discourage
takeover attempts or make them more difficult include:
•
Charter and bylaws
. Provisions of the charter and bylaws of Athens Bancshares
Corporation may make it more difficult and expensive to pursue a takeover attempt that
the board of directors opposes. These provisions also make more difficult the removal
of current directors or management, or the election of new directors. These provisions
include:
•
supermajority voting requirements for certain business combinations and
changes to some provisions of the charter and bylaws;
•
limitation on the right to vote shares;
•
the election of directors to staggered terms of three years;
•
provisions regarding the timing and content of shareholder proposals and
nominations;
•
provisions restricting the calling of special meetings of shareholders;
•
the absence of cumulative voting by shareholders in the election of
directors; and
•
the removal of directors only for cause.
•
Office of Thrift Supervision regulations
. Office of Thrift Supervision regulations
prohibit, for three years following the completion of a mutual-to-stock conversion, the
offer to acquire or the acquisition of more than 10% of any class of equity security of
a converted institution without the prior approval of the Office of Thrift Supervision.
For further information, see "
Restrictions on Acquisition of Athens Bancshares Corporation and
Athens Federal Community Bank.
"
Risks Related to the Formation of the Charitable Foundation
The contribution to the Athens Federal Foundation will decrease the ownership interest and voting
interest in the shares sold to the public by up to 1.24% after the contribution.
Purchasers of shares will have their ownership and voting interests diluted at the close of
the conversion when Athens Bancshares Corporation issues and contributes 100,000 shares to the
Athens Federal Foundation. This dilution will range from approximately 1.24% at the minimum of the
offering range to approximately 1.13% at the maximum of the offering range. For a further
discussion regarding the effect of the contribution to the charitable foundation, see
"Pro Forma
Data"
and
"Comparison of Independent Valuation and Pro Forma Financial Information With and Without
the Foundation."
19
Table of Contents
Our contribution to the Athens Federal Foundation may not be tax deductible, which could decrease
our profits.
We believe that our contribution to the Athens Federal Foundation, valued at $1.1 million,
pre-tax, will be deductible for federal income tax purposes. However, we do not have any assurance
that the Internal Revenue Service will grant tax-exempt status to the foundation. If the
contribution is not deductible, we would not receive any tax benefit from the contribution. In
addition, even if the contribution is tax deductible, we may not have sufficient profits to be able
to use the deduction fully. If it is more likely than not that we will be unable to use the entire
deduction, we will be required to establish a valuation allowance related to any deferred tax asset
that has been recorded for this contribution.
Establishment of the Athens Federal Foundation will decrease our profits during the year in which
the foundation is established.
Athens Bancshares Corporation intends to contribute 100,000 shares of Athens Bancshares
Corporation common stock and $100,000 in cash to the Athens Federal Foundation. This contribution
will be an additional operating expense and will reduce net income during the fiscal year in which
the foundation is established, which is expected to be late 2009 or early 2010. The contribution
to the Athens Federal Foundation would reduce net earnings by approximately $726,000, after tax,
during the year in which the foundation is established. See
"Pro Forma Data."
20
Table of Contents
A Warning About Forward-Looking Statements
This prospectus contains forward-looking statements, which can be identified by the use of
words such as "believes," "expects," "anticipates," "estimates" or similar expressions.
Forward-looking statements include:
•
statements of our goals, intentions and expectations;
•
statements regarding our business plans, prospects, growth and operating strategies;
•
statements regarding the quality of our loan and investment portfolios; and
•
estimates of our risks and future costs and benefits.
These forward-looking statements are subject to significant risks and uncertainties. Actual
results may differ materially from those contemplated by the forward-looking statements due to,
among others, the following factors:
•
general economic conditions, either nationally or in our primary market area, that
are worse than expected;
•
a continued decline in real estate values;
•
changes in the interest rate environment that reduce our interest margins or reduce
the fair value of financial instruments;
•
increased competitive pressures among financial services companies;
•
changes in consumer spending, borrowing and savings habits;
•
legislative, regulatory or supervisory changes that adversely affect our business;
•
adverse changes in the securities markets; and
•
changes in accounting policies and practices, as may be adopted by the bank
regulatory agencies, the Financial Accounting Standards Board or the Public Company
Accounting Oversight Board.
Any of the forward-looking statements that we make in this prospectus and in other public
statements we make may later prove incorrect because of inaccurate assumptions, the factors
illustrated above or other factors that we cannot foresee. Consequently, no forward-looking
statement can be guaranteed.
21
Table of Contents
Selected Consolidated Financial and Other Data
The summary consolidated financial information presented below is derived in part from our
consolidated financial statements. The following is only a summary and you should read it in
conjunction with the consolidated financial statements and notes beginning on page F-1. The
information at December 31, 2008 and 2007 and for the years then ended is derived in part from the
audited consolidated financial statements of Athens Federal Community Bank that appear elsewhere in
this prospectus.
The selected data at June 30, 2009 and for the six months ended June 30, 2009 and 2008 was not
audited, but in the opinion of management, represents all adjustments necessary for a fair
presentation. All of these adjustments are normal and recurring. The results of operations for
the six months ended June 30, 2009 are not necessarily indicative of the results of operations that
may be expected for the entire year.
At June 30,
At December 31,
(In thousands)
2009
2008
2007
2006
2005
2004
Total assets
$
243,011
$
251,000
$
230,505
$
212,383
$
190,505
$
182,595
Cash and cash equivalents
9,761
4,547
9,284
8,989
4,554
8,437
Securities available-for-sale
22,621
30,509
22,967
21,440
27,695
40,247
Securities held-to-maturity
2
5
14
25
63
164
Investments, at cost
2,899
2,899
4,746
6,076
7,235
2,518
Loans receivable, net
192,217
196,520
178,603
157,013
138,570
119,846
Deposits
202,920
206,493
197,344
171,214
153,190
144,807
Securities sold under agreements to
repurchase
972
912
1,151
1,681
1,421
1,110
Advances from Federal Home Loan Bank
10,378
16,310
5,532
15,630
13,600
15,315
Total equity
25,331
24,212
23,271
21,879
20,800
19,733
For the Six Months
Ended June 30,
For the Year Ended December 31,
(In thousands)
2009
2008
2008
2007
2006
2005
2004
Operating Data:
Interest income
$
7,511
$
7,836
$
15,580
$
15,457
$
12,775
$
10,519
$
9,626
Interest expense
3,003
3,675
7,133
7,101
5,277
3,986
3,759
Net interest income
4,508
4,161
8,447
8,356
7,498
6,533
5,867
Provision for loan losses
118
287
761
443
704
341
267
Net interest income after
provision for loan
losses
4,390
3,874
7,686
7,913
6,794
6,192
5,600
Noninterest income
2,488
2,184
4,161
4,030
2,682
2,563
2,380
Noninterest expense
5,389
5,442
10,251
10,431
8,244
6,987
5,942
Income before income taxes
1,489
616
1,596
1,512
1,232
1,768
2,038
Income taxes
406
153
487
392
348
568
674
Net income
$
1,083
$
463
$
1,109
$
1,120
$
884
$
1,200
$
1,364
22
Table of Contents
At or For the Six
Months Ended
June 30,
At or For the Year Ended December 31,
2009
2008
2008
2007
2006
2005
2004
Performance Ratios (1):
Return on average assets
0.87
%
0.38
%
0.45
%
0.50
%
0.44
%
0.65
%
0.75
%
Return on average equity
8.68
3.94
4.72
5.02
4.07
5.84
7.22
Interest rate spread (2)
3.71
3.49
3.51
3.79
3.79
3.60
3.32
Net interest margin (3)
3.92
3.73
3.74
4.05
4.07
3.81
3.50
Other expenses to average assets
4.32
4.88
4.18
4.64
4.13
3.77
3.28
Efficiency ratio (4)
77.03
85.77
81.30
84.22
80.98
76.81
72.05
Average interest-earning assets to
average interest-bearing liabilities
108.03
107.50
107.20
107.67
109.99
109.06
107.66
Average equity to average assets
10.00
9.70
9.58
9.92
10.87
11.07
10.42
Capital Ratios:
Total capital (to risk-weighted assets)
15.0
%
14.3
%
14.0
%
14.8
%
15.6
%
16.8
%
18.4
%
Tier 1 capital (to risk-weighted assets)
13.8
13.0
12.8
13.5
14.4
15.6
17.2
Tier 1 capital (to adjusted total assets)
10.2
9.4
9.4
9.8
10.3
10.9
10.7
Tangible equity (to adjusted total assets)
10.2
9.4
9.4
9.8
10.3
10.9
10.7
Asset Quality Ratios:
Allowance for loan losses as a percent of
total loans
1.39
%
1.45
%
1.52
%
1.37
%
1.58
%
1.44
%
1.52
%
Allowance for loan losses as a percent of
non-performing loans
345.04
475.24
73.87
704.52
1,457.43
326.81
2,285.64
Net charge-offs to average outstanding
loans during the period
0.22
0.04
0.12
0.29
0.13
0.14
0.18
Non-performing loans as a percent
of total loans
0.41
0.31
2.08
0.20
0.11
0.45
0.07
Non-performing assets as a percent
of total assets
0.44
0.25
1.76
0.17
0.11
0.48
0.11
Total non-performing assets and troubled
debt restructurings as a percent of total
assets
0.93
0.34
1.87
0.27
0.21
0.59
0.19
Other Data:
Number of offices
7
7
7
7
5
5
4
Number of deposit accounts
15,277
15,090
15,296
14,769
13,482
12,726
12,195
Number of loans
3,135
3,384
3,297
3,442
3,292
3,244
3,158
(1)
Performance ratios for the six months ended June 30, 2009 and 2008 are annualized.
(2)
Represents the difference between the weighted average yield on average interest-earning
assets and the weighted average cost on average interest-bearing liabilities. Tax exempt
income is reported on a tax equivalent basis using a federal marginal tax rate of 38.3%.
(3)
Represents net interest income as a percent of average interest-earning assets. Tax exempt
income is reported on a tax equivalent basis using a federal marginal tax rate of 38.3%.
(4)
Represents other expenses divided by the sum of net interest income and other income.
23
Table of Contents
Use of Proceeds
The following table shows how we intend to use the net proceeds of the offering. The actual
net proceeds will depend on the number of shares of common stock sold in the offering and the
expenses incurred in connection with the offering. Payments for shares made through withdrawals
from deposit accounts at Athens Federal Community Bank will reduce deposits and will not result in
the receipt of new funds for investment. See
"Pro Forma Data"
for the assumptions used to arrive
at these amounts.
Minimum of
Midpoint of
Maximum of
15% Above Maximum
Offering Range
Offering Range
Offering Range
of Offering Range
1,515,000
Percent
1,800,000
Percent
2,085,000
Percent
2,412,750
Percent
Shares at
of
Shares at
of
Shares at
of
Shares at
of
$10.00
Net
$10.00
Net
$10.00
Net
$10.00
Net
(Dollars in thousands)
Per Share
Proceeds
Per Share
Proceeds
Per Share
Proceeds
Per Share
Proceeds
Offering proceeds
$
15,150
$
18,000
$
20,850
$
24,128
Less: offering expenses
(1,180
)
(1,180
)
(1,180
)
(1,180
)
Net offering proceeds
$
13,970
100.00
%
$
16,820
100.00
%
$
19,670
100.00
%
$
22,948
100.00
%
Less:
Proceeds contributed to Athens
Federal Community Bank
$
(6,985
)
(50.00
)%
$
(8,410
)
(50.00
)%
$
(9,835
)
(50.00
)%
$
(11,474
)
(50.00
)%
Proceeds used for loan to employee
stock ownership plan
(1,292
)
(9.25
)
(1,520
)
(9.04
)
(1,748
)
(8.89
)
(2,010
)
(8.76
)
Proceeds contributed to foundation
(100
)
(0.72
)%
(100
)
(0.59
)%
(100
)
(0.51
)%
(100
)
(0.44
)%
Proceeds remaining for Athens
Bancshares Corporation (1)
$
5,593
40.03
%
$
6,790
40.37
%
$
7,987
40.60
%
$
9,364
40.80
%
(1)
Following the completion of the stock offering and in accordance with applicable regulations,
Athens Bancshares Corporation may purchase shares of its common stock in the open market in
order to grant awards of restricted stock under its proposed equity incentive plan. Assuming
a market price of $10.00 per share at the time of purchase, the cost of acquiring the shares
would be approximately $646,000 (64,600 shares) at the minimum of the offering range, $760,000
(76,000 shares) at the midpoint of the offering range, $874,000 (87,400 shares) at the maximum
of the offering range and $1.0 million (100,510 shares) at 15% above the maximum of the
offering range. See
"Pro Forma Data"
and
"Our Management — Benefit Plans — Nonqualified
Deferred Compensation — Future Equity Incentive Plan."
Athens Bancshares Corporation intends to invest the proceeds it retains from the offering
initially in short-term, liquid investments. Over time, Athens Bancshares Corporation may use the
proceeds it retains from the offering:
•
to invest in securities;
•
to pay dividends to shareholders;
•
to repurchase shares of its common stock, subject to regulatory restrictions;
•
to finance the possible acquisition of financial institutions or other businesses
that are related to banking, although we currently have no definitive plans or
commitments regarding potential acquisition opportunities; and
•
for general corporate purposes.
Under current Office of Thrift Supervision regulations, Athens Bancshares Corporation may not
repurchase shares of its common stock during the first year following the offering, except to fund
shareholder-approved equity benefit plans or, with prior regulatory approval, when extraordinary
circumstances exist.
24
Table of Contents
Athens Federal Community Bank may use the proceeds that it receives from the offering, which
is shown in the table above as the amount contributed to Athens Federal Community Bank:
•
to fund new loans;
•
to invest in securities;
•
to finance the possible expansion of its business activities through the
establishment of new branch offices and/or the acquisition of other financial
institutions or financial services companies, although we currently have no definitive
plans or commitments regarding potential expansion or acquisition opportunities; and
•
for general corporate purposes.
We may need regulatory approvals to engage in some of the activities listed above.
Except as described above, neither Athens Bancshares Corporation nor Athens Federal Community
Bank has any specific plans for the investment of the proceeds of this offering and has not
allocated a specific portion of the proceeds to any particular use. For a discussion of our
business reasons for undertaking the offering, see
"The Conversion and Stock Offering — Reasons
for the Conversion."
25
Table of Contents
Our Dividend Policy
Following the offering, our board of directors intends to adopt a policy of paying regular
cash dividends. We cannot guarantee that we will pay dividends or that, if paid, we will not
reduce or eliminate dividends in the future.
The board of directors may declare and pay periodic special cash dividends in addition to, or
in lieu of, regular cash dividends. In determining whether to declare or pay any dividends,
whether regular or special, the board of directors will take into account our financial condition
and results of operations, tax considerations, capital requirements, industry standards, and
economic conditions. We will also consider the regulatory restrictions that affect the payment of
dividends by Athens Federal Community Bank to us, discussed below.
Athens Bancshares Corporation is subject to Tennessee law, which generally prohibits Athens
Bancshares Corporation from paying dividends on its common stock if, after giving effect to the
distribution, it would be unable to pay its debts as they become due in the usual course of
business or if its total assets would be less than the sum of its liabilities and the amount that
would be needed, if Athens Bancshares Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock
who have a preference upon dissolution.
Athens Bancshares Corporation will not be subject to Office of Thrift Supervision regulatory
restrictions on the payment of dividends. However, our ability to pay dividends may depend, in
part, upon dividends we receive from Athens Federal Community Bank because we initially will have
no source of income other than dividends from Athens Federal Community Bank and earnings from the
investment of the net proceeds from the offering that we retain. Office of Thrift Supervision
regulations limit dividends and other distributions from Athens Federal Community Bank to us.
Athens Federal Community Bank may not declare or pay a cash dividend on its capital stock if its
effect would be to reduce the regulatory capital of Athens Federal Community Bank below the amount
required for the liquidation account to be established as required by Athens Federal Community
Bank's plan of conversion. No insured depository institution may make a capital distribution if,
after making the distribution, the institution would be undercapitalized. See
"Regulation and
Supervision — Regulation of Federal Savings Associations — Limitation on Capital Distributions"
and "
The Conversion and Stock Offering —Effects of Conversion to Stock Form — Liquidation
Account."
Any payment of dividends by Athens Federal Community Bank to us that would be deemed to be
drawn out of Athens Federal Community Bank's bad debt reserves would require Athens Federal
Community Bank to pay federal income taxes at the then current income tax rate on the amount deemed
distributed. See
"Federal and State Taxation —Federal Income Taxation."
Athens Bancshares
Corporation does not contemplate any distribution by Athens Federal Community Bank that would
result in this type of tax liability.
In addition, Athens Bancshares Corporation may not make a distribution that would constitute a
return of capital during the three-year term of the business plan submitted in connection with the
offering.
26
Table of Contents
Market for the Common Stock
We have not previously issued common stock and there is currently no established market for
the common stock. We have received conditional approval to list our common stock for trading on
the Nasdaq Capital Market under the symbol "AFCB" upon completion of the offering. Keefe, Bruyette
& Woods, Inc. intends to become a market maker in our common stock following the offering, but it
is under no obligation to do so. Keefe, Bruyette & Woods, Inc. also will assist us, if needed, in
obtaining other market makers after the offering. We will try to obtain at least three market
makers for our stock, but we cannot assure you that other market makers will be obtained or that an
active and liquid trading market for the common stock will develop or, if developed, will be
maintained.
The development of a public market having the desirable characteristics of depth, liquidity
and orderliness depends on the existence of willing buyers and sellers, the presence of which is
not within our control or that of any market maker. The number of active buyers and sellers of our
common stock at any particular time may be limited, which may have an adverse effect on the price
at which our common stock can be sold. There can be no assurance that persons purchasing the
common stock will be able to sell their shares at or above the $10.00 price per share in the
offering. Purchasers of our common stock should recognize that there may be a limited trading
market in the common stock and, therefore, should have the financial ability to withstand a
longer-term investment horizon.
27
Table of Contents
Capitalization
The following table presents the historical capitalization of Athens Federal Community Bank at
June 30, 2009 and the capitalization of Athens Bancshares Corporation reflecting the offering
(referred to as "pro forma" information). The pro forma capitalization gives effect to the
assumptions listed under
"Pro Forma Data,"
based on the sale of the number of shares of common
stock indicated in the table. This table does not reflect the issuance of additional shares as a
result of the exercise of options granted under the proposed equity incentive plan. A change in the
number of shares to be issued in the offering may materially affect pro forma capitalization. We
are offering our common stock on a best efforts basis. We must sell a minimum of 1,515,000 shares
to complete the offering.
Pro Forma
Capitalization Based Upon the Sale of
1,515,000
1,800,000
2,085,000
2,412,750
Capitalization
Shares at
Shares at
Shares at
Shares at
as of
$10.00
$10.00
$10.00
$10.00
(Dollars in thousands, except per share amounts)
June 30, 2009
Per Share
Per Share
Per Share
Per Share
Deposits (1)
$
202,920
$
202,920
$
202,920
$
202,920
$
202,920
Borrowings
11,350
11,350
11,350
11,350
11,350
Total deposits and borrowed funds
$
214,270
$
214,270
$
214,270
$
214,270
$
214,270
Shareholders' equity:
Preferred stock:
10,000,000 shares, $0.01 par value per
share, authorized; none issued or
outstanding
$
—
$
—
$
—
$
—
$
—
Common stock:
50,000,000 shares, $0.01 par value per
share, authorized; specified number of
shares assumed to be issued and
outstanding (2)
—
16
19
22
25
Additional paid-in capital
—
13,954
16,801
19,648
22,923
Retained earnings (3)
25,237
25,237
25,237
25,237
25,237
Accumulated other comprehensive income
94
94
94
94
94
Shares issued to the foundation
—
1,000
1,000
1,000
1,000
Less:
Charitable foundation contribution
expense (4)
—
726
726
726
726
Common stock acquired by employee stock
ownership plan (5)
—
1,292
1,520
1,748
2,010
Common stock to be acquired by equity
incentive plan (6)
—
646
760
874
1,005
Total shareholders' equity
$
25,331
$
37,637
$
40,145
$
42,653
$
45,538
Shareholders' equity to assets (1)
10.4
%
14.7
%
15.6
%
16.4
%
17.3
%
(1)
Does not reflect withdrawals from deposit accounts for the purchase of common stock in the
offering. Withdrawals to purchase common stock will reduce pro forma deposits and assets by
the amounts of the withdrawals.
(2)
Reflects total issued and outstanding shares of 1,615,000, 1,900,000, 2,185,000 and 2,512,750
at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively.
(3)
Retained earnings are restricted by applicable regulatory capital requirements.
(4)
Represents the expense, net of tax, of the contribution of common stock and cash to the
Athens Federal Foundation, based on an estimated tax rate of 34.0%.
(5)
Assumes that 8% of the sum of the common stock sold in the offering and contributed to the
charitable foundation will be acquired by the employee stock ownership plan in the offering
with funds borrowed from Athens Bancshares Corporation. Under generally accepted accounting
principles, the amount of common stock to be purchased by the employee stock ownership plan
represents unearned compensation and is, accordingly, reflected as a reduction of capital and
a liability to the employee stock ownership plan. As shares are released to plan
participants' accounts, a compensation expense will be charged, along with related tax
benefit, and a reduction in the charge against capital will occur in the amount of the
compensation expense recognized. Since the funds are borrowed from Athens Bancshares
Corporation, the borrowing will
28
Table of Contents
be eliminated in consolidation and no liability or interest expense will be reflected in the
financial statements of Athens Federal Community Bank. The loan will be repaid principally
through Athens Federal Community Bank's contributions to the employee stock ownership plan and
dividends payable on common stock held by the plan over the anticipated 15-year term of the
loan. See
"Our Management — Benefit Plans — Employee Stock Ownership Plan."
(6)
Assumes the purchase in the open market at $10.00 per share, for restricted stock awards
under the proposed equity incentive plan, of a number of shares equal to 4% of the sum of the
shares of common stock sold in the offering and contributed to the charitable foundation. The
shares are reflected as a reduction of shareholders' equity. The equity incentive plan will
be submitted to shareholders for approval at a meeting following the offering. See
"Risk
Factors — Issuance of shares for benefit programs may dilute your ownership interest," "Pro
Forma Data"
and
"Our Management — Benefit Plans — Future Equity Incentive Plan."
29
Table of Contents
Regulatory Capital Compliance
At June 30, 2009, Athens Federal Community Bank exceeded all regulatory capital requirements.
The following table presents Athens Federal Community Bank's capital position relative to its
regulatory capital requirements at June 30, 2009, on a historical and a pro forma basis. The table
reflects receipt by Athens Federal Community Bank of 50% of the net proceeds of the offering. For
purposes of the table, the amount expected to be borrowed by the employee stock ownership plan is
deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro
forma capital calculations presented below, see
"Use of Proceeds," "Capitalization"
and
"Pro Forma
Data."
The definitions of the terms used in the table are those provided in the capital
regulations issued by the Office of Thrift Supervision. For a discussion of the capital standards
applicable to Athens Federal Community Bank, see
"Regulation and Supervision — Regulation of
Federal Savings Associations — Capital Requirements."
Pro Forma at June 30, 2009
15% Above
Minimum of
Midpoint of
Maximum of
Maximum of
Offering Range
Offering Range
Offering Range
Offering Range
Historical at
1,515,000 Shares
1,800,000 Shares
2,085,000 Shares
2,412,750 Shares
June 30, 2009
At $10.00 Per Share
At $10.00 Per Share
At $10.00 Per Share
At $10.00
Per Share
Percent
Percent
Percent
Percent
Percent
of
of
of
of
of
(Dollars in thousands)
Amount
Assets (1)
Amount
Assets
Amount
Assets
Amount
Assets
Amount
Assets
Total capital under generally
accepted accounting
principles
$
25,331
10.4
%
$
31,024
12.4
%
$
32,221
12.8
%
$
33,418
13.2
%
$
34,795
13.7
%
Tangible Capital:
Capital level (2)
$
24,682
10.2
%
$
30,375
12.2
%
$
31,572
12.6
%
$
32,769
13.0
%
$
34,146
13.5
%
Requirement
3,635
1.5
3,739
1.5
3,761
1.5
3,782
1.5
3,807
1.5
Excess
$
21,047
8.7
%
$
26,636
10.7
%
$
27,811
11.1
%
$
28,987
11.5
%
$
30,339
12.0
%
Core Capital:
Capital level (2)
$
24,682
10.2
%
$
30,375
12.2
%
$
31,572
12.6
%
$
32,769
13.0
%
$
34,146
13.5
%
Requirement
9,692
4.0
9,972
4.0
10,029
4.0
10,086
4.0
10,151
4.0
Excess
$
14,990
6.2
%
$
20,403
8.2
%
$
21,543
8.6
%
22,683
9.0
%
$
23,995
9.5
%
Tier 1 Risk-Based Capital:
Capital level
$
24,682
13.8
%
$
30,375
16.8
%
$
31,572
17.5
%
$
32,769
18.1
%
$
34,146
18.8
%
Requirement
7,163
4.0
7,219
4.0
7,231
4.0
7,242
4.0
7,255
4.0
Excess
$
17,519
9.8
%
$
23,156
12.8
%
$
24,341
13.5
%
$
25,527
14.1
%
$
26,891
14.8
%
Total Risk-Based Capital:
Total risk-based capital (3)
$
26,927
15.0
%
$
32,620
18.1
%
$
33,817
18.7
%
$
35,014
19.3
%
$
36,391
20.1
%
Requirement
14,327
8.0
14,439
8.0
14,461
8.0
14,484
8.0
14,510
8.0
Excess
$
12,600
7.0
%
$
18,181
10.1
%
$
19,356
10.7
%
$
20,530
11.3
%
$
21,880
12.1
%
Reconciliation of capital
infusion to Athens Federal
Community Bank:
Net proceeds of offering
$
13,970
$
16,820
$
19,670
$
22,948
Proceeds to Athens Federal
Community Bank
6,985
8,410
9,835
11,474
Less: stock acquired by
ESOP
1,292
1,520
1,748
2,010
Pro forma increase in
GAAP and regulatory
capital
$
5,693
$
6,890
$
8,087
$
9,464
(1)
Tangible capital and core capital levels are shown as a percentage of adjusted total assets
of $242.3 million. Risk-based capital levels are shown as a percentage of risk-weighted
assets of $179.1 million.
(2)
See note 10 of the notes to consolidated financial statements for a reconciliation of total
capital under generally accepted accounting principles and each of tangible capital, core
capital, Tier 1 risked based capital and total risk-based capital.
(3)
Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20%
risk-weighting.
30
Table of Contents
Pro Forma Data
The following tables show information about our net income and shareholders' equity reflecting
the sale of common stock in the offering. The information provided illustrates our pro forma net
income and shareholders' equity based on the sale of common stock at the minimum of the offering
range, the midpoint of the offering range, the maximum of the offering range and 15% above the
maximum of the offering range. The actual net proceeds from the sale of the common stock cannot be
determined until the offering is completed. Net proceeds indicated in the following tables are
based upon the following assumptions:
•
All shares of stock will be sold in the subscription and community offerings;
•
Our employee stock ownership plan will purchase a number of shares equal to 8% of
the sum of the shares sold in the offering and contributed to the charitable foundation
with a loan from Athens Bancshares Corporation that will be repaid in equal
installments over 15 years;
•
Keefe, Bruyette & Woods, Inc. will receive a success fee equal to the greater of:
(i) $200,000 or (ii) 1.125% of the aggregate purchase price of the shares sold in the
offering, except that no fee will be paid with respect to (a) shares purchased by the
employee stock ownership plan or by our officers, directors and employees and members
of their immediate families and (b) shares contributed to the charitable foundation;
•
Total expenses of the offering, excluding fees paid to Keefe, Bruyette & Woods,
Inc., will be approximately $980,000; and
•
We will make a charitable contribution of 100,000 shares of Athens Bancshares
Corporation, with an assumed value of $10.00 per share, and $100,000 in cash.
Actual expenses may vary from this estimate, and the amount of fees paid to Keefe, Bruyette &
Woods, Inc. (and potentially other broker-dealers) will depend upon whether a syndicate of
broker-dealers or other means is necessary to sell the shares, and other factors.
Pro forma net income for the six months ended June 30, 2009 and the year ended December 31,
2008 has been calculated as if the offering were completed at the beginning of the period, and the
net proceeds had been invested at 1.18% for the six months ended June 30, 2009 and 0.87% for the
year ended December 31, 2008, which represents the two-year treasury rate at June 30, 2009. We
believe that the two-year treasury rate at June 30, 2009 represents a more realistic yield on the
investment of the offering proceeds than the arithmetic average of the weighted average yield
earned on our interest-earning assets and the weighted average rate paid on our deposits, which is
the reinvestment rate required by Office of Thrift Supervision regulations.
A pro forma after-tax return of 0.78% is used for the six months ended June 30, 2009 and 0.57%
for the year ended December 31, 2008, after giving effect to a combined federal and state income
tax rate of 34% for each period. Historical and pro forma per share amounts have been calculated
by dividing historical and pro forma amounts by the number of shares of common stock indicated in
the tables.
When reviewing the following tables you should consider the following:
•
The final column gives effect to a 15% increase in the offering range, which may
occur without any further notice if Keller & Company increases its appraisal to reflect
the results of this offering, changes in our financial condition or results of
operations or changes in market conditions after the offering begins. See
"The
Conversion and Stock Offering — How We Determined the Offering Range and the $10.00
Per Share Purchase Price."
•
Since funds on deposit at Athens Federal Community Bank may be withdrawn to purchase shares of common stock, the amount of funds available for investment will be reduced by
the amount of
31
Table of Contents
withdrawals for stock purchases. The pro forma tables do not reflect withdrawals
from deposit accounts.
•
Historical per share amounts have been computed as if the shares of common stock
expected to be issued in the offering had been outstanding at the beginning of the
period covered by the table. However, neither historical nor pro forma shareholders'
equity has been adjusted to reflect the investment of the estimated net proceeds from
the sale of the shares in the offering, the additional employee stock ownership plan
expense or the proposed equity incentive plan.
•
Pro forma shareholders' equity ("book value") represents the difference between the
stated amounts of our assets and liabilities. Pro forma tangible shareholders' equity
excludes intangible assets. Book value amounts do not represent fair market values or
amounts available for distribution to shareholders in the unlikely event of
liquidation. The amounts shown do not reflect the federal income tax consequences of
the restoration to income of Athens Federal Community Bank's special bad debt reserves
for income tax purposes or give effect to the liquidation account in the event of
liquidation, which would be required in the unlikely event of liquidation. See
"Federal and State Taxation"
and
"The Conversion and Stock Offering — Effects of
Conversion to Stock Form — Liquidation Account."
•
The amounts shown as pro forma shareholders' equity per share do not represent
possible future price appreciation of our common stock.
The following pro forma data may not represent the actual financial effects of the offering or
our operating results after the offering. The pro forma data relies exclusively on the assumptions
outlined above and in the notes to the pro forma tables. The pro forma data does not represent the
fair market value of our common stock, the current fair market value of our assets or liabilities,
or the amount of money that would be available for distribution to shareholders if we are
liquidated after the offering.
32
Table of Contents
We are offering our common stock on a best efforts basis. We must sell a minimum of 1,515,000
shares to complete the offering.
Six Months Ended June 30, 2009
15% Above
Minimum of
Midpoint of
Maximum of
Maximum of
Offering
Offering
Offering
Offering
Range
Range
Range
Range
1,515,000
1,800,000
2,085,000
2,412,750
Shares
Shares
Shares
Shares
at $10.00
at $10.00
at $10.00
at $10.00
(Dollars in thousands, except per share amounts)
Per Share
Per Share
Per Share
Per Share
Gross proceeds
$
15,150
$
18,000
$
20,850
$
24,128
Less: offering expenses
(1,180
)
(1,180
)
(1,180
)
(1,180
)
Estimated net conversion proceeds
13,970
16,820
19,670
22,948
Less: cash contribution to charitable foundation
(100
)
(100
)
(100
)
(100
)
Less: common stock acquired by employee stock ownership plan (1)
(1,292
)
(1,520
)
(1,748
)
(2,010
)
Less: common stock to be acquired by equity incentive plan (2)
(646
)
(760
)
(874
)
(1,005
)
Net investable proceeds
$
11,932
$
14,440
$
16,948
$
19,833
Pro Forma Net Income:
Pro forma net income (loss) (3):
Historical
$
1,084
$
1,084
$
1,084
$
1,084
Pro forma income on net investable proceeds
46
56
66
77
Less: pro forma employee stock ownership plan adjustments (1)
(28
)
(33
)
(38
)
(44
)
Less: pro forma restricted stock award expense (2)
(43
)
(50
)
(58
)
(66
)
Less: pro forma stock option expense (4)
(61
)
(72
)
(83
)
(95
)
Pro forma net income (loss)
$
998
$
985
$
971
$
956
Pro forma net income (loss) per share (3):
Historical
$
0.73
$
0.62
$
0.54
$
0.47
Pro forma income on net investable proceeds
0.03
0.03
0.03
0.03
Less: pro forma employee stock ownership plan adjustments (1)
(0.02
)
(0.02
)
(0.02
)
(0.02
)
Less: pro forma restricted stock award expense (2)
(0.03
)
(0.03
)
(0.03
)
(0.03
)
Less: pro forma stock option expense (4)
(0.04
)
(0.04
)
(0.04
)
(0.04
)
Pro forma net income (loss) per share
$
0.67
$
0.56
$
0.48
$
0.41
Offering price as a multiple of pro forma net income per share (annualized)
7.46
x
8.93
x
10.42
x
12.20
x
Number of shares used to calculate pro forma net income per share (5)
1,490,107
1,753,067
2,016,027
2,318,431
Pro Forma Shareholders' Equity:
Pro forma shareholders' equity (book value) (5):
Historical
$
25,331
$
25,331
$
25,331
$
25,331
Estimated net proceeds
13,970
16,820
19,670
22,948
Plus: common stock issued to charitable foundation
1,000
1,000
1,000
1,000
Less: expense net of tax of contribution to charitable foundation
(726
)
(726
)
(726
)
(726
)
Less: common stock acquired by employee stock ownership plan (1)
(1,292
)
(1,520
)
(1,748
)
(2,010
)
Less: common stock to be acquired by equity incentive plan (2)
(646
)
(760
)
(874
)
(1,005
)
Pro forma shareholders' equity
$
37,637
$
40,145
$
42,653
$
45,538
Pro forma shareholders' equity per share (5):
Historical
$
15.68
$
13.33
$
11.59
$
10.08
Estimated net proceeds
8.65
8.85
9.00
9.13
Plus: common stock issued to charitable foundation
0.62
0.53
0.46
0.40
Less: expense net of tax contribution to charitable foundation
(0.45
)
(0.38
)
(0.33
)
(0.29
)
Less: common stock acquired by employee stock ownership plan (1)
(0.80
)
(0.80
)
(0.80
)
(0.80
)
Less: common stock to be acquired by equity incentive plan (2)
(0.40
)
(0.40
)
(0.40
)
(0.40
)
Pro forma shareholders' equity per share
$
23.30
$
21.13
$
19.52
$
18.12
Offering price as a percentage of pro forma shareholders' equity per share
42.92
%
47.33
%
51.23
%
55.19
%
Number of shares used to calculate pro forma shareholders' equity
per share (5)
1,615,000
1,900,000
2,185,000
2,512,750
(footnotes on pages
and
)
33
Table of Contents
Year Ended December 31, 2008
15% Above
Minimum of
Midpoint of
Maximum of
Maximum of
Offering
Offering
Offering
Offering
Range
Range
Range
Range
1,515,000
1,800,000
2,085,000
2,412,750
Shares
Shares
Shares
Shares
at $10.00
at $10.00
at $10.00
at $10.00
(Dollars in thousands, except per share amounts)
Per Share
Per Share
Per Share
Per Share
Gross proceeds
$
15,150
$
18,000
$
20,850
$
24,128
Less: offering expenses
(1,180
)
(1,180
)
(1,180
)
(1,180
)
Estimated net conversion proceeds
13,970
16,820
19,670
22,948
Less: cash contribution to charitable foundation
(100
)
(100
)
(100
)
(100
)
Less: common stock acquired by employee stock ownership plan (1)
(1,292
)
(1,520
)
(1,748
)
(2,010
)
Less: common stock to be acquired by equity incentive plan (2)
(646
)
(760
)
(874
)
(1,005
)
Net investable proceeds
$
11,932
$
14,440
$
16,948
$
19,833
Pro Forma Net Income:
Pro forma net income (loss) (3):
Historical
$
1,109
$
1,109
$
1,109
$
1,109
Pro forma income on net investable proceeds
69
83
97
114
Less: pro forma employee stock ownership plan adjustments (1)
(57
)
(67
)
(77
)
(88
)
Less: pro forma restricted stock award expense (2)
(85
)
(100
)
(115
)
(133
)
Less: pro forma stock option expense (4)
(123
)
(144
)
(166
)
(191
)
Pro forma net income (loss)
$
913
$
881
$
848
$
811
Pro forma net income (loss) per share (3):
Historical
$
0.74
$
0.63
$
0.55
$
0.48
Pro forma income on net investable proceeds
0.05
0.05
0.05
0.05
Less: pro forma employee stock ownership plan adjustments (1)
(0.04
)
(0.04
)
(0.04
)
(0.04
)
Less: pro forma restricted stock award expense (2)
(0.06
)
(0.06
)
(0.06
)
(0.06
)
Less: pro forma stock option expense (4)
(0.08
)
(0.08
)
(0.08
)
(0.08
)
Pro forma net income (loss) per share
$
0.61
$
0.50
$
0.42
$
0.35
Offering price as a multiple of pro forma net income per share (annualized)
16.39
x
20.00
x
23.81
x
28.57
x
Number of shares used to calculate pro forma net income per share (5)
1,494,413
1,758,133
2,021,853
2,325,131
Pro Forma Shareholders' Equity:
Pro forma shareholders' equity (book value) (5):
Historical
$
24,212
$
24,212
$
24,212
$
24,212
Estimated net proceeds
13,970
16,820
19,670
22,948
Plus: common stock issued to charitable foundation
1,000
1,000
1,000
1,000
Less: expense net of tax of contribution to charitable foundation
(726
)
(726
)
(726
)
(726
)
Less: common stock acquired by employee stock ownership plan (1)
(1,292
)
(1,520
)
(1,748
)
(2,010
)
Less: common stock to be acquired by equity incentive plan (2)
(646
)
(760
)
(874
)
(1,005
)
Pro forma shareholders' equity
$
36,518
$
39,026
$
41,534
$
44,419
Pro forma shareholders' equity per share (5):
Historical
$
14.99
$
12.74
$
11.08
$
9.64
Estimated net proceeds
8.65
8.85
9.00
9.13
Plus: common stock issued to charitable foundation
0.62
0.53
0.46
0.40
Less: expense net of tax contribution to charitable foundation
(0.45
)
(0.38
)
(0.33
)
(0.29
)
Less: common stock acquired by employee stock ownership plan (1)
(0.80
)
(0.80
)
(0.80
)
(0.80
)
Less: common stock to be acquired by equity incentive plan (2)
(0.40
)
(0.40
)
(0.40
)
(0.40
)
Pro forma shareholders' equity per share
$
22.61
$
20.54
$
19.01
$
17.68
Offering price as a percentage of pro forma shareholders' equity per share
44.23
%
48.69
%
52.60
%
56.56
%
Number of shares used to calculate pro forma shareholders' equity
per share (5)
1,615,000
1,900,000
2,185,000
2,512,750
(footnotes on pages
and
)
34
Table of Contents
*
Not meaningful.
(1)
Assumes that the employee stock ownership plan will acquire a number of shares of stock equal
to 8% of the sum of the shares sold in the offering and contributed to the charitable
foundation (129,200, 152,000, 174,800 and 201,020 shares at the minimum, midpoint, maximum and
adjusted maximum of the offering range, respectively). The employee stock ownership plan will
borrow the funds to acquire these shares from the net offering proceeds retained by Athens
Bancshares Corporation. The amount of this borrowing has been reflected as a reduction from
gross proceeds to determine estimated net investable proceeds. This borrowing will have an
interest rate equal to the prime rate as published in The Wall Street Journal, which is
currently 3.25%, and a term of 15 years. Athens Federal Community Bank intends to make
contributions to the employee stock ownership plan in amounts at least equal to the principal
and interest requirement of the debt. Interest income that Athens Bancshares Corporation will
earn on the loan will offset a portion of the compensation expense recorded by Athens Federal
Community Bank as it contributes to the employee stock ownership plan. As the debt is paid
down, shares will be released for allocation to participants' accounts and shareholders'
equity will be increased. The adjustment to pro forma net income for the employee stock
ownership plan reflects the after-tax compensation expense associated with the plan.
Applicable accounting principles require that compensation expense for the employee stock
ownership plan be based upon the market value of shares committed to be released and that
unallocated shares be excluded from earnings per share computations. An equal number of
shares (1/15 of the total, based on a 15-year loan) will be released each year over the term
of the loan. The valuation of shares committed to be released would be based upon the average
market value of the shares during the year, which, for purposes of this calculation, was
assumed to be equal to the $10.00 per share purchase price. If the average market value per
share is greater than $10.00 per share, total employee stock ownership plan expense would be
greater. See
"Our Management — Benefit Plans — Employee Stock Ownership Plan."
(2)
Assumes that Athens Bancshares Corporation will purchase in the open market a number of
shares of stock equal to 4% of the sum of the shares sold in the offering and contributed to
the charitable foundation (64,600, 76,000, 87,400 and 100,510 shares at the minimum, midpoint,
maximum and adjusted maximum of the offering range, respectively), that will be reissued as
restricted stock awards under an equity incentive plan to be adopted following the offering.
Purchases will be funded with cash on hand at Athens Bancshares Corporation or with dividends
paid to Athens Bancshares Corporation by Athens Federal Community Bank. The cost of these
shares has been reflected as a reduction from gross proceeds to determine estimated net
investable proceeds. In calculating the pro forma effect of the restricted stock awards, it
is assumed that the required shareholder approval has been received, that the shares used to
fund the awards were acquired at the beginning of the respective period and that the shares
were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued
shares of the common stock instead of shares repurchased in the open market would dilute the
ownership interests of existing shareholders by approximately 3.8%. The adjustment to pro
forma net income for the restricted stock awards reflects the after-tax compensation expense
associated with the awards. It is assumed that the fair market value of a share of Athens
Bancshares Corporation common stock was $10.00 at the time the awards were made, that shares
of restricted stock issued under the equity incentive plan vest 20% per year, that
compensation expense is recognized on a straight-line basis over each vesting period so that
20% of the value of the shares awarded was an amortized expense during each year, and that the
combined federal and state income tax rate was 34%. If the fair market value per share is
greater than $10.00 per share on the date shares are awarded under the equity incentive plan,
total equity incentive plan expense would be greater.
(3)
Does not give effect to the non-recurring expense that is expected to be recognized in late
2009 or early 2010 as a result of the contribution of common stock to the charitable
foundation.
The following table shows the estimated after-tax expense associated with the contribution to
the foundation, as well as pro forma net loss and pro forma net loss per share assuming the
contribution to the foundation was expensed during the periods presented.
35
Table of Contents
15% Above
Minimum of
Midpoint of
Maximum of
Maximum of
(Dollars in thousands, except per share amounts)
Offering Range
Offering Range
Offering Range
Offering Range
Before-tax expense of contribution to
foundation:
Six months ended June 30, 2009
$
1,100
$
1,100
$
1,100
$
1,100
Year ended December 31, 2008
1,100
1,100
1,100
1,100
After-tax expense of contribution to foundation:
Six months ended June 30, 2009
$
726
$
726
$
726
$
726
Year ended December 31, 2008
726
726
726
726
Pro forma net income:
Six months ended June 30, 2009
$
272
$
259
$
245
$
230
Year ended December 31, 2008
187
155
122
85
Pro forma net income per share:
Six months ended June 30, 2009
$
0.18
$
0.15
$
0.12
$
0.10
Year ended December 31, 2008
0.13
0.09
0.06
0.04
Pro forma tax benefit:
Six months ended June 30, 2009
$
374
$
374
$
374
$
374
Year ended December 31, 2008
374
374
374
374
The before-tax expense of the contribution to the foundation is based upon 100,000 shares being
contributed at a cost of $10.00 per share and a $100,000 cash contribution. The pro forma data
assume that we will realize 100.0% of the income tax benefit as a result of the contribution to
the foundation based on a 34% income tax rate. The realization of the tax benefit is limited
annually to 10.0% of our annual taxable income. However, for federal and state tax purposes, we
can carry forward any unused portion of the deduction for five years following the year in which
the contribution is made. As reflected in the table above, the assumed tax benefit at a 34% tax
rate reduces the before-tax expense of the charitable foundation for the year ended December 31,
2008 by $374,000 at each of the minimum, midpoint, maximum and 15% above the maximum of the
offering range. See
"Summary—We Will Form the Athens Federal Foundation."
(4)
The adjustment to pro forma net income for stock options reflects the after-tax compensation
expense associated with the stock options that may be granted under the equity incentive plan
expected to be adopted following the offering. If the equity incentive plan is approved by
shareholders, a number of shares equal to 10% of the sum of the number of shares sold in the
offering and contributed to the charitable foundation (161,500, 190,000, 218,500 and 251,275
shares at the minimum, midpoint, maximum and adjusted maximum of the offering range,
respectively) will be reserved for future issuance upon the exercise of stock options that may
be granted under the plan. Using the Black-Scholes option-pricing formula, the options are
assumed to have a value of $4.15 for each option, based on the following assumptions: exercise
price, $10.00; trading price on date of grant, $10.00; dividend yield, 0%; expected life, 5
years; expected volatility, 22.7%; and risk-free interest rate, 3.56%. Because there
currently is no market for Athens Bancshares Corporation common stock, the assumed expected
volatility is based on the SNL Index for all publicly-traded thrifts. The dividend yield is
assumed to be 0% because there is no history of dividend payments and the board of directors
has not expressed an intention to commence dividend payments upon completion of the offering.
It is assumed that stock options granted under the equity incentive plan vest 20% per year,
that compensation expense is recognized on a straight-line basis over each vesting period so
that 20% of the value of the options awarded was an amortized expense during each year, that
25% of the options awarded are non-qualified options and that the combined federal and state
income tax rate was 34%. If the fair market value per share is different than $10.00 per
share on the date options are awarded under the equity incentive plan, or if the assumptions
used in the option-pricing formula are different from those used in preparing this pro forma
data, the value of the stock options and the related expense would be different. Applicable
accounting standards do not prescribe a specific valuation technique to be used to estimate
the fair value of employee stock options. Athens Bancshares Corporation may use a valuation
technique other than the Black-Scholes option-pricing formula and that technique may produce a
different value. The issuance of authorized but unissued shares of common stock to satisfy
option exercises instead of shares repurchased in the open market would dilute the ownership
interests of existing shareholders by approximately 9.1%.
(5)
The number of shares used to calculate pro forma net income per share is equal to the total
number of shares to be outstanding upon completion of the offering, less the number of shares
purchased by the employee stock ownership plan not committed to be released within six months
or one year following the offering. The number of shares used to calculate pro forma
shareholders' equity per share equals the total number of shares to be outstanding upon
completion of the offering.
36
Table of Contents
Comparison of Independent Valuation and Pro Forma Financial
Information With and Without the Foundation
As set forth in the following table, if we do not establish and fund the Athens Federal
Foundation as part of the offering, Keller & Company estimates that our pro forma valuation would
be greater, which would have increased the amount of common stock offered for sale in the offering.
If the foundation were not established, there is no assurance that the updated appraisal that
Keller & Company will prepare at the closing of the offering would conclude that our pro forma
market value would be the same as the estimate set forth in the table below. The updated appraisal
will be based on the facts and circumstances existing at that time, including, among other things,
market and economic conditions.
The information presented in the following table is for comparative purposes only. It assumes
that the offering was completed at June 30, 2009, based on the assumptions set forth under
"Pro
Forma Data."
At the Maximum,
At the Minimum
At the Midpoint
At the Maximum
as Adjusted,
of Estimated
of Estimated
of Estimated
of Estimated
Valuation Range
Valuation Range
Valuation Range
Valuation Range
(Dollars in thousands, except per share
With
No
With
No
With
No
With
No
amount)
Foundation
Foundation
Foundation
Foundation
Foundation
Foundation
Foundation
Foundation
Estimated offering amount (1)
$
15,150
$
17,000
$
18,000
$
20,000
$
20,850
$
23,000
$
24,128
$
26,450
Estimated pro forma valuation
16,150
17,000
19,000
20,000
21,850
23,000
25,128
26,450
Pro forma total assets
255,316
256,790
257,824
259,430
259,958
262,070
263,216
265,106
Pro forma total liabilities
217,679
217,679
217,679
217,679
217,305
217,679
217,678
217,679
Pro forma shareholders' equity
37,637
39,111
40,145
41,751
42,653
44,391
45,538
47,427
Pro forma net income (loss)
998
998
985
984
971
970
956
953
Pro forma shareholders' equity per share
23.30
23.01
21.13
20.88
19.52
19.30
18.12
17.93
Pro forma net income (loss) per share
0.67
0.63
0.56
0.53
0.48
0.45
0.41
0.39
Pro Forma Pricing Ratios:
Offering price as a percentage of
pro forma shareholders' equity
42.92
%
43.46
%
47.33
%
47.89
%
51.23
%
51.81
%
55.19
%
55.77
%
Offering price to net income
7.46
7.94
8.93
9.43
10.42
11.11
12.20
12.82
Offering price to assets
6.33
6.62
7.37
7.71
8.41
8.78
9.55
9.98
Pro Forma Financial Ratios:
Return on assets
0.78
%
0.78
%
0.76
%
0.76
%
0.75
%
0.74
%
0.73
%
0.72
%
Return on shareholders' equity
5.30
5.10
4.91
4.71
4.55
4.37
4.20
4.02
Shareholders' equity to total assets
14.74
15.23
15.57
16.09
16.41
16.94
17.30
17.89
(1)
Based on independent valuation prepared by Keller & Company as of August 19, 2009.
37
Table of Contents
Our Business
General
Athens Bancshares Corporation, a Tennessee corporation, was incorporated in September 2009 to
become the holding company for Athens Federal Community Bank upon completion of the conversion.
Before the completion of the conversion, Athens Bancshares Corporation has not engaged in any
significant activities other than organizational activities. Following completion of the
conversion, Athens Bancshares Corporation's business activity will be the ownership of the
outstanding capital stock of Athens Federal Community Bank. Athens Bancshares Corporation will not
own or lease any property but will instead use the premises, equipment and other property of Athens
Federal Community Bank with the payment of appropriate rental fees, as required by applicable law
and regulations, under the terms of an expense allocation agreement. In the future, Athens
Bancshares Corporation may acquire or organize other operating subsidiaries; however, there are no
current plans, arrangements, agreements or understandings, written or oral, to do so.
Founded in 1934, Athens Federal Community Bank is a federally chartered savings bank
headquartered in Athens, Tennessee. We operate as a community-oriented financial institution
offering traditional financial services to consumers and businesses in our primary market area. We
attract deposits from the general public and use those funds to originate primarily one-to
four-family residential mortgage loans and, to a lesser extent, non-residential real estate loans,
construction loans, land and land development loans, multi-family real estate loans, consumer loans
and commercial business loans. We conduct our lending and deposit activities primarily with
individuals and small businesses in our primary market area.
We have historically maintained offices in McMinn County, Tennessee. However, in recent
years, we have attempted to expand our market presence within the southeast Tennessee region,
particularly in Monroe and Bradley Counties, to capitalize on growth opportunities in the area. In
December 2005, we opened a full service branch in Madisonville, Tennessee, the county seat of
Monroe County. We also opened two full service branch offices in Cleveland, Tennessee, which is
located in Bradley County, in early 2007. In connection with our expansion into the Cleveland
market area, we hired a regional president and additional experienced commercial lending and credit
administration personnel. At June 30, 2009, we had a combined $15.4 million in deposits and $59.3
million in loans outstanding at our two Cleveland branches.
Our website address is www.athensfederal.com. Information on our website should not be
considered a part of this prospectus.
Market Area
We are headquartered in Athens, Tennessee, which is located in southeastern Tennessee along
Interstate 75, approximately half way between Knoxville, Tennessee and Chattanooga, Tennessee. We
consider McMinn, Monroe and Bradley Counties, Tennessee, and the surrounding areas to be our
primary market area. According to published statistics, the 2009 populations of McMinn, Monroe and
Bradley Counties were approximately 49,000, 39,000 and 88,000, respectively. From 2000 to 2009,
McMinn County's population increased at a 0.7% annual rate, which fell below the comparable 1.1%
national and Tennessee annual population growth rates. During that same time period, Monroe and
Bradley Counties recorded annual population growth rates of 1.8% and 1.1%, respectively. Projected
five-year population growth rates for McMinn, Monroe and Bradley Counties reflect modest declines
from the previous 2000 to 2009 growth rates.
The top employment sectors in our primary market area currently consist of manufacturing
services, particularly with respect to the automobile manufacturing industry, and, to a lesser
extent, wholesale and retail trade services, government services and educational, health care and
social assistance services. Our local economy has been negatively impacted by the economic
recession in recent months, which has resulted in increased job losses in the manufacturing
services sector. However, at the same time, our local economy has also benefited from new
manufacturing activity entering the market which is expected to create additional jobs for local
workers. Notably, Volkswagen of America, Inc. and Wacker Chemie AG, a leading manufacturer of
solar panels, are currently constructing manufacturing plants in our primary market area. Our
local economy has also been positively impacted
38
Table of Contents
by retirees relocating to our primary market area, as the southeastern Tennessee region has
become an increasingly attractive destination for retirees due to its affordable housing prices,
temperate climate and lack of state income tax.
Competition
We face significant competition for the attraction of deposits and origination of loans. Our
most direct competition for deposits has historically come from the several financial institutions
operating in our primary market area and from other financial service companies such as securities
brokerage firms, credit unions and insurance companies. We also face competition for investors'
funds from money market funds, mutual funds and other corporate and government securities. At June
30, 2008, which is the most recent date for which data is available from the Federal Deposit
Insurance Corporation, we held approximately 20.2% of the deposits in McMinn County, Tennessee,
3.2% of the deposits in Monroe County, Tennessee and 1.1% of the deposits in Bradley County,
Tennessee. This data does not reflect deposits held by credit unions with which we also compete.
In addition, banks owned by large national and regional holding companies and other community-based
banks also operate in our primary market area. Some of these institutions are larger than us and,
therefore, may have greater resources.
Our competition for loans comes primarily from financial institutions, including credit
unions, in our primary market area and from other financial service providers, such as mortgage
companies and mortgage brokers. Competition for loans also comes from non-depository financial
service companies entering the mortgage market, such as insurance companies, securities companies
and specialty finance companies.
We expect competition to increase in the future as a result of legislative, regulatory and
technological changes and the continuing trend of consolidation in the financial services industry.
Technological advances, for example, have lowered barriers to entry, allowed banks to expand their
geographic reach by providing services over the Internet, and made it possible for non-depository
institutions to offer products and services that traditionally have been provided by banks.
Changes in federal law now permit affiliation among banks, securities firms and insurance
companies, which promotes a competitive environment in the financial services industry.
Competition for deposits and the origination of loans could limit our growth in the future.
Lending Activities
General.
The largest segment of our loan portfolio is real estate mortgage loans, primarily
one- to four-family residential mortgage loans, and, to a lesser extent, non-residential real
estate loans, construction loans, land and land development loans, multi-family real estate loans,
consumer loans and commercial business loans. We originate loans for investment purposes, although
we generally sell our fixed-rate residential mortgage loans into the secondary market with
servicing retained.
We intend to continue to emphasize residential lending, while also concentrating on ways to
expand our commercial real estate and commercial business lending activities with a focus on
serving small businesses and emphasizing relationship banking in our primary market area. We do
not offer, and have not offered, Alt-A, sub-prime or no-documentation mortgage loans.
One-to Four-Family Residential Loans.
At June 30, 2009, we had $77.2 million in one- to
four-family residential loans, which represented 39.5% of our total loan portfolio. Our
origination of residential mortgage loans enables borrowers to purchase or refinance existing homes
located in our primary market area. In recent years, a significant portion of the residential
mortgage loans that we have originated have been secured by non-owner occupied properties. Loans
secured by non-owner occupied properties generally carry a greater risk of loss than loans secured
by owner-occupied properties. See
"Risk Factors — Risks Related to Our Business — Our
concentration in non-owner occupied real estate loans may expose us to increased credit risk."
Our residential lending policies and procedures generally conform to the secondary market
guidelines. We generally offer a mix of adjustable rate mortgage loans and fixed-rate mortgage
loans with terms of up to 30 years. Borrower demand for adjustable-rate loans compared to
fixed-rate loans is a function of the level of interest rates, the expectations of changes in the
level of interest rates, and the difference between the interest rates and loan fees offered for
fixed-rate mortgage loans as compared to an initially discounted interest rate and loan fees for
multi-year adjustable-rate mortgages. The relative amount of fixed-rate mortgage loans and
adjustable-rate mortgage loans that
39
Table of Contents
can be originated at any time is largely determined by the demand for each in a competitive
environment. The loan fees, interest rates and other provisions of mortgage loans are determined
by us based on our own pricing criteria and competitive market conditions.
Interest rates and payments on our adjustable-rate mortgage loans generally adjust annually
after an initial fixed period that typically ranges from one to five years. Interest rates and
payments on our adjustable-rate loans generally are indexed to the National Monthly Median Cost of
Funds or the one year U.S. Treasury Constant Maturity Index.
While one-to four-family residential real estate loans are normally originated with up to
30-year terms, such loans typically remain outstanding for substantially shorter periods because
borrowers often prepay their loans in full either upon sale of the property pledged as security or
upon refinancing the original loan. Therefore, average loan maturity is a function of, among other
factors, the level of purchase and sale activity in the real estate market, prevailing interest
rates and the interest rates payable on outstanding loans on a regular basis. We do not offer
residential mortgage loans with negative amortization and generally do not offer interest-only
residential mortgage loans.
We generally do not make owner occupied one- to four-family residential real estate loans with
loan-to-value ratios exceeding 95%. Loans with loan-to-value ratios in excess of 89% typically
require private mortgage insurance. In addition, we generally do not make not make non-owner
occupied one- to four-family residential real estate loans with loan-to-value ratios exceeding 85%.
We generally require all properties securing mortgage loans to be appraised by a board-approved
independent appraiser. We also generally require title insurance on all first mortgage loans.
Borrowers must obtain hazard insurance, and flood insurance is required for all loans located in
flood hazard areas.
Non-residential Real Estate Loans.
We offer fixed- and adjustable-rate mortgage loans secured
by non-residential real estate. At June 30, 2009, non-residential real estate loans totaled $36.2
million, or 18.5% of our total loan portfolio. Our non-residential real estate loans are generally
secured by small to moderately-sized office and retail properties, churches and hotels located both
in and out of our primary market area. With respect to non-residential real estate loans, we
typically require that either the borrower or the property securing the loan be located in our
primary market area.
We originate fixed-rate non-residential real estate loans, generally with terms of three to
five years and payments based on an amortization schedule of up to 30 years, resulting in "balloon"
balances at maturity. We also offer adjustable-rate commercial real estate loans, generally with
terms up to 30 years and with interest rates typically equal to the prime lending rate as reported
in the Wall Street Journal plus an applicable margin. Loans are secured by first mortgages,
generally are originated with a maximum loan-to-value ratio of 80% and may require specified debt
service coverage ratios depending on the characteristics of the project. Rates and other terms on
such loans generally depend on our assessment of credit risk after considering such factors as the
borrower's financial condition and credit history, loan-to-value ratio, debt service coverage ratio
and other factors. Our non-residential real estate loans typically provide for an interest rate
floor of 5.0%.
At June 30, 2009, our largest non-residential real estate loan had an outstanding balance of
$3.4 million. This loan, which was originated in April 2008 and is secured by an office building
and fast food restaurant in Cleveland, Tennessee and a fast food restaurant in North Carolina, was
performing in accordance with its original terms at June 30, 2009.
Construction Loans.
We originate construction loans for one-to four-family homes and, to a
much lesser extent, commercial properties, such as retail shops and office units, and multi-family
properties. At June 30, 2009, residential and non-residential construction loans totaled $12.4
million, which represented 6.4% of our total loan portfolio. Construction loans are typically for
a term of 12 months with monthly interest only payments, and generally are followed by an automatic
conversion to a 15-year to 30-year permanent loan with monthly payments of principal and interest.
Except for speculative loans, discussed below, residential construction loans are generally only
made to homeowners and the repayment of such loans generally comes from the proceeds of a permanent
mortgage loan for which a commitment is typically in place when the construction loan is
originated. Interest rates on these loans are generally tied to either the National Monthly Median
Cost of Funds or the One Year U.S.
40
Table of Contents
Treasury Constant Maturity Index. We generally require a maximum loan-to-value ratio of 80% for
all construction loans. We generally disburse funds on a percentage-of-completion basis following
an inspection by a third party inspector.
We also originate speculative construction loans to builders who have not identified a buyer
for the completed property at the time of origination. We generally limit speculative construction
loans to a group of well-established builders in our primary market area and we also limit the
number of projects with each builder. At June 30, 2009, we had approved commitments for
speculative construction loans of $8.1 million, of which $5.0 million was outstanding. We
generally require a maximum loan-to-value ratio of 80% for speculative construction loans.
At June 30, 2009, our largest non-speculative construction loan relationship was a commitment
of $2.8 million, all of which was outstanding. This relationship was performing according to its
original terms at June 30, 2009. At June 30, 2009, our largest speculative construction loan
relationships included two loans of $2.0 million each. The first had an outstanding balance of
$1.4 million and the second had an outstanding balance of $1.3 million at June 30, 2009. Both
loans were performing according to their original terms at June 30, 2009.
Land and Land Development Loans.
We originate loans to individuals and developers for the
purpose of developing vacant land in our primary market area, typically for building an
individual's future residence or, in the case of a developer, residential subdivisions. At June
30, 2009, land and land development loans totaled $17.0 million, which represented 8.7% of our
total loan portfolio. Land development loans, which are offered for terms of up to 12 months, are
generally indexed to the prime rate as reported in the Wall Street Journal plus an applicable
margin. We generally require a maximum loan-to-value ratio to 75% of the discounted market value
based upon expected cash flows upon completion of the project. We also originate loans to
individuals secured by undeveloped land held for investment purposes. At June 30, 2009, our
largest land development loan had an outstanding balance of $1.9 million and was performing in
accordance with its original terms at June 30, 2009.
Multi-Family Real Estate Loans.
We offer multi-family mortgage loans that are generally
secured by properties in our primary market area. At June 30, 2009, multi-family loans totaled
$14.6 million, which represented 7.5% of our total loan portfolio. Multi-family loans are secured
by first mortgages and generally are originated with a maximum loan-to-value ratio of 85% and
generally require specified debt service coverage ratios depending on the characteristics of the
project. Rates and other terms on such loans generally depend on our assessment of the credit risk
after considering such factors as the borrower's financial condition and credit history,
loan-to-value ratio, debt service coverage ratio and other factors. At June 30, 2009, our largest
multi-family real estate loan had an outstanding balance of $3.8 million, was secured by an
apartment complex located in northwest Georgia and was performing in accordance with its original
terms at June 30, 2009.
Consumer Loans.
We offer a variety of consumer loans, including home equity loans and lines
of credit, automobile loans, and loans secured by deposits. At June 30, 2009, consumer loans
totaled $25.8 million, or 13.2% of our total loan portfolio. Our consumer loan portfolio consists
primarily of home equity loans, both fixed-rate amortizing term loans with terms up to 15 years and
adjustable rate lines of credit with interest rates indexed to the prime rate as published in the
Wall Street Journal. Consumer loans typically have shorter maturities and higher interest rates
than traditional one- to four-family lending. We typically do not originate home equity loans with
loan-to-value ratios exceeding 89%, including any first mortgage loan balance. The procedures for
underwriting consumer loans include an assessment of the applicant's payment history on other debts
and ability to meet existing obligations and payments on the proposed loan.
Through our operating subsidiary, Southland Finance, Inc., we also offer consumer finance
loans secured by used automobiles, televisions and various other personal property to borrowers
with historically lower credit scores. These consumer finance loans are partially funded by a $2.0
million line of credit with us. Loans originated at Southland Finance, Inc. are generally made for
terms of 12 to 36 months and have an average loan balance of approximately $4,500. We generally
maintain separate underwriting standards and more aggressive collection activity for these consumer
finance loans.
Commercial Business Loans.
We typically offer commercial business loans to small businesses
located in our primary market area. At June 30, 2009, commercial business loans totaled $12.2
million, which
41
Table of Contents
represented 6.2% of our total loan portfolio. Commercial business loans consist of floating rate
loans indexed to the prime rate as published in the Wall Street Journal plus an applicable margin
and fixed rate loans for terms of up to five years. Our commercial business loan portfolio
consists primarily of loans that are secured by land or equipment but also includes a smaller
amount of unsecured loans for purposes of financing expansion or providing working capital for
general business purposes. Key loan terms vary depending on the collateral, the borrower's
financial condition, credit history and other relevant factors.
Loan Underwriting
Adjustable-Rate Loans.
While we anticipate that adjustable-rate loans will better offset the
adverse effects of an increase in interest rates as compared to fixed-rate mortgages, an increased
monthly mortgage payment required of adjustable-rate loan borrowers in a rising interest rate
environment could cause an increase in delinquencies and defaults. The marketability of the
underlying property also may be adversely affected in a high interest rate environment. In
addition, although adjustable-rate mortgage loans make our asset base more responsive to changes in
interest rates, the extent of this interest sensitivity is limited by the annual and lifetime
interest rate adjustment limits.
Non-Owner Occupied Residential Real Estate Loans.
Loans secured by rental properties
represent a unique credit risk to us and, as a result, we adhere to special underwriting
guidelines. Of primary concern in non-owner occupied real estate lending is the consistency of
rental income of the property. Payments on loans secured by rental properties often depend on the
maintenance of the property and the payment of rent by its tenants. Payments on loans secured by
rental properties often depend on successful operation and management of the properties. As a
result, repayment of such loans may be subject to adverse conditions in the real estate market or
the economy. To monitor cash flows on rental properties, we require borrowers and loan guarantors,
if any, to provide annual financial statements and we consider and review a rental income cash flow
analysis of the borrower and consider the net operating income of the property, the borrower's
expertise, credit history and profitability, and the value of the underlying property. We generally
require collateral on these loans to be a first mortgage along with an assignment of rents and
leases.
Non-residential and Multi-Family Real Estate Loans.
Loans secured by multi-family and
commercial real estate generally have larger balances and involve a greater degree of risk than
one- to four-family residential mortgage loans. Of primary concern in multi-family and commercial
real estate lending is the borrower's creditworthiness and the feasibility and cash flow potential
of the project. Payments on loans secured by income properties often depend on successful
operation and management of the properties. As a result, repayment of such loans may be subject to
adverse conditions in the real estate market or the economy. We apply what we believe to be
conservative underwriting standards when originating commercial loans and seek to limit our
exposure to lending concentrations to related borrowers, types of business and geographies, as well
as seeking to participate with other banks in both buying and selling larger loans of this nature.
Management has hired experienced lending officers and credit management personnel over the past
several years in order to safely increase this type of lending. To monitor cash flows on income
properties, we require borrowers and loan guarantors, if any, to provide annual financial
statements on multi-family and commercial real estate loans. In reaching a decision on whether to
make a multi-family or commercial real estate loan, we consider and review a global cash flow
analysis of the borrower and consider the net operating income of the property, the borrower's
expertise, credit history and profitability, and the value of the underlying property. An
environmental survey or environmental risk insurance is obtained when the possibility exists that
hazardous materials may have existed on the site, or the site may have been impacted by adjoining
properties that handled hazardous materials.
Construction, Land and Land Development Loans.
Construction financing is generally considered
to involve a higher degree of risk of loss than long-term financing on improved, occupied real
estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial
estimate of the property's value at completion of construction and the estimated cost of
construction. During the construction phase, a number of factors could result in delays and cost
overruns. If the estimate of construction costs proves to be inaccurate, we may be required to
advance funds beyond the amount originally committed to permit completion of the building. If the
estimate of value proves to be inaccurate, we may be confronted, at or before the maturity of the
loan, with a building having a value which is insufficient to assure full repayment if liquidation
is required. If we are forced to foreclose on a building before or at completion due to a default,
we may be unable to recover all of the unpaid balance of, and
42
Table of Contents
accrued interest on, the loan as well as related foreclosure and holding costs. In addition,
speculative construction loans, which are loans made to home builders who, at the time of loan
origination, have not yet secured an end buyer for the home under construction, typically carry
higher risks than those associated with traditional construction loans. These increased risks
arise because of the risk that there will be inadequate demand to ensure the sale of the property
within an acceptable time. As a result, in addition to the risks associated with traditional
construction loans, speculative construction loans carry the added risk that the builder will have
to pay the property taxes and other carrying costs of the property until an end buyer is found.
Land and land development loans have substantially similar risks to speculative construction loans.
To monitor cash flows on construction properties, we require borrowers and loan guarantors, if
any, to provide annual financial statements and, in reaching a decision on whether to make a
construction or land development loan, we consider and review a global cash flow analysis of the
borrower and consider the borrower's expertise, credit history and profitability. We also
generally disburse funds on a percentage-of-completion basis following an inspection by a third
party inspector.
Consumer Loans.
Consumer loans may entail greater risk than do residential mortgage loans,
particularly in the case of consumer loans that are secured by assets that depreciate rapidly, such
as motor vehicles. In such cases, repossessed collateral for a defaulted consumer loan may not
provide an adequate source of repayment for the outstanding loan and a small remaining deficiency
often does not warrant further substantial collection efforts against the borrower. In the case of
home equity loans, real estate values may be reduced to a level that is insufficient to cover the
outstanding loan balance after accounting for the first mortgage loan balance. Consumer loan
collections depend on the borrower's continuing financial stability, and therefore are likely to be
adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy.
Furthermore, the application of various federal and state laws, including federal and state
bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.
Commercial Business Loans.
Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment income or other
income, and which are secured by real property whose value tends to be more easily ascertainable,
commercial business loans are of higher risk and typically are made on the basis of the borrower's
ability to make repayment from the cash flow of the borrower's business. As a result, the
availability of funds for the repayment of commercial business loans may depend substantially on
the success of the business itself. Further, any collateral securing such loans may depreciate
over time, may be difficult to appraise and may fluctuate in value.
Loan Approval Procedures and Authority.
Our lending activities follow written,
non-discriminatory underwriting standards and loan origination procedures established by our board
of directors and management. Certain of our employees have been granted individual lending limits,
which vary depending on the individual, the type of loan and whether the loan is secured or
unsecured. Generally, all loan requests exceeding the individual officer lending limits are
approved as follows: (i) the approval of any two members of our Loan Committee is required for
residential loans up to $250,000; (ii) the approval of any three members of our Loan Committee (one
of whom must be the President and Chief Executive Officer or Chief Credit Officer) is required for
any single transaction of between $250,000 and $1.0 million and aggregate debt to one borrower
transactions of between $250,000 and $1.0 million; and (iii) the approval of any four members of
our board of directors is required for all single transactions exceeding $1.0 million and all loans
to customers having aggregate outstanding debt to us exceeding $1.0 million. Our Loan Committee
consists of our President and Chief Executive Officer, Chief Credit Officer, Vice President, Chief
Operating Officer and Chief Financial Officer and certain other officers designated by the board of
directors.
Loans to One Borrower.
The maximum amount that we may lend to one borrower and the borrower's
related entities is limited, by regulation, to generally 15% of our unimpaired capital and surplus.
At June 30, 2009, our regulatory limit on loans to one borrower was $4.1 million. At that date,
our largest lending relationship was $3.9 million and was performing according to its original
terms at that date. This loan relationship is secured primarily by commercial real estate and
equipment.
Loan Commitments.
We issue commitments for residential and commercial mortgage loans
conditioned upon the occurrence of certain events. Commitments to originate mortgage loans are
legally binding agreements to lend to our customers. Generally, our loan commitments expire after
30 days. See note 18 to notes to consolidated financial statements appearing elsewhere in this
prospectus.
43
Table of Contents
Investment Activities
We have legal authority to invest in various types of liquid assets, including U.S. Treasury
obligations, securities of various government-sponsored agencies and of state and municipal
governments, mortgage-backed securities and certificates of deposit of federally insured
institutions. Within certain regulatory limits, we also may invest a portion of our assets in
other permissible securities. As a member of the Federal Home Loan Bank of Cincinnati, we also are
required to maintain an investment in Federal Home Loan Bank of Cincinnati stock.
At June 30, 2009, our investment portfolio consisted primarily of U.S. government and agency
securities, mortgage-backed securities and securities issued by government sponsored enterprises,
and municipal securities. We do not currently invest in trading account securities. At June 30,
2009, we also maintained an investment, at cost, in Federal Home Loan Bank of Cincinnati common
stock.
Our investment objectives are: (i) to provide and maintain liquidity within the guidelines of
the Office of Thrift Supervision's regulations, (ii) to manage interest rate risk; and (iii) to
provide collateral for public unit deposits. Our board of directors has the overall responsibility
for the investment portfolio, including approval of the investment policy. Messrs. Cunningham, our
President and Chief Executive Officer, and Hutsell, our Vice President, Chief Operating Officer and
Chief Financial Officer, are responsible for implementation of the investment policy and monitoring
our investment performance. In addition, we have retained a third party registered investment
advisor to serve as our investment manager and execute investment transactions, perform
pre-purchase analysis and provide portfolio analysis on a quarterly basis. Our investment manager
acts in a co-advisory capacity and does not have discretionary authority to execute trades on our
behalf without the pre-approval of our President and Chief Executive Officer and/or Vice President,
Chief Operating Officer and Chief Financial Officer. Our board of directors reviews the status of
our investment portfolio on a monthly basis, or more frequently if warranted.
Deposit Activities and Other Sources of Funds
General.
Deposits, borrowings and loan repayments are the major sources of our funds for
lending and other investment purposes. Scheduled loan repayments are a relatively stable source of
funds, while deposit inflows and outflows and loan prepayments are significantly influenced by
general interest rates and money market conditions.
Deposit Accounts.
Deposits are attracted from within our primary market area through the
offering of a broad selection of deposit instruments, including non-interest-bearing demand
deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money
market accounts), regular savings accounts and certificates of deposit. Deposit account terms vary
according to the minimum balance required, the time periods the funds must remain on deposit and
the interest rate, among other factors. In determining the terms of our deposit accounts, we
consider the rates offered by our competition, our liquidity needs, profitability to us, matching
deposit and loan products and customer preferences and concerns. We generally review our deposit
mix and pricing weekly. Our deposit pricing strategy has typically been to offer competitive rates
on all types of deposit products, and to periodically offer special rates in order to attract
deposits of a specific type or term.
Borrowings.
We use advances from the Federal Home Loan Bank of Cincinnati to supplement our
investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit
for member financial institutions. As a member, we are required to own capital stock in the
Federal Home Loan Bank of Cincinnati and are authorized to apply for advances on the security of
such stock and certain of our mortgage loans and other assets (principally securities which are
obligations of, or guaranteed by, the United States), provided certain standards related to
creditworthiness have been met. Advances are made under several different programs, each having
its own interest rate and range of maturities. Depending on the program, limitations on the amount
of advances are based either on a fixed percentage of an institution's net worth, the Federal Home
Loan Bank's assessment of the institution's creditworthiness, collateral value and level of Federal
Home Loan Bank stock ownership. We also utilize securities sold under agreements to repurchase and
overnight repurchase agreements to supplement our supply of investable funds and to meet deposit
withdrawal requirements.
44
Table of Contents
Properties
We conduct our business through our main office, branch offices and other offices. The
following table sets forth certain information relating to these facilities as of June 30, 2009.
Net Book Value
Year
Owned/
at
Location
Opened
Leased
June 30, 2009
(Dollars in thousands)
Main Office:
Athens Main Office
106 Washington Avenue
Athens, Tennessee 37303
1962
Owned
$
1,268
Branch Offices:
Athens Decatur Pike Office
1103 Decatur Pike
Athens, Tennessee 37303
1980
Owned
200
Cleveland Ocoee Street Office
3855 North Ocoee Street
Cleveland, Tennessee 37312
2007
Leased (1)
—
Cleveland 25th Street Office
950 25th Street
Cleveland, Tennessee 37311
2007
Leased (2)
—
Etowah Office
523 Tennessee Avenue
Etowah, Tennessee 37331
1977
Owned
724
Madisonville Office
4785 New Highway 68
Madisonville, Tennessee 37875
2005
Owned
908
Sweetwater Office
800 Highway 68
Sweetwater, Tennessee 37874
1995
Owned
236
Other Offices:
Athens Lending Center
106 Hornsby Street
Athens, Tennessee 37303
1998
Owned
526
Southland Finance Company
516 South Congress Parkway
Athens, Tennessee 37303
1996
Leased (3)
—
Valley Title Services, LLC
d/b/a Sweetwater Valley Title
202 N. White Street
Athens, Tennessee 37303
2007
Leased (4)
—
Valley Title Services, LLC
d/b/a Title Company of Monroe County
New Highway 68
Sweetwater, Tennessee 37874
2007
Leased (3)
—
Valley Title Services, LLC
205 Decatur Pike
Athens, Tennessee 37303
2007
Owned
218
(1)
Lease expires in February 2012.
(2)
Lease expires in December 2017.
(3)
Property is leased on a month-to-month basis.
(4)
Lease expires in October 2009.
45
Table of Contents
Personnel
As of June 30, 2009, we had 97 full-time employees and eight part-time employees, none of whom
is represented by a collective bargaining unit. We believe our relationship with our employees is
good.
Legal Proceedings
Periodically, there have been various claims and lawsuits against us, such as claims to
enforce liens, condemnation proceedings on properties in which we hold security interests, claims
involving the making and servicing of real property loans and other issues incident to our
business. We are not a party to any pending legal proceedings that we believe would have a
material adverse effect on our financial condition, results of operations or cash flows.
Subsidiaries
We have two direct subsidiaries, Southland Finance, Inc. and TiServ, Inc., both of which are
organized as Tennessee corporations, and one indirect subsidiary, Valley Title Services, LLC, which
is organized as a Tennessee limited liability company. Southland Finance, Inc. is a consumer
finance loan company. TiServ, Inc. holds stock in a credit reinsurance company and is the holding
company for Valley Title Services, LLC, a title insurance agency which also conducts business under
the names Sweetwater Valley Title and Title Company of Monroe County.
In addition to the above subsidiaries, we also offer investment and retirement products,
including mutual funds, variable annuities, individual retirement accounts, fixed annuities and
life insurance policies, to individual consumers in our primary market area through a third party
affiliation with a registered broker-dealer.
46
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The objective of this section is to help potential investors understand our views on our
results of operations and financial condition. You should read this discussion in conjunction with
the consolidated financial statements and the notes to consolidated financial statements that
appear at the end of this prospectus.
Operating Strategy
Our primary objective is to operate and grow a profitable community-oriented financial
institution serving customers in our primary market areas. We have sought to achieve this through
the adoption of a business strategy designed to maintain a strong capital position and high asset
quality. Most of our senior management team has been in place for the past ten years. We have
implemented a plan to diversify our product offerings by expanding our commercial deposit and
lending products, expanding our branch network into nearby communities, and emphasizing high asset
quality standards. Our operating strategy includes the following:
•
remaining a community-oriented financial institution;
•
continuing our historical focus on residential mortgage lending;
•
expanding our commercial real estate and multi-family lending activities;
•
emphasizing lower cost core deposits to maintain low funding costs; and
•
expanding our market share within our primary market area.
Remaining a community-oriented financial institution.
We have operated as a community-oriented financial institution since we were established in
1934 and have been operating continuously since that time. We are committed to meeting the
financial needs of the communities in which we operate, and we are dedicated to providing quality
personal service to our customers. We provide a broad range of consumer and business financial
services through our network of branches and will continually seek out ways to improve convenience,
safety and service through our product offerings.
Continuing our historical focus on residential mortgage lending.
Our primary lending focus has been, and will continue to be, on operating as a residential
mortgage lender. We originate adjustable rate mortgage loans that are retained in our loan
portfolio. We also originate fixed-rate mortgage loans, most of which are sold into the secondary
market with servicing retained in order to better serve our customer base. At June 30, 2009, our
residential mortgage loan portfolio had grown to approximately $77.2 million as compared to $59.8
million at December 31, 2004. As of June 30, 2009, we serviced an additional $78.2 million in
loans that we originated and sold into the secondary market as compared to $59.3 million at
December 31, 2004. Due to the lower interest rate environment over the past year, a greater number
of loans have been originated for sale into the secondary market.
Expanding our commercial real estate and multi-family lending activities.
In recent years we have expanded our commercial real estate and multi-family lending
activities. Management has hired experienced commercial lending officers and credit management
personnel over the past several years in order to safely increase this type of lending. We have
grown our loan portfolio secured by commercial real estate and multi-family real estate to $36.2
million and $14.6 million, respectively, as of June 30, 2009 from $20.5 million and $946,000,
respectively, at December 31, 2004.
47
Table of Contents
Emphasizing lower cost core deposits to maintain low funding costs.
We seek to increase net interest income by controlling costs of funding rather than maximizing
asset yields because originating loans with high yields often involves greater credit risk. As a
traditional thrift institution, a greater percentage of our deposit accounts have been higher
balance, higher costing certificates of deposits. Over the past several years, we have sought to
reduce our dependence on traditional high cost deposits in favor of stable low cost demand
deposits. We have utilized additional product offerings, technology and a focus on customer
service in working toward this goal.
Expanding our market share within our primary market area.
We intend to expand our market share in our primary market area by evaluating additional
branch expansion opportunities and pursuing opportunities to acquire other financial institutions
in our primary market area and surrounding areas, although we currently have no definitive plans or
commitments regarding potential acquisition opportunities.
Overview
Income.
Our primary source of pre-tax income is net interest income. Net interest income is
the difference between interest income, which is the income that we earn on our loans and
investments, and interest expense, which is the interest that we pay on our deposits and
borrowings. Other significant sources of pre-tax income are service charges (mostly from service
charges on deposit accounts and loan servicing fees), fees from the sale of mortgage loans
originated for sale in the secondary market, and commissions on sales of securities and investment
products. We also recognize income from the sale of securities.
Allowance for Loan Losses.
The allowance for loan losses is a valuation allowance for
probable losses inherent in the loan portfolio. We evaluate the need to establish allowances
against losses on loans on a monthly basis. When additional allowances are necessary, a provision
for loan losses is charged to earnings.
Expenses.
The noninterest expense we incur in operating our business consists of salaries and
employee benefits expenses, occupancy expenses, federal deposit insurance premiums and assessments,
data processing expenses and other miscellaneous expenses. Following the offering, our noninterest
expenses are likely to increase as a result of expenses of shareholder communications and meetings,
stock exchange listing fees, and expenses related to additional accounting services.
Salaries and employee benefits expenses consist primarily of: salaries, wages and bonuses
paid to our employees; payroll taxes; and expenses for health insurance, retirement plans and other
employee benefits. Following the offering, we will recognize additional annual employee
compensation expenses stemming from the adoption of new equity benefit plans. We cannot determine
the actual amount of these new stock-related compensation and benefit expenses at this time because
applicable accounting practices require that they be based on the fair market value of the shares
of common stock at specific points in the future. For an illustration of these expenses, see
"Pro
Forma Data."
Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist
primarily of depreciation charges, rental expenses, furniture and equipment expenses, maintenance,
real estate taxes and costs of utilities. Depreciation of premises and equipment is computed using
a combination of accelerated and straight-line methods based on the useful lives of the related
assets, which range from three to forty years.
Data processing expenses are the fees we pay to third parties for processing customer
information, deposits and loans.
Federal deposit insurance premiums and assessments are payments we make to the Federal Deposit
Insurance Corporation for insurance of our deposit accounts.
Our contribution to the charitable foundation will be an additional operating expense that
will reduce net income during the quarter in which the contribution to the foundation is made. Any
loss resulting from the
48
Table of Contents
contribution to the foundation will not be a recurring loss. See
"Pro Forma Data"
for a detailed
analysis of the cost of the contribution to the foundation.
Other expenses include expenses for professional services, advertising, office supplies,
postage, telephone, insurance and other miscellaneous operating expenses.
Critical Accounting Policies
We consider accounting policies involving significant judgments and assumptions by management
that have, or could have, a material impact on the carrying value of certain assets or on income to
be critical accounting policies. We consider the allowance for loan losses to be our only critical
accounting policy.
Allowance for Loan Losses.
The allowance for loan losses is the amount estimated by
management as necessary to cover losses inherent in the loan portfolio at the balance sheet date.
The allowance is established through the provision for loan losses, which is charged to income.
Determining the amount of the allowance for loan losses necessarily involves a high degree of
judgment. Among the material estimates required to establish the allowance are: loss exposure at
default; the amount and timing of future cash flows on impacted loans; value of collateral; and
determination of loss factors to be applied to the various elements of the portfolio. All of these
estimates are susceptible to significant change. Management reviews the level of the allowance
monthly and establishes the provision for loan losses based upon an evaluation of the portfolio,
past loss experience, current economic conditions and other factors related to the collectability
of the loan portfolio. Although we believe that we use the best information available to establish
the allowance for loan losses, future adjustments to the allowance may be necessary if economic or
other conditions differ substantially from the assumptions used in making the evaluation. In
addition, the Office of Thrift Supervision, as an integral part of its examination process,
periodically reviews our allowance for loan losses and may require us to recognize adjustments to
the allowance based on its judgments about information available to it at the time of its
examination. A large loss could deplete the allowance and require increased provisions to
replenish the allowance, which would adversely affect earnings. See note 4 of the notes to the
consolidated financial statements included in this prospectus.
Balance Sheet Analysis
Assets.
At June 30, 2009, our total assets were $243.0 million, a decrease of $8.0 million
from December 31, 2008 and an increase of $12.5 million from December 31, 2007. The decrease
during the six months ended June 30, 2009 was primarily the result of a planned reduction of $4.3
million in our loan portfolio in order to increase our Tier 1 capital ratio to above 10% in light
of deteriorating economic conditions, a decrease in higher costing certificates of deposit of $13.3
million and the repayment of $5.9 million in Federal Home Loan Bank advances that had been utilized
to fund the loan portfolio.
Loans.
Our primary lending activity is the origination of loans secured by real estate. We
originate primarily residential mortgage loans and, to a lesser extent, non-residential real estate
loans, construction loans, land and land development loans, multi-family real estate loans,
consumer loans and commercial business loans.
Residential mortgage loans and residential construction loans totaled $77.2 million, or 39.5%,
and $8.0 million, or 4.1% of the total loan portfolio, at June 30, 2009, respectively. At December
31, 2008, these loans totaled $75.3 million, or 37.6%, and $13.1 million, or 6.5% of the total loan
portfolio, respectively. The decrease in residential construction loans was primarily a result of
the completion of construction projects. Lower market interest rates also increased refinancing of
adjustable rate loans in our portfolio to fixed rate loans that were sold into the secondary
market.
Commercial real estate loans, including non-residential, multi-family, land and construction
loans on these types of properties, comprised $72.2 million, or 36.9% of the total loan portfolio,
at June 30, 2009. At December 31, 2008, these loans totaled $69.7 million, or 34.8% of the total
loan portfolio. The increase was primarily due to an increase in land loans. During the six
months ended June 30, 2009, non-residential and multi-family real estate loans increased $3.9
million and $3.5 million, respectively, primarily a result of the completion and conversion of
construction loans in these categories and the origination of new multi-family real estate loans.
49
Table of Contents
Commercial business loans and consumer loans decreased to $12.2 million, or 6.2% of the total
loan portfolio, and $25.8 million, or 13.2% of the total loan portfolio, respectively, at June 30,
2009 as compared to $14.6 million, or 7.3% of the total loan portfolio, and $27.5 million, or 13.8%
of the total loan portfolio, respectively, at December 31, 2008. The decrease in commercial
business loans was primarily due to payoffs totaling $2.0 million received during the six months
ended June 30, 2009 on two loans whose borrowers changed ownership. The decrease in consumer loans
was primarily due to a $980,000 decrease in unsecured loans, a $344,000 decrease in loans secured
by automobiles and a $447,000 decrease in consumer finance loans made by our subsidiary, Southland
Finance, Inc. The primary reasons for these decreases were loan repayments and customers'
reluctance to take on additional or new consumer debt.
50
Table of Contents
The following table sets forth the composition of our loan portfolio at the dates indicated.
At June 30,
At December 31,
2009
2008
2007
2006
2005
2004
(Dollars in thousands)
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Real estate mortgage:
Residential one- to four-family
$
77,194
39.50
%
$
75,297
37.62
%
$
71,629
39.38
%
$
65,586
40.89
%
$
63,663
45.04
%
$
59,841
48.88
%
Non-residential
36,196
18.52
32,295
16.14
33,710
18.53
30,699
19.14
28,760
20.35
20,477
16.73
Multi-family
14,606
7.47
11,255
5.62
6,841
3.76
3,925
2.45
2,905
2.05
946
0.77
Residential construction
8,038
4.11
13,059
6.52
10,296
5.66
8,262
5.15
6,290
4.45
2,469
2.02
Multi-family construction
74
0.04
3,865
1.93
1,252
0.69
—
—
571
0.40
—
—
Non-residential construction
4,300
2.20
11,390
5.69
8,011
4.40
6,077
3.79
2,270
1.61
1,985
1.62
Land
17,016
8.71
10,893
5.44
12,095
6.65
8,559
5.34
7,079
5.01
6,810
5.57
Total
157,424
80.55
158,054
78.96
143,834
79.07
123,108
76.76
111,538
78.91
92,528
75.59
Commercial business
12,174
6.23
14,565
7.28
9,940
5.46
14,027
8.75
7,488
5.30
8,080
6.60
Consumer:
Home equity loans and lines
of credit
14,799
7.57
14,671
7.33
13,130
7.22
10,227
6.38
9,418
6.66
8,110
6.63
Auto loans
4,561
2.33
4,905
2.45
5,133
2.82
4,710
2.94
5,315
3.76
5,127
4.19
Loans secured by deposits
1,497
0.77
1,546
0.77
2,331
1.28
1,203
0.75
1,125
0.79
936
0.76
Consumer finance loans
2,153
1.10
2,600
1.30
3,367
1.85
3,505
2.19
3,260
2.31
3,052
2.49
Other
2,835
1.45
3,815
1.91
4,179
2.30
3,593
2.23
3,209
2.27
4,580
3.74
Total
25,845
13.22
27,537
13.76
28,140
15.47
23,238
14.49
22,327
15.79
21,805
17.81
Total loans
195,443
100.00
%
200,156
100.00
%
181,914
100.00
%
160,373
100.00
%
141,353
100.00
%
122,413
100.00
%
Less: unearned interest and fees
(285
)
(361
)
(544
)
(588
)
(534
)
(523
)
Less: net deferred loan origination
fees
(183
)
(192
)
(231
)
(198
)
(190
)
(149
)
Less: allowance for loan losses
(2,758
)
(3,083
)
(2,536
)
(2,574
)
(2,059
)
(1,895
)
Loans receivable, net
$
192,217
$
196,520
$
178,603
$
157,013
$
138,570
$
119,846
51
Table of Contents
Loan Maturity
The following table sets forth certain information at June 30, 2009 and December 31, 2008
regarding the dollar amount of loan principal repayments becoming due during the periods indicated.
The table does not include any estimate of prepayments which significantly shorten the average
life of all loans and may cause our actual repayment experience to differ from that shown below.
Demand loans having no stated schedule of repayments and no stated maturity are reported as due in
one year or less.
At June 30, 2009
Residential
Non-residential
Commercial
Total
(Dollars in thousands)
Real Estate
Real Estate (1)
Construction (2)
Land
Business
Consumer
Loans
Amounts due in:
One year or less
$
5,101
$
10,170
$
11,323
$
6,312
$
7,241
$
5,064
$
45,211
More than one year
through two years
2,380
7,268
74
485
1,887
2,787
14,881
More than two years
through three years
2,678
14,096
—
2,163
770
3,799
23,506
More than three years
through five years
11,814
9,448
—
3,208
1,852
2,942
29,264
More than five years
through ten years
7,107
2,538
—
2,476
424
2,199
14,744
More than ten years
through fifteen years
6,599
3,633
—
931
—
8,766
19,929
More than fifteen years
41,515
3,649
1,015
1,441
—
288
47,908
Total
$
77,194
$
50,802
$
12,412
$
17,016
$
12,174
$
25,845
$
195,443
At December 31, 2008
Residential
Non-residential
Commercial
Total
(Dollars in thousands)
Real Estate
Real Estate (1)
Construction (2)
Land
Business
Consumer
Loans
Amounts due in:
One year or less
$
4,868
$
4,594
$
18,249
$
5,142
$
6,615
$
5,074
$
44,542
More than one year
through two years
280
8,702
5,040
324
878
3,069
18,293
More than two years
through three years
3,944
8,230
—
342
962
3,310
16,788
More than three years
through five years
8,835
13,007
781
604
3,227
3,270
29,724
More than five years
through ten years
7,043
1,965
—
2,563
—
2,521
14,092
More than ten years
through fifteen years
7,637
4,331
—
710
2,882
9,717
25,277
More than fifteen years
42,690
2,721
4,244
1,208
1
576
51,440
Total
$
75,297
$
43,550
$
28,314
$
10,893
$
14,565
$
27,537
$
200,156
(1)
Includes multi-family real estate loans.
(2)
Includes residential real estate construction loans, non-residential real estate
construction loans and multi-family real estate construction loans.
52
Table of Contents
Fixed vs. Adjustable Rate Loans
The following table sets forth the dollar amount of all loans at June 30, 2009 that are due
after June 30, 2010, and have either fixed interest rates or adjustable interest rates. The
amounts shown below exclude unearned loan origination fees.
Floating or
(In thousands)
Fixed Rates
Adjustable Rates
Total
Residential real estate
$
16,765
$
55,328
$
72,093
Non-residential real estate
22,068
18,564
40,632
Construction
—
1,089
1,089
Land
1,873
8,831
10,704
Commercial business
3,292
1,641
4,933
Consumer
8,483
12,298
20,781
Total
$
52,481
$
97,751
$
150,232
The following table sets forth the dollar amount of all loans at December 31, 2008 that are
due after December 31, 2009, and have either fixed interest rates or adjustable interest rates.
The amounts shown below exclude unearned loan origination fees.
Floating or
(In thousands)
Fixed Rates
Adjustable Rates
Total
Residential real estate
$
15,731
$
54,698
$
70,429
Non-residential real estate
25,173
13,783
38,956
Construction
2,108
7,957
10,065
Land
1,142
4,609
5,751
Commercial business
7,008
942
7,950
Consumer
9,613
12,850
22,463
Total
$
60,775
$
94,839
$
155,614
Most of our adjustable rate loans contain floor rates. Some adjustable rate loan products
contain floor rates equal to the initial interest rate on the loan. When market interest rates
fall below the floor rate, as has occurred in recent months, loan rates do not adjust further
downward. As market interest rates rise in the future, the interest rates on these loans may rise
based on the contract rate (index plus the margin) exceeding the initial interest floor rate;
however, contract interest rates will only increase when the index plus margin exceed the imposed
floor rate.
53
Table of Contents
Loan Activity
The following table shows loans originated, purchased and sold during the periods indicated.
Six Months Ended
June 30,
Year Ended December 31,
(In thousands)
2009
2008
2008
2007
2006
Total loans at beginning of period
$
199,603
$
181,139
$
181,139
$
159,587
$
140,628
Loans originated:
Residential real estate
41,127
16,995
30,813
34,526
32,338
Non-residential real estate
8,632
3,777
10,163
7,959
13,295
Land
5,388
1,922
4,046
8,109
5,041
Construction
5,099
10,631
23,562
23,180
23,143
Commercial business
3,730
10,214
14,087
15,084
14,633
Consumer
8,590
12,313
22,650
18,807
11,318
Total loans originated
72,566
55,852
105,321
107,665
99,768
Loans purchased:
Residential real estate
—
—
—
1,993
499
Non-residential real estate
—
1,005
1,009
2,655
502
Construction
—
—
—
—
—
Commercial business
—
—
—
—
—
Consumer
—
—
—
—
—
Total loans purchased
—
1,005
1,009
4,648
1,001
Deduct:
Loan principal repayments
39,071
45,879
77,131
84,640
71,855
Loan sales
38,123
7,218
10,735
6,121
9,955
Total repayments and sales
77,194
53,097
87,866
90,761
81,810
Net loan activity
(4,628
)
3,760
18,464
21,552
18,959
Total loans at end of period
$
194,975
$
184,899
$
199,603
$
181,139
$
159,587
Loan originations come from a number of sources. The primary sources of loan originations are
existing customers, walk-in traffic, advertising and referrals from customers. We generally sell
in the secondary market long-term fixed-rate residential mortgage loans that we originate. Our
decision to sell loans is based on prevailing market interest rate conditions, interest rate
management and liquidity needs. Occasionally, we have purchased participation interests in
commercial real estate loans to supplement our lending portfolio. We underwrite participation
interests using the same underwriting standards for loans that we originate for our portfolio. At
June 30, 2009, our participation interests totaled $10.9 million, all of which was secured by
properties outside of our primary market area but within a 75-mile radius of it.
Securities
At June 30, 2009 our securities portfolio consisted of securities of U.S. government agencies
and corporations, securities of various government-sponsored agencies and of state and municipal
governments and mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae. At
June 30, 2009, we also held an investment in the common stock of the Federal Home Loan Bank of
Cincinnati. A portion of this investment is required in order to collateralize borrowings from the
Federal Home Loan Bank of Cincinnati and the investment is periodically increased by stock
dividends paid by the Federal Home Loan Bank. Our securities portfolio is used to invest excess
funds for increased yield, manage interest rate risk and as collateralization for public unit
deposits.
At June 30, 2009, $22.6 million of our securities portfolio was classified as available for
sale and $1,624 of our securities portfolio was classified as held to maturity. All securities
classified as held to maturity are mortgage- backed securities. In addition, at June 30, 2009, we
had $2.9 million of other investments, at cost, which consisted solely of Federal Home Loan Bank of
Cincinnati common stock.
Total securities decreased by $7.9 million, or 23.6%, for the six months ended June 30, 2009
primarily as a result of calls of U.S. Government agencies and repayments received on
mortgage-backed securities. Our securities portfolio increased by $5.7 million, or 20.5%, during
the year ended December 31, 2008 primarily due to purchases of U.S. Government agency securities
and municipal bonds totaling $16.6 million. We hold no stock in Fannie Mae
54
Table of Contents
or Freddie Mac and have not held stock in these entities throughout the periods presented. In
addition, for all periods presented, our mortgage-backed and related securities did not include any
private label issues or real estate mortgage investment conduits.
The following table sets forth the amortized costs and fair values of our investment
securities at the dates indicated.
At June 30,
At December 31,
2009
2008
2007
2006
Amortized
Fair
Amortized
Fair
Amortized
Fair
Amortized
Fair
(In thousands)
Cost
Value
Cost
Value
Cost
Value
Cost
Value
U.S. government agencies
and corporations
$
4,625
$
4,640
$
10,545
$
10,649
$
6,743
$
6,676
$
9,242
$
8,968
States and political subdivisions
5,540
5,312
5,544
5,276
3,718
3,684
2,005
1,995
Mortgage-backed
and related securities
12,307
12,671
14,332
14,589
12,532
12,621
8,654
8,501
Other investment securities
available for sale
—
—
—
—
—
—
2,009
2,001
Total securities available for sale
and held to maturity
22,472
22,623
30,421
30,514
22,993
22,981
21,910
21,465
Federal Home Loan Bank of
Cincinnati common stock
2,899
2,899
2,899
2,899
2,786
2,786
2,786
2,786
Other investment securities held at
cost
—
—
—
—
1,960
1,960
3,290
3,290
Total investments, at cost
2,899
2,899
2,899
2,899
4,746
4,746
6,076
6,076
Total
$
25,371
$
25,522
$
33,320
$
33,413
$
27,739
$
27,727
$
27,986
$
27,541
The following table sets forth the activity in our investment securities portfolio during the
periods indicated.
At or For the Six
Months Ended
At or For the Year Ended
June 30,
December 31,
(In thousands)
2009
2008
2008
2007
2006
Mortgage-backed and related securities:
Mortgage-backed and related securities,
beginning of period (1)
$
14,589
$
12,621
$
12,621
$
8,501
$
7,126
Purchases
—
4,503
4,527
5,984
3,000
Sales
—
—
—
—
—
Repayments and prepayments
(2,005
)
(1,579
)
(2,727
)
(2,035
)
(1,641
)
Increase (decrease) in net unrealized gain
87
(191
)
168
171
16
Net increase (decrease) in mortgage-backed
securities
(1,918
)
2,733
1,968
4,120
1,375
Mortgage-backed and related securities,
end of period (1)
$
12,671
$
15,354
$
14,589
$
12,621
$
8,501
Investment securities:
Investment securities, beginning of period (1)
$
15,925
$
12,320
$
12,320
$
16,254
$
25,224
Purchases
—
10,051
12,051
6,355
4,290
Sales
—
(960
)
(2,160
)
(3,600
)
(8,020
)
Maturities
(5,894
)
(3,098
)
(6,254
)
(6,850
)
(5,435
)
Increase (decrease) in net unrealized gain
(79
)
(84
)
(32
)
161
195
Net increase (decrease) in investment securities
(5,973
)
5,909
3,605
(3,934
)
(8,970
)
Investment securities, end of period (1)
$
9,952
$
18,229
$
15,925
$
12,320
$
16,254
(1)
At fair value.
55
Table of Contents
The following tables set forth the stated maturities and weighted average yields of securities
at June 30, 2009 and December 31, 2008. Weighted average yields on tax-exempt securities are
presented on a tax equivalent basis using a federal marginal tax rate of 38.3%. Certain
mortgage-backed securities have adjustable interest rates and will reprice annually within the
various maturity ranges. These repricing schedules are not reflected in the table below. Weighted
average yield calculations on investments available for sale do not give effect to changes in fair
value that are reflected as a component of equity.
At June 30, 2009:
More than
More than
One Year
One Year to
Five Years to
More than
or Less
Five Years
Ten Years
Ten Years
Total
Weighted
Weighted
Weighted
Weighted
Weighted
Carrying
Average
Carrying
Average
Carrying
Average
Carrying
Average
Carrying
Average
(Dollars in thousands)
Value
Yield
Value
Yield
Value
Yield
Value
Yield
Value
Yield
U.S. government agencies
and corporations
$
1,001
3.40
%
$
1,614
4.68
%
$
2,025
4.99
%
$
—
—
%
$
4,640
4.54
%
States and political subdivisions
1,011
6.31
743
5.53
589
5.50
2,969
5.65
5,312
5.74
Mortgage-backed and related securities
4,357
4.68
5,689
5.19
1,699
5.16
926
5.44
12,671
5.03
Federal Home Loan Bank of Cincinnati
common stock
—
—
—
—
—
—
2,899
4.50
2,899
4.50
Total
$
6,369
4.73
%
$
8,046
5.12
%
$
4,313
5.13
%
$
6,794
5.13
%
$
25,522
5.03
%
At December 31, 2008:
More than
More than
One Year
One Year to
Five Years to
More than
or Less
Five Years
Ten Years
Ten Years
Total
Weighted
Weighted
Weighted
Weighted
Weighted
Carrying
Average
Carrying
Average
Carrying
Average
Carrying
Average
Carrying
Average
(Dollars in thousands)
Value
Yield
Value
Yield
Value
Yield
Value
Yield
Value
Yield
U.S. government agencies and
corporations
$
5,037
3.61
%
$
1,759
4.69
%
$
3,853
5.00
%
$
—
—
%
$
10,649
4.29
%
States and political subdivisions
1,011
6.30
730
5.53
573
5.50
2,962
5.64
5,276
5.74
Mortgage-backed and related securities
2,674
4.39
5,465
4.99
2,968
5.49
3,482
5.59
14,589
5.12
Federal Home Loan Bank of Cincinnati
common stock
—
—
—
—
—
—
2,899
5.00
2,899
5.00
Total
$
8,722
4.16
%
$
7,954
4.97
%
$
7,394
5.24
%
$
9,343
5.42
%
$
33,413
4.95
%
56
Table of Contents
Deposits.
We accept deposits primarily from individuals and businesses who are located in our
primary market area or who have a pre-existing lending relationship with us. We rely on
competitive pricing, customer service, account features and the location of our branch offices to
attract and retain deposits. Deposits serve as the primary source of funds for our lending and
investment activities. Deposit accounts offered include individual and business checking accounts,
money market accounts, individual NOW accounts, savings accounts and certificates of deposit.
Non-interest bearing accounts consist of free checking and commercial checking accounts.
During the year ended December 31, 2007, balances in non-interest bearing accounts decreased
by approximately $3.4 million due to a large public deposit being moved to a money market account.
In subsequent periods, balance levels in these types of accounts have remained stable while the
numbers of accounts have grown. Free checking accounts typically have lower average balances, but
have contributed to increases in non-interest income through overdraft fees.
Demand deposit and NOW accounts increased at a rate of 8.46% and 11.08% for the years ended
December 31, 2008 and 2007, respectively, and increased 4.59% during the six months ended June 30,
2009. The increases in demand deposit and NOW accounts is primarily due to the expansion of our
branch network in Monroe County and Bradley County, where we currently operate two full service
branch offices and six off-site automated teller machines. We have also established a senior
travel club and made other promotional and discount offerings available to customers in connection
with these products.
Certificate of deposits decreased by $13.3 million during the six months ended June 30, 2009.
A portion of these funds were moved to other types of interest bearing deposits with us including
money market accounts. Lower levels of market interest rates, as well as competitor pricing
significantly above prevailing market rates, has contributed to the decline in certificates of
deposit. Our need for loan funding, ability to invest these funds for a positive return and
consideration of other customer relationships influences our willingness to match above market
rates to retain these accounts.
The following table sets forth the balances of our deposit accounts at the dates indicated.
At June 30,
At December 31,
(In thousands)
2009
2008
2007
2006
Non-interest-bearing accounts
$
7,963
$
7,289
$
7,807
$
11,169
Demand and NOW accounts
40,171
38,408
35,413
31,881
Money market accounts
28,576
22,130
16,402
12,544
Passbook savings accounts
11,313
10,505
11,372
11,985
Certificates of deposit
114,897
128,161
126,350
103,635
Total
$
202,920
$
206,493
$
197,344
$
171,214
The following table indicates the amount of jumbo certificates of deposit by time remaining
until maturity as of June 30, 2009 and December 31, 2008, none of which are brokered deposits.
Jumbo certificates of deposit require minimum deposits of $100,000.
Maturity Period
Amount
(In thousands)
At June 30, 2009:
Three months or less
$
9,085
Over three through six months
6,587
Over six through twelve months
13,909
Over twelve months
17,644
Total
$
47,225
At December 31, 2008:
Three months or less
$
11,321
Over three through six months
8,576
Over six through twelve months
14,677
Over twelve months
21,870
Total
$
56,444
57
Table of Contents
The following table sets forth time deposits classified by rates at the dates indicated.
At June 30,
At December 31,
(In thousands)
2009
2008
2007
2006
0.00 - 1.00%
$
1,208
$
548
$
203
$
430
1.01 - 2.00%
19,133
9,109
1,875
2,855
2.01 - 3.00%
16,697
13,122
1,763
4,049
3.01 - 4.00%
22,271
37,146
19,015
24,425
4.01 - 5.00%
33,420
41,344
45,705
42,736
5.01 - 6.00%
21,985
26,762
57,403
28,749
6.01 - 7.00%
—
55
—
—
7.01 - 8.00%
183
75
386
391
Total
$
114,897
$
128,161
$
126,350
$
103,635
The following table sets forth the amount and maturities of time deposits at June 30, 2009.
Amount Due
More Than
More Than
Percent of Total
Less Than
One Year to
Two Years to
More Than
Time Deposit
(Dollars in thousands)
One Year
Two Years
Three Years
Three Years
Total
Accounts
0.00 - 1.00%
$
1,208
$
—
$
—
$
—
$
1,208
1.05
%
1.01 - 2.00%
16,437
2,548
116
32
19,133
16.65
2.01 - 3.00%
12,350
2,011
1,229
1,107
16,697
14.53
3.01 - 4.00%
14,570
3,038
812
3,851
22,271
19.39
4.01 - 5.00%
18,374
7,195
4,089
3,762
33,420
29.09
5.01 - 6.00%
7,371
4,223
8,080
2,311
21,985
19.13
6.01 - 7.00%
—
—
—
—
—
—
7.01 - 8.00%
108
75
—
—
183
0.16
Total
$
70,418
$
19,090
$
14,326
$
11,063
$
114,897
100.00
%
The following table sets forth the amount and maturities of time deposits at December 31,
2008.
Amount Due
More Than
More Than
Percent of Total
Less Than
One Year to
Two Years to
More Than
Time Deposit
(Dollars in thousands)
One Year
Two Years
Three Years
Three Years
Total
Accounts
0.00 - 1.00%
$
491
$
57
$
—
$
—
$
548
0.43
%
1.01 - 2.00%
8,300
809
—
—
9,109
7.11
2.01 - 3.00%
10,056
1,516
854
696
13,122
10.24
3.01 - 4.00%
27,457
3,866
2,020
3,803
37,146
28.98
4.01 - 5.00%
21,470
10,420
5,013
4,441
41,344
32.26
5.01 - 6.00%
8,088
6,006
5,836
6,832
26,762
20.88
6.01 - 7.00%
—
—
—
55
55
0.04
7.01 - 8.00%
—
—
75
—
75
0.06
Total
$
75,862
$
22,674
$
13,798
$
15,827
$
128,161
100.00
%
The following table sets forth deposit activity for the periods indicated.
Six Months Ended
June 30,
Year Ended December 31,
(In thousands)
2009
2008
2008
2007
2006
Beginning balance
$
206,493
$
197,344
$
197,344
$
171,214
$
153,190
Increase (decrease) before interest credited
(5,358
)
4,562
4,161
20,424
14,327
Interest credited
1,785
3,007
4,988
5,706
3,697
Net increase (decrease) in deposits
(3,573
)
7,569
9,149
26,130
18,024
Ending balance
$
202,920
$
204,913
$
206,493
$
197,344
$
171,214
58
Table of Contents
Borrowings.
We use borrowings from the Federal Home Loan Bank of Cincinnati to supplement our
supply of funds for loans and investments and for interest rate risk management.
Six Months Ended
June 30,
Year Ended December 31,
(In thousands)
2009
2008
2008
2007
2006
Maximum balance outstanding at any month-end
during period:
Federal Home Loan Bank advances
$
14,422
$
11,282
$
16,310
$
15,622
$
18,637
Securities sold under agreements to repurchase
1,292
2,098
2,098
1,927
2,336
Average balance outstanding during period:
Federal Home Loan bank advances
$
11,573
$
7,226
$
9,690
$
11,035
$
12,956
Securities sold under agreements to repurchase
1,155
1,660
1,400
1,692
1,667
Weighted average interest rate during period:
Federal Home Loan bank advances
3.68
%
3.95
%
3.78
%
4.13
%
4.16
%
Securities sold under agreements to repurchase
0.69
%
1.81
%
1.62
%
2.14
%
2.08
%
Balance outstanding at end of period:
Federal Home Loan bank advances
$
10,378
$
11,282
$
16,310
$
5,532
$
15,630
Securities sold under agreements to repurchase
972
1,398
912
1,151
1,681
Weighted average interest rate at end of period:
Federal Home Loan bank advances
4.06
%
3.74
%
3.25
%
4.42
%
4.23
%
Securities sold under agreements to repurchase
0.73
%
1.55
0.99
2.15
2.15
Results of Operations for the Six Months Ended June 30, 2009 and 2008
Overview.
Net income increased $621,000, or 134.1%, for the six months ended June 30, 2009 as
compared to the six months ended June 30, 2008. Factors that contributed to the increase in net
income were an increase in net interest income of $347,000, a decrease in provision for loan losses
of $169,000, an increase in noninterest income of $304,000, a decrease in noninterest expense of
$53,000, partially offset by an increase in income tax expense of $253,000.
Net Interest Income.
Net interest income increased by $347,000, or 8.3%, to $4.5 million for
the six months ended June 30, 2009 as compared to the six months ended June 30, 2008. Total
interest income decreased by $325,000, or 4.1%, to $7.5 million for the six months ended June 30,
2009 as compared to the six months ended June 30, 2008, primarily as a result of a decrease in
market interest rates. Interest income on loans decreased $147,000, or 2.1%, to $6.8 million
during the six months ended June 30, 2009 due to a decrease in market interest rates, while average
outstanding loans increased $15.0 million, or 8.4%, to $194.0 million during the period due to
continued loan portfolio development in our Bradley County branches and an increased demand for
loans in the lower interest rate environment. The average yield on the loan portfolio decreased by
0.75% during the six months ended June 30, 2009 primarily as a result of a decrease in market
interest rates. The average balance of investments decreased $2.6 million, or 8.3%, to $28.9
million for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008,
primarily as a result of $5.7 million in investment securities being called during the 2009 period.
In addition, the average balance and yield earned on overnight investments decreased for the six
months ended June 30, 2009 due to lower levels of excess funding and a decrease in market interest
rates.
Total interest expense decreased $672,000, or 18.3%, to $3.0 million for the six months ended
June 30, 2009 due to a 76 basis point decrease in average interest-bearing deposit costs, partially
offset by a $1.8 million increase in average interest-bearing deposit balances. Our average
outstanding balance of borrowings increased $3.8 million to $12.7 million for the six months ended
June 30, 2009 and our weighted average cost of borrowings decreased by 14 basis points during the
period.
Provision for Loan Losses.
The provision for loan losses was $118,000 for the six months
ended June 30, 2009 compared to $287,000 for the six months ended June 30, 2008. The decrease in
the provision was due to a $1.6 million reduction in adversely classified assets during the 2009
period. During the six months ended June 30, 2009, a $2.7 million loan for the acquisition and
development of a residential subdivision was acquired by foreclosure and sold to another party.
59
Table of Contents
Average Balances and Yields
The following tables present information regarding average balances of assets and liabilities,
the total dollar amounts of interest income and dividends from average interest-earning assets, the
total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting
annualized average yields and costs. The yields and costs for the periods indicated are derived by
dividing income or expense by the average balances of assets or liabilities, respectively, for the
periods presented. Average balances have been calculated using daily balances. Nonaccrual loans
are included in average balances only. Loan fees are included in interest income on loans and are
not material. Tax exempt income on loans and on investment and mortgage-backed securities has been
calculated on a tax equivalent basis using a federal marginal tax rate of 38.3%.
At June 30,
Six Months Ended June 30,
2009
2009
2008
Interest
Interest
Yield/
Average
and
Yield/
Average
and
Yield/
(Dollars in thousands)
Cost
Balance
Dividends
Cost
Balance
Dividends
Cost
Assets:
Interest-bearing deposits at other financial institutions
1.80
%
$
5,522
$
35
1.26
%
$
7,237
$
88
2.44
%
Loans
6.85
194,049
6,799
7.01
179,010
6,946
7.76
Investment securities
5.18
16,045
355
4.42
16,611
555
6.68
Mortgage-backed and related securities
5.03
12,883
320
4.97
14,872
182
2.45
Other interest-earning assets
0.25
1,679
2
0.25
5,211
65
2.48
Total interest-earning assets
6.45
230,178
7,511
6.53
222,941
7,836
7.03
Non-interest-earning assets
19,440
19,091
Total assets
$
249,618
242,032
Liabilities and equity:
Demand and NOW accounts
0.67
$
41,273
173
0.84
$
40,392
274
1.36
Money market accounts
1.74
25,368
239
1.89
19,623
281
2.87
Passbook savings accounts
0.40
11,306
26
0.46
11,673
43
0.74
Certificates of deposit
3.75
122,396
2,348
3.84
126,820
2,919
4.60
Total interest-bearing deposits
2.63
200,343
2,786
2.78
198,508
3,517
3.54
Federal Home Loan Bank advances
4.06
11,573
213
3.68
7,226
143
3.95
Securities sold under agreements
to repurchase
0.73
1,155
4
0.69
1,660
15
1.81
Total interest-bearing liabilities
2.69
213,071
3,003
2.82
207,394
3,675
3.54
Non-interest-bearing deposits
8,142
7,813
Other non-interest-bearing liabilities
3,437
3,339
Total liabilities
224,650
218,546
Total equity
24,968
23,486
Total liabilities and equity
$
249,618
$
242,032
Net interest income
$
4,508
$
4,161
Interest rate spread
3.71
3.49
Net interest margin
3.92
3.73
Average interest-earning assets to average interest-bearing
liabilities
108.03
%
107.50
%
60
Table of Contents
Year Ended December 31,
2008
2007
2006
Interest
Interest
Interest
Average
and
Yield/
Average
and
Yield/
Average
and
Yield/
(Dollars in thousands)
Balance
Dividends
Cost
Balance
Dividends
Cost
Balance
Dividends
Cost
Assets:
Interest-bearing deposits at other
financial institutions
$
5,125
$
133
2.60
%
$
7,341
$
357
4.87
%
$
5,118
$
161
3.15
%
Loans
185,292
13,824
7.46
164,065
13,421
8.18
147,582
11,314
7.67
Investment securities
18,667
832
4.46
20,369
976
4.79
25,050
1,042
4.16
Mortgage-backed and related securities
14,382
725
5.04
9,810
473
4.82
6,436
258
4.00
Other interest-earning assets
2,662
66
2.47
4,493
230
5.12
—
—
—
Total interest-earning assets
226,128
15,580
6.89
206,078
15,457
7.50
184,186
12,775
6.94
Non-interest-earning assets
19,377
18,720
15,399
Total assets
245,505
224,798
199,585
Liabilities and equity:
Demand and NOW accounts
40,821
517
1.27
35,450
527
1.49
29,603
341
1.15
Money market accounts
20,726
541
2.61
14,304
462
3.23
12,831
337
2.62
Passbook savings accounts
11,350
82
0.72
11,851
95
0.80
12,908
72
0.56
Certificates of deposit
126,950
5,604
4.41
117,072
5,525
4.72
97,496
3,953
4.05
Total interest-bearing deposits
199,847
6,744
3.37
178,677
6,609
3.70
152,838
4,703
3.08
Federal Home Loan Bank advances
9,690
366
3.78
11,035
456
4.13
12,956
539
4.16
Securities sold under agreements
to repurchase
1,400
23
1.62
1,692
36
2.14
1,667
35
2.08
Total interest-bearing liabilities
210,937
7,133
3.38
191,404
7,101
3.71
167,461
5,277
3.15
Non-interest-bearing deposits
7,710
8,112
7,911
Other non-interest-bearing liabilities
3,347
2,973
2,514
Total liabilities
221,994
202,489
177,886
Total equity
23,511
22,309
21,699
Total liabilities and equity
$
245,505
$
224,798
$
199,585
Net interest income
$
8,447
$
8,356
$
7,498
Interest rate spread
3.51
3.79
3.79
Net interest margin
3.74
4.05
4.07
Average interest-earning assets to average
interest-bearing liabilities
107.20
%
107.67
%
109.99
%
61
Table of Contents
Rate/Volume Analysis.
The following table sets forth the effects of changing rates and
volumes on our net interest income. The rate column shows the effects attributable to changes in
rate (changes in rate multiplied by prior volume). The volume column shows the effects
attributable to changes in volume (changes in volume multiplied by prior rate). The net column
represents the sum of the prior columns. Changes attributable to changes in both rate and volume
have been allocated proportionally based on the absolute dollar amounts of change in each.
Six Months Ended June 30, 2009
Year Ended December 31, 2008
Year Ended December 31, 2007
Compared to
Compared to
Compared to
Six Months Ended June 30, 2008
Year Ended December 31, 2007
Year Ended December 31, 2006
Increase (Decrease)
Increase (Decrease)
Increase (Decrease)
Due to
Due to
Due to
(In thousands)
Volume
Rate
Net
Volume
Rate
Net
Volume
Rate
Net
Interest income:
Interest-bearing deposits at
other financial institutions
$
(42
)
$
(11
)
$
(53
)
$
(108
)
$
(116
)
$
(224
)
$
70
$
126
$
196
Loans receivable
1,167
(1,314
)
(147
)
1,736
(1,333
)
403
1,264
843
2,107
Investment securities
(38
)
(162
)
(200
)
(77
)
(68
)
(145
)
(195
)
129
(66
)
Mortgage-backed and related securities
(487
)
625
138
220
32
252
135
80
215
Other interest-earning assets
(88
)
25
(63
)
(93
)
(70
)
(163
)
—
230
230
Total interest-earning assets
512
(837
)
(325
)
1,678
(1,555
)
123
1,274
1,408
2,682
Interest expense:
Deposits
(30
)
(702
)
(732
)
750
(615
)
135
892
1,013
1,905
Federal Home Loan Bank advances
172
(102
)
70
(56
)
(34
)
(90
)
(80
)
(3
)
(83
)
Securities sold under agreement to
repurchase
(9
)
(1
)
(10
)
(6
)
(7
)
(13
)
1
1
2
Total interest-bearing liabilities
133
(805
)
(672
)
688
(656
)
32
813
1,011
1,824
Net increase (decrease) in
interest income
$
379
$
(32
)
$
347
$
990
$
(899
)
$
91
$
461
$
397
$
858
Noninterest Income.
Noninterest income increased $304,000 to $2.5 million during the six
months ended June 30, 2009 from $2.2 million for the six months ended June 30, 2008. Factors that
contributed to the increase in noninterest income during the 2009 period were a $31,000 increase in
fees on deposit accounts and a $24,000 increase in fees related to debit cards. Decreases in other
charges and fees were primarily the result of a reduction in origination fees related to non-real
estate secured loans, which also experienced a decrease in volume between the two periods.
Investment sales commissions decreased during the six months ended June 30, 2009 due to a decline
in the value of investments. Other noninterest income increased during the 2009 period primarily
due to an increase of $349,000 in fees related to the origination and sale of fixed-rate mortgage
loans into the secondary market. These amounts were unusually high due to low interest rate levels
and an increase in refinancing transactions during the six months ended June 30, 2009. We do not
anticipate that this significant increase in other noninterest income will continue.
Noninterest Expense.
Noninterest expense decreased $53,000 for the six months ended June 30,
2009 as compared to the six months ended June 30, 2008. Salary and benefits expense decreased by
$226,000 primarily due to reductions in staffing levels at TiServ, Inc. and lower levels of
commissions paid to loan origination officers. Federal Deposit Insurance Corporation premiums
increased by $258,000 for the six months ended June 30, 2009 as compared to the six-month period
ended June 30, 2008 primarily as a result of higher assessment rates and a $109,000 one-time
special assessment imposed by the Federal Deposit Insurance Corporation during the 2009 period.
Data processing fees decreased by $109,000 during the six months ended June 30, 2009 as a result of
revised contract terms negotiated with our provider of core processing services during the fourth
quarter of 2008.
Income Tax Expense.
Income tax expense increased by $253,000 for the six months ended June
30, 2009 as compared to the six month period ended June 30, 2008 primarily due to an increase in
pre-tax income.
Results of Operations for the Years Ended December 31, 2008 and 2007
Overview.
Net income decreased $11,000, or 1.0%, to $1.1 million for the year ended December
31, 2008 compared to the year ended December 31, 2007. Our primary source of income during each of
the years ended
62
Table of Contents
December 31, 2008 and 2007 was net interest income, which increased from $8.3 million at December
31, 2007 to $8.4 million at December 31, 2008. Noninterest income increased by $131,000 during the
year ended December 31, 2008 while noninterest expense decreased by $181,000 during fiscal 2008.
We opened two new branch offices in Bradley County in early 2007 and additional expenses related to
starting those operations, which are not amortized, were realized during the year ended December
31, 2007. Employee performance bonuses for our officers are typically expensed in the year they
occur, but paid in the first quarter of the following year after full results of the operating year
are known. During the year ended December 31, 2008, our compensation committee, board of directors
and senior management determined that events in the general economy, and more particularly in the
housing and commercial lending markets, might require us to retain additional capital.
Accordingly, officer performance incentive bonuses accrued throughout the year in 2008 were
reversed in the fourth quarter of 2008, which decreased noninterest expense by $263,000. Cash
performance bonuses paid to officers in the first quarter of 2008 were expensed during the year
ended December 31, 2007.
Net Interest Income.
Net interest income increased by $91,000, or 1.1%, for the year ended
December 31, 2008 as compared to the year ended December 31, 2007, primarily due to increases in
loans, deposits and borrowings resulting from our new Bradley County branches and lower market
interest rates. Total interest income increased by $123,000, or 0.8%, and loan interest income
increased by $403,000, or 3.0%, during the year ended December 31, 2008, due primarily to an
increase in average loan balances of $21.2 million, or 12.9%, during fiscal 2008. Total interest
expense increased by $32,000, or 0.5%, during the year ended December 31, 2008, while average
interest bearing liabilities increased $19.5 million, or 10.2%, due primarily to an increase in
deposits of $9.1 million, or 4.6%, resulting from our new Bradley County branches and more
aggressive deposit solicitation efforts. Federal Home Loan Bank of Cincinnati advances at December
31, 2008 totaled $16.3 million as compared to $5.5 million at December 31, 2007 as we utilized
favorable rates to fund lending.
Provision for Loan Losses.
The provision for loan losses was $761,000 for the year ended
December 31, 2008 as compared to $443,000 for the year ended December 31, 2007. The increase in
the provision was attributable to increases in classified assets and increases in evaluated
qualitative risk factors, primarily related to prevailing economic conditions, used to determine
the overall risk inherent in our loan portfolio during the year ended December 31, 2008.
Noninterest Income.
During the year ended December 31, 2008, total noninterest income
increased $131,000, or 3.3%, as compared to the year ended December 31, 2007. The increase in
noninterest income was primarily the result of an increase of $242,000 in net fees related to
deposit overdraft fees, a $62,000 increase in income from debit cards, a $127,000 decrease in other
fees and charges from Valley Title Services, LLC due to decreased loan demand, and a $59,000
reduction in fees and charges relating to consumer finance loans made by Southland Finance, Inc.
due to decreased loan demand.
Noninterest Expense.
Non-interest expense decreased by $181,000, or 1.73%, for the year ended
December 31, 2008 as compared to the year ended December 31, 2007. The primary factors effecting
the change were a $181,000 reduction in salary and benefits expense, which was primarily the result
of a decrease in salary expense relating to a reduction in staffing at Valley Title Services, LLC,
and a reduction in occupancy expense and equipment due to capitalized equipment expenses relating
to the opening of our two new Bradley County branches in 2007. Federal Deposit Insurance
Corporation insurance premium costs increased $62,000 during the year ended December 31, 2008 due
to a one-time assessment credit being fully used during the fourth quarter of 2007. Data
processing costs increased $86,000 during the year ended December 31, 2008 due to increased account
growth related to our opening of our Bradley County branches. Advertising expenses decreased by
$104,000 during the year ended December 31, 2008 as we reduced previous marketing efforts
associated with the opening of our Bradley County branches in 2007.
Income Tax Expense.
Provision for income taxes increased $95,000, or 24.2%, during the year
ended December 31, 2008 primarily due to increased pre-tax income.
63
Table of Contents
Risk Management
Overview.
Managing risk is an essential part of successfully managing a financial
institution. Our most prominent risk exposures are credit risk, interest rate risk and market
risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a
loan or investment when it is due. Interest rate risk is the potential reduction of interest
income as a result of changes in interest rates. Market risk arises from fluctuations in interest
rates that may result in changes in the values of financial instruments, such as available-for-sale
securities that are accounted for on a mark-to-market basis. Other risks that we face are
operational risk, liquidity risks and reputation risk. Operational risks include risks related to
fraud, regulatory compliance, processing errors, technology and disaster recovery. Liquidity risk
is the possible inability to fund obligations to depositors, lenders or borrowers. Reputation risk
is the risk that negative publicity or press, whether true or not, could cause a decline in our
customer base or revenue.
Credit Risk Management.
Our strategy for credit risk management focuses on having
well-defined credit policies and uniform underwriting criteria and providing prompt attention to
potential problem loans.
When a borrower fails to make a required loan payment, we take a number of steps to have the
borrower cure the delinquency and restore the loan to current status. When the loan becomes 15 day
past due, a late notice is sent to the borrower. When the loan becomes 30 days past due, a more
formal letter is sent. Between 15 and 30 days past due, telephone calls are also made to the
borrower. After 30 days, we regard the borrower in default. At 60 days delinquent, the borrower
may be sent a letter from our attorney and we may commence collection proceedings. If a
foreclosure action is instituted and the loan is not brought current, paid in full, or refinanced
before the foreclosure sale, the real property securing the loan generally is sold at foreclosure.
Generally, when a consumer loan becomes 60 days past due, we institute collection proceedings and
attempt to repossess any personal property that secures the loan. Management informs the board of
directors monthly of the amount of loans delinquent more than 30 days, all loans in foreclosure and
repossessed property that we own.
Analysis of Nonperforming and Classified Assets.
We consider repossessed assets and loans
that are 90 days or more past due to be nonperforming assets. Loans are generally placed on
nonaccrual status when they become 90 days delinquent at which time the accrual of interest ceases
and the allowance for any uncollectible accrued interest is established and charged against
operations. Typically, payments received on a nonaccrual loan are first applied to the outstanding
principal balance.
Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is
classified as real estate owned until it is sold. When property is acquired it is recorded at the
lower of its cost, which is the unpaid balance of the loan plus foreclosure costs, or fair market
value at the date of foreclosure. Any holding costs and declines in fair value after acquisition
of the property result in charges against income.
64
Table of Contents
The following table provides information with respect to our nonperforming assets at the dates
indicated.
At June 30,
At December 31,
(Dollars in thousands)
2009
2008
2007
2006
2005
2004
Non-accrual loans:
Residential real estate
$
443
$
688
$
149
$
93
$
431
$
48
Non-residential real estate
296
2,882
—
—
—
—
Construction
—
270
144
—
—
—
Commercial business
12
280
—
—
—
—
Consumer
36
19
23
44
66
35
Total
787
4,139
316
137
497
83
Accruing loans past due 90 days or more:
Residential real estate
3
3
—
27
—
—
Non-residential real estate
—
—
—
—
—
—
Construction
—
—
—
—
—
—
Commercial business
—
—
—
—
116
—
Consumer
9
30
43
16
17
—
Total
12
33
43
43
133
—
Total of non-accrual and 90 days or
more past due loans
799
4,172
359
180
630
83
Real estate owned
252
230
—
—
235
109
Other non-performing assets
25
26
36
48
42
20
Total non-performing assets
1,076
4,428
395
228
907
212
Troubled debt restructurings
1,178
267
219
210
214
129
Troubled debt restructurings and
total non-performing assets
$
2,254
$
4,695
$
614
$
438
$
1,121
$
341
Total non-performing loans to total loans
0.41
%
2.08
%
0.20
%
0.11
%
0.45
%
0.07
%
Total non-performing loans to total assets
0.33
%
1.66
%
0.16
%
0.08
%
0.33
%
0.05
%
Total non-performing assets and troubled
debt restructurings to total assets
0.93
%
1.87
%
0.27
%
0.21
%
0.59
%
0.19
%
The increase in non-performing loans from December 31, 2007 to December 31, 2008 was
attributable to a $2.7 million non-residential real estate development loan, a $140,000 speculative
residential construction loan, a $228,000 commercial business loan secured by non-real estate
assets of a trucking company, and several residential real estate loans totaling $539,000 where
borrowers were unable to meet their contractual obligations due to job loss or other factors that
impeded their ability to repay such loans. During the six months ended June 30, 2009, the $2.7
million non-residential real estate development loan discussed above was foreclosed on and
refinanced with a third party borrower and the $228,000 commercial business loan discussed above
was charged off.
We periodically modify loans to extend the term or make other concessions to help borrowers
stay current on their loan and to avoid foreclosure. We do not forgive principal or interest on
loans or modify the interest rates on loans to rates that are below market rates. At June 30,
2009, we had $1.2 million of these modified loans, which are also referred to as troubled debt
restructurings, as compared to $267,000 at December 31, 2008. The increase in troubled debt
restructurings during the six months ended June 30, 2009 was the result of restructuring a $1.0
million commercial real estate loan to interest-only payments.
Interest income that would have been recorded for the six months ended June 30, 2009 and the
year ended December 31, 2008, had non accruing loans been current according to their original
terms, amounted to $78,000 and $158,000, respectively. Interest income of $11,700 and $406,000
related to non-performing loans was included in interest income for the six months ended June 30,
2009 and the year ended December 31, 2008, respectively.
Federal regulations require us to review and classify our assets on a regular basis. In
addition, the Office of Thrift Supervision has the authority to identify problem assets and, if
appropriate, require them to be classified. There are three classifications for problem assets;
substandard, doubtful and loss. "Substandard assets" must have one or more defined weakness and
are characterized by the distinct possibility that we will sustain some loss if the deficiencies
are not corrected. "Doubtful assets" have the weaknesses of substandard assets with the additional
characteristic that the weaknesses make collection or liquidation in full on the basis of currently
existing facts,
65
Table of Contents
conditions and values questionable, and there is a high possibility of loss. An asset classified
"loss" is considered uncollectible and of such little value that continuance as an asset of the
institution is not warranted. The regulations also provide for a "special mention" category,
described as assets which do not currently expose an institution to a sufficient degree of risk to
warrant classification but do possess credit deficiencies or potential weaknesses deserving close
attention. When we classify an asset as substandard or doubtful we may establish a specific
allowance for loan losses. If we classify an asset as loss, we charge off an amount equal to 100%
of the portion of the asset classified loss.
The following table shows the aggregate amounts of our classified assets at the dates
indicated.
At June 30,
At December 31,
(In thousands)
2009
2008
2007
2006
Special mention assets
$
2,695
$
2,299
$
3,171
$
2,617
Substandard assets
4,461
6,514
1,122
728
Doubtful assets
—
—
—
—
Loss assets
37
34
47
734
Total classified assets
$
7,193
$
8,847
$
4,340
$
4,079
Classified assets include loans that are classified due to factors other than payment
delinquencies, such as lack of current financial statements and other required documentation,
insufficient cash flows or other deficiencies, and, therefore are not included as non-performing
assets. Other than as disclosed in the above tables, there are no other loans where management has
serious doubts about the ability of the borrowers to comply with the present loan repayment terms.
Delinquencies.
The following table provides information about delinquencies (excluding
non-accrual loans) in our loan portfolio at the dates indicated.
At June 30,
At December 31,
2009
2008
30-89 Days
90 Days or More
30-89 Days
90 Days or More
Number
Principal
Number
Principal
Number
Principal
Number
Principal
of
Balance
of
Balance
of
Balance
of
Balance
(In thousands)
Loans
of Loans
Loans
of Loans
Loans
of Loans
Loans
of Loans
Residential real estate
6
$
247
1
$
3
10
$
537
2
$
3
Non-residential real estate
1
21
—
—
1
176
—
—
Construction
—
—
—
—
—
—
—
—
Commercial business
1
21
—
—
2
20
—
—
Consumer
38
189
7
9
69
273
8
30
Total
46
$
478
8
$
12
82
$
1,006
10
$
33
At December 31,
2007
2006
30-89 Days
90 Days or More
30-89 Days
90 Days or More
Number
Principal
Number
Principal
Number
Principal
Number
Principal
of
Balance
of
Balance
of
Balance
of
Balance
(In thousands)
Loans
of Loans
Loans
of Loans
Loans
of Loans
Loans
of Loans
Residential real estate
11
$
546
—
$
—
9
$
381
2
$
27
Non-residential real estate
1
7
—
—
1
18
—
—
Construction
—
—
—
—
—
—
—
—
Commercial business
1
14
—
—
1
9
—
—
Consumer
47
195
9
43
78
334
6
16
Total
60
$
762
9
$
43
89
$
742
8
$
43
66
Table of Contents
Analysis and Determination of the Allowance for Loan Losses
The allowance for loan losses is a valuation allowance for probable losses inherent in the
loan portfolio. We evaluate the need to establish allowances against losses on loans on a monthly
basis. When additional allowances are necessary, a provision for loan losses is charged to
earnings. Our methodology for assessing the appropriateness of the allowance for loan losses is
reviewed periodically by the board of directors. The board of directors also reviews the allowance
for loan losses established on a quarterly basis.
General Valuation Allowance.
We establish a general valuation allowance for loans that should
be adequate to reserve for the estimated credit losses inherent in each segment of our loan
portfolio, given the facts and circumstances as of the valuation date for all loans in the
portfolio that have not been classified. The allowance is based on our average annual rate of net
charge offs experienced over the previous three years on each segment of the portfolio and is
adjusted for current qualitative factors. If historical loss data is not available for a segment,
the estimates used will be no less than the industry average for that segment. For purposes of
determining the estimated credit losses, the loan portfolio is segmented as follows: (i)
residential real estate loans (one- to four-family); (ii) commercial real estate loans; (iii)
commercial loans (secured); (iv) commercial loans (unsecured and leases); and (v) consumer loans.
Qualitative factors that are considered in determining the adequacy of the allowance for loan
losses are as follows: (i) trends of delinquent and non-accrual loans; (ii) economic factors; (iii)
concentrations of credit; (iv) changes in the nature and volume of the loan portfolio; and (v)
changes in lending staff and loan policies.
Specific Valuation Allowance.
In accordance with FASB 114,
"Accounting for Creditors for
Impairment of a Loan,"
all adversely classified loans meeting the following loan balance thresholds
will be individually reviewed: (i) residential loans greater than $100,000; (ii) commercial real
estate loans and land loans greater than $50,000; (iii) consumer loans greater than $25,000; and
(iv) all other commercial loans. Any portion of the recorded investment in excess of the fair
value of the collateral that can be identified as uncollectible will be charged off against the
allowance for loan losses.
We establish a specific allowance for loan losses for 100% of the assets or portions thereof
classified as loss. The amount of the loss will be the excess of the recorded investment in the
loan over the fair value of collateral estimated on the date that a probable loss is identified.
Lending management will use updated appraisals, National Automobile Dealers Association values, or
other prudent sources for determining collateral value.
All other adversely classified loans as well as special mention and watch loans will be
reviewed in accordance with FASB 5,
"Accounting for Contingencies."
Our historical loss experience
in each category of loans will be utilized in determining the allowance for that group. The loss
history will be based on the average actual loss sustained from the sale of real estate owned. If
we have not experienced any losses in a particular category, the factor will be determined from
either the loss history of a reasonably similar category or the peer group industry average. The
determined loss factor in each loan category may be adjusted for qualitative factors as determined
by management.
Unallocated Valuation Allowance.
Our allowance for loan losses methodology also includes an
unallocated component to reflect the margin of imprecision inherent in the underlying assumptions
used in the methodologies for estimating specific and general losses in the loan portfolio.
67
Table of Contents
The following table sets forth the breakdown of the allowance for loan losses by loan category
at the dates indicated.
At June 30,
At December 31,
2009
2008
2007
% of
% of
% of
% of
Loans in
% of
Loans in
% of
Loans in
Allowance
Category
Allowance
Category
Allowance
Category
to Total
to Total
to Total
to Total
to Total
to Total
(Dollars in thousands)
Amount
Allowance
Loans
Amount
Allowance
Loans
Amount
Allowance
Loans
Residential real estate (1)
$
766
27.77
%
51.10
%
$
906
29.39
%
51.58
%
$
989
39.00
%
52.41
%
Non-residential real estate (1)
1,151
41.73
36.89
1,221
39.61
34.89
777
30.62
34.13
Commercial business
396
14.35
6.22
545
17.69
7.30
278
10.96
5.48
Consumer
341
12.37
5.79
398
12.90
6.23
413
16.30
7.98
Total
2,654
96.22
100.00
%
3,070
99.59
100.00
%
2,457
96.88
100.00
%
Unallocated
104
3.78
13
0.41
79
3.12
Total allowance for loan losses
$
2,758
100.00
%
$
3,083
100.00
%
$
2,536
100.00
%
At December 31,
2006
2005
2004
% of
% of
% of
% of
Loans in
% of
Loans in
% of
Loans in
Allowance
Category
Allowance
Category
Allowance
Category
to Total
to Total
to Total
to Total
to Total
to Total
(Dollars in thousands)
Amount
Allowance
Loans
Amount
Allowance
Loans
Amount
Allowance
Loans
Residential real estate (1)
$
220
8.53
%
52.61
%
$
235
11.41
%
56.36
%
$
190
10.04
%
57.77
%
Non-residential real estate (1)
504
19.58
30.83
410
19.91
29.53
355
18.73
24.79
Commercial business
1,060
41.19
8.78
223
10.83
5.32
265
13.87
6.63
Consumer
369
14.34
7.78
359
17.44
8.79
379
19.98
10.81
Total
2,153
83.64
100.00
%
1,227
59.59
100.00
%
1,189
62.62
100.00
%
Unallocated
421
16.36
832
40.41
706
37.38
Total allowance for loan losses
$
2,574
100.00
%
$
2,059
100.00
%
$
1,895
100.00
%
(1)
Includes construction loans.
Although we believe that we use the best information available to establish the allowance for
loan losses, future adjustments to the allowance for loan losses may be necessary and our results
of operations could be adversely affected if circumstances differ substantially from the
assumptions used in making the determinations. Furthermore, while we believe we have established
our allowance for loan losses in conformity with generally accepted accounting principles, there
can be no assurance that the Office of Thrift Supervision, in reviewing our loan portfolio, will
not require us to increase our allowance for loan losses. The Office of Thrift Supervision may
require us to increase our allowance for loan losses based on judgments different from ours. In
addition, because future events affecting borrowers and collateral cannot be predicted with
certainty, there can be no assurance that the existing allowance for loan losses is adequate or
that increases will not be necessary should the quality of any loans deteriorate as a result of the
factors discussed above. Any material increase in the allowance for loan losses may adversely
affect our financial condition and results of operation.
68
Table of Contents
Analysis of Loan Loss Experience.
The following table sets forth an analysis of the allowance
for loan losses for the periods indicated.
Six Months Ended
June 30,
Year Ended December 31,
(Dollars in thousands)
2009
2008
2008
2007
2006
2005
2004
Allowance for loan losses at beginning of period
$
3,083
$
2,536
$
2,536
$
2,574
$
2,059
$
1,895
$
1,830
Provision for loan losses
118
287
761
443
704
341
267
Charge offs:
Residential real estate
41
—
30
20
1
45
37
Non-residential real estate
87
—
—
—
—
—
—
Construction
—
31
31
—
—
—
—
Commercial business
228
—
5
244
10
—
—
Consumer
129
124
258
265
234
213
227
Total charge-offs
485
155
324
529
245
258
264
Recoveries:
Residential real estate
20
—
2
—
—
7
6
Non-residential real estate
—
—
—
—
—
—
—
Construction
—
—
—
—
—
—
—
Commercial business
—
—
—
—
—
—
—
Consumer
22
86
108
48
56
74
56
Total recoveries
42
86
110
48
56
81
62
Net charge-offs (recoveries)
443
69
214
481
189
177
202
Allowance for loan losses at end of period
$
2,758
$
2,754
$
3,083
$
2,536
$
2,574
$
2,059
$
1,895
Allowance for loan losses to non-performing
loans
345.04
%
475.24
%
73.87
%
704.52
%
1,457.43
%
326.81
%
2,285.64
%
Allowance for loan losses to total loans
outstanding at the end of the period
1.39
%
1.45
%
1.52
%
1.37
%
1.58
%
1.44
%
1.52
%
Net charge-offs (recoveries) to average
loans outstanding during the period
0.22
%
0.04
%
0.12
%
0.29
%
0.13
%
0.14
%
0.18
%
Interest Rate Risk Management.
We manage the interest rate sensitivity of our
interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse
effects of changes in the interest rate environment. Deposit accounts typically react more quickly
to changes in market interest rates than mortgage loans because of the shorter maturities of
deposits. As a result, sharp increases in interest rates may adversely affect our earnings while
decreases in interest rates may beneficially affect our earnings. To reduce the potential
volatility of our earnings, we have sought to improve the match between asset and liability
maturities and rates, while maintaining an acceptable interest rate spread. Our strategy for
managing interest rate risk emphasizes: adjusting the maturities of borrowings; adjusting the
investment portfolio mix and duration and generally selling in the secondary market substantially
all newly originated fixed rate one-to-four-family residential real estate loans. We currently do
not participate in hedging programs, interest rate swaps or other activities involving the use of
derivative financial instruments.
We have an Asset/Liability Management Committee, which includes members of management approved
by the board of directors, to communicate, coordinate and control all aspects involving
asset/liability management. The committee establishes and monitors the volume, maturities, pricing
and mix of assets and funding sources with the objective of managing assets and funding sources to
provide results that are consistent with liquidity, growth, risk limits and profitability goals.
Our goal is to manage asset and liability positions to moderate the effects of interest rate
fluctuations on net interest and net income.
69
Table of Contents
Net Portfolio Value Analysis.
We use the net portfolio value analysis prepared by the Office
of Thrift Supervision to review our level of interest rate risk. This analysis measures interest
rate risk by capturing changes in net portfolio value of our cash flows from assets, liabilities
and off-balance sheet items, based on a range of assumed changes in market interest rates. Net
portfolio value represents the market value of portfolio equity and is equal to the market value of
assets minus the market value of liabilities, with adjustments made for off-balance sheet items.
These analyses assess the risk of loss in market risk-sensitive instruments in the event of a
sudden and sustained 100 to 300 basis point increase or 100 basis point decrease in market interest
rates with no effect given to any steps that we might take to counter the effect of that interest
rate movement.
The following table, which is based on information that we provide to the Office of Thrift
Supervision, presents the change in our net portfolio value at June 30, 2009 that would occur in
the event of an immediate change in interest rates based on Office of Thrift Supervision
assumptions, with no effect given to any steps that we might take to counteract that change.
Net Portfolio Value as % of
Net Portfolio Value
Portfolio Value of Assets
Basis Point ("bp")
(Dollars in thousands)
Change
in Rates
$ Amount
$ Change
% Change
NPV Ratio
Change
300
$
33,485
$
1,189
4
%
13.30
%
63bp
200
33,313
1,017
3
%
13.16
%
50bp
100
33,048
752
2
%
13.00
%
33bp
0
32,296
—
—
12.67
%
—
(100)
31,013
(1,283
)
(4
)%
12.16
%
(51)bp
The Office of Thrift Supervision uses various assumptions in assessing interest rate risk.
These assumptions relate to interest rates, loan prepayment rates, deposit decay rates and the
market values of certain assets under differing interest rate scenarios, among others. As with any
method of measuring interest rate risk, certain shortcomings are inherent in the methods of
analysis presented in the foregoing tables. For example, although certain assets and liabilities
may have similar maturities or periods to repricing, they may react in different degrees to changes
in market interest rates. Also, the interest rates on certain types of assets and liabilities may
fluctuate in advance of changes in market interest rates, while interest rates on other types may
lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage
loans, have features that restrict changes in interest rates on a short-term basis and over the
life of the asset. Further, if there is a change in interest rates, expected rates of prepayments
on loans and early withdrawals from certificates could deviate significantly from those assumed in
calculating the table. Prepayment rates can have a significant impact on interest income. Because
of the large percentage of loans and mortgage-backed securities we hold, rising or falling interest
rates have a significant impact on the prepayment speeds of our earning assets that in turn affect
the rate sensitivity position. When interest rates rise, prepayments tend to slow. When interest
rates fall, prepayments tend to rise. Our asset sensitivity would be reduced if prepayments slow
and vice versa. While we believe these assumptions to be reasonable, there can be no assurance
that assumed prepayment rates will approximate actual future mortgage-backed security and loan
repayment activity.
Liquidity Management.
Liquidity is the ability to meet current and future financial
obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan
repayments, maturities and sales of investment securities and borrowings from the Federal Home Loan
Bank of Cincinnati. While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by
general interest rates, economic conditions and competition.
We regularly adjust our investments in liquid assets based upon our assessment of (i) expected
loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and
securities and (iv) the objectives of our asset/liability management policy.
Our most liquid assets are cash and cash equivalents and interest-bearing deposits. The level
of these assets depends on our operating, financing, lending and investing activities during any
given period. At June 30, 2009,
70
Table of Contents
cash and cash equivalents totaled $9.8 million. Securities classified as available-for-sale,
amounting to $22.6 million and interest bearing deposits in banks of $981,000 at June 30, 2009,
provide additional sources of liquidity. In addition, at June 30, 2009, we had the ability to
borrow a total of approximately $57.0 million from the Federal Home Loan Bank of Cincinnati. At
June 30, 2009 we had $10.4 million in Federal Home Loan Bank advances outstanding and $12.0 million
in letters of credit to secure public funds deposits.
At June 30, 2009 we had $6.9 million in commitments to extend credit outstanding.
Certificates of deposit due within one year of June 30, 2009 totaled $70.4 million, or 61.2% of
certificates of deposit. We believe the large percentage of certificates of deposit that mature
within one year reflects customers' hesitancy to invest their funds for long periods due to the
recent low interest rate environment and local competitive pressure. If these maturing deposits do
not remain with us, we will be required to seek other sources of funds, including other
certificates of deposit and borrowings. Depending on market conditions, we may be required to pay
higher rates on such deposits or other borrowings than we currently pay on the certificates of
deposit due on or before June 30, 2010. We believe, however, based on past experience, that a
significant portion of our certificates of deposit will remain with us. We have the ability to
attract and retain deposits by adjusting the interest rates offered.
The following tables present certain of our contractual obligations as of June 30, 2009 and
December 31, 2008.
Payments due by period
Less than
One to
Three to
More Than
Contractual Obligations
Total
One Year
Three Years
Five Years
Five Years
(In thousands)
At June 30, 2009:
Deferred director fee arrangements
$
905
$
188
$
474
$
96
$
147
Deferred compensation arrangements
710
35
70
79
526
Operating lease obligations
653
182
288
80
103
Federal Home Loan Bank advances
10,378
2,105
5,221
3,052
—
Total
$
12,646
$
2,510
$
6,053
$
3,307
$
776
At December 31, 2008:
Deferred director fee arrangements
$
927
$
195
$
470
$
96
$
166
Deferred compensation arrangements
618
33
71
77
437
Operating lease obligations
751
193
334
100
124
Federal Home Loan Bank advances
16,310
5,992
7,225
3,093
—
Total
$
18,606
$
6,413
$
8,100
$
3,366
$
727
Our primary investing activities are the origination of loans and the purchase of securities.
Our primary financing activities consist of activity in deposit accounts and Federal Home Loan Bank
advances. Deposit flows are affected by the overall level of interest rates, the interest rates
and product offered by us and our local competitors and other factors. We generally manage the
pricing of our deposits to be competitive. Occasionally, we offer promotional rates on certain
deposit products to attract deposits.
71
Table of Contents
Financing and Investing Activities
The following table presents our primary investing and financing activities during the periods
indicated.
Six Months Ended
June 30,
Year Ended December 31,
(In thousands)
2009
2008
2008
2007
2006
Investing activities:
Loan purchases
$
—
$
1,005
$
1,009
$
4,648
$
1,001
Loan originations
72,566
55,852
105,321
107,665
99,768
Loan principal repayments
39,071
45,879
77,131
84,640
71,855
Loan sales
38,123
7,218
10,735
6,121
9,955
Proceeds from calls, maturities and principal
repayments of investment securities
5,894
3,098
6,254
6,850
5,435
Proceeds from calls, maturities and principal
repayments of mortgage-backed and related
securities
2,005
1,579
2,727
2,035
1,641
Proceeds from sales of investment securities
available-for-sale
—
960
2,160
3,600
8,020
Proceeds from sales of mortgage-backed
and related securities available-for-sale
—
—
—
—
—
Purchases of investment securities
—
10,051
12,051
6,355
4,290
Purchases of mortgage-backed
and related securities
—
4,503
4,527
5,984
3,000
Financing activities:
Increase (decrease) in deposits
(3,574
)
7,538
9,150
26,388
16,776
Increase (decrease) in Federal Home Loan Bank
advances
(5,932
)
5,750
10,778
(10,098
)
2,030
Increase (decrease) in securities sold under
agreements to repurchase
60
247
(239
)
(530
)
260
Capital Management.
We are subject to various regulatory capital requirements administered by
the Office of Thrift Supervision, including a risk-based capital measure. The risk-based capital
guidelines include both a definition of capital and a framework for calculating risk-weighted
assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At
June 30, 2009, we exceeded all of our regulatory capital requirements and were considered "well
capitalized" under regulatory guidelines. See
"Regulation and Supervision—Regulation of Federal
Savings Associations—Capital Requirements," "Regulatory Capital Compliance"
and note 10 of the
notes to consolidated financial statements included in this prospectus.
This offering is expected to increase our consolidated equity by $17.3 million, to $42.7
million at the maximum of the offering range. Following completion of this offering, we also will
manage our capital for maximum shareholder benefit. The capital from the offering will
significantly increase our liquidity and capital resources. Over time, the initial level of
liquidity will be reduced as net proceeds from the stock offering are used for general corporate
purposes, including the funding of lending activities. Our financial condition and results of
operations will be enhanced by the capital from the offering, resulting in increased net
interest-earning assets and net income. However, the large increase in equity resulting from the
capital raised in the offering will, initially, have an adverse impact on our return on equity.
Following the offering, we may use capital management tools such as cash dividends and common share
repurchases. However, under Office of Thrift Supervision regulations, we will not be allowed to
repurchase any shares during the first year following the offering, except to fund the restricted
stock awards under the equity benefit plan after its approval by shareholders, unless extraordinary
circumstances exist and we receive regulatory approval.
Off-Balance Sheet Arrangements.
In the normal course of operations, we engage in a variety of
financial transactions that, in accordance with generally accepted accounting principles, are not
recorded in our financial statements. These transactions involve, to varying degrees, elements of
credit, interest rate and liquidity risk. Such transactions are used primarily to manage
customers' requests for funding and take the form of loan commitments, unused lines of credit and
letters of credit. For information about our loan commitments, unused lines of credit and letters
of credit, see note 18 of the notes to consolidated financial statements.
72
Table of Contents
For the six months ended June 30, 2009 and the year ended December 31, 2008, we did not engage
in any off-balance sheet transactions reasonably likely to have a material effect on our financial
condition, results of operations or cash flows.
Impact of Recent Accounting Pronouncements
For a discussion of the impact of recent accounting pronouncements, see note 1 of the notes to
consolidated financial statements included in this prospectus.
Effect of Inflation and Changing Prices
The consolidated financial statements and related financial data presented in this prospectus
have been prepared according to generally accepted accounting principles in the United States,
which require the measurement of financial positions and operating results in terms of historical
dollars without considering the change in the relative purchasing power of money over time due to
inflation. The primary impact of inflation on our operations is reflected in increased operating
costs. Unlike most industrial companies, virtually all the assets and liabilities of a financial
institution are monetary in nature. As a result, interest rates generally have a more significant
impact on a financial institution's performance than do general levels of inflation. Interest
rates do not necessarily move in the same direction or to the same extent as the prices of goods
and services.
73
Table of Contents
Our Management
Board of Directors
The board of directors of Athens Bancshares Corporation and Athens Federal Community Bank are
each comprised of eight persons who are elected for terms of three (3) years, approximately
one-third of whom are elected annually. At the first annual meeting of shareholders of Athens
Bancshares Corporation, each director will be up for election for either a one-year, two-year or
three-year term so as to establish the initial classification of the board of directors. The same
individuals comprise the boards of directors of Athens Bancshares Corporation and Athens Federal
Community Bank.
All of our directors are independent under the current listing standards of the Nasdaq Stock
Market, except for Jeffrey L. Cunningham, who serves as President and Chief Executive Officer of
Athens Bancshares Corporation and Athens Federal Community Bank. In determining the independence
of directors, the board of directors considered the various deposit, loan and other relationships
that each director has with Athens Federal Community Bank, including loans and lines of credit made
to Directors Howard and Thompson, in addition to the transactions disclosed under
"—Transactions
with Athens Federal Community Bank,"
but determined in each case that these relationships did not
interfere with their exercise of independent judgment in carrying out their responsibilities as a
director.
Information regarding the directors is provided below. Unless otherwise stated, each person
has held his or her current occupation for the last five years. Ages presented are as of June 30,
2009. The starting year of service as director relates to service on the board of directors of
Athens Federal Community Bank.
The following directors have terms ending in 2010:
G. Scott Hannah
is the retired owner of Hiwasee Sales, Inc., a wholesale beverage distributor.
Age 58. Director since 2003.
M. Darrell Murray
is a self-employed realtor and auctioneer. Age 63. Director since 1993.
Lyn B. Thompson
has worked as a self-employed certified public accountant since January 2007.
From January 2005 to January 2007, Ms. Thompson served as Chief Financial Officer of Smoky
Management, LLC, a cash advance company. Prior to that, Ms. Thompson was a Director at G.R. Rush &
Company, P.C., a certified public accounting firm. Age 49. Director since 2005.
The following directors have terms ending in 2011:
Dr. James L. Carter, Jr.
is a retired dentist. Age 70. Director since 1987.
Larry D. Wallace
serves as Chairman of the Board of Directors of Athens Federal Community Bank
and Athens Bancshares Corporation. Mr. Wallace previously served as the Director of the Tennessee
Bureau of Investigation for 12 years from 1992 through 2003. Upon his retirement as Director of
the Tennessee Bureau of Investigation, Mr. Wallace returned home to Athens, Tennessee and presently
serves Tennessee Wesleyan College as Vice President of Administration. Age 64. Director since
2006.
The following directors have terms ending in 2012:
Elaine M. Cathcart
is a retired realtor. Age 61. Director since 1993.
Jeffrey L. Cunningham
serves as President and Chief Executive Officer of Athens Bancshares
Corporation and Athens Federal Community Bank. Mr. Cunningham is a licensed attorney with
significant experience in real estate and probate law as well as general corporate and commercial
practice. Mr. Cunningham joined Athens Federal Community Bank as Chief Operating Officer in October
1999 and became President and Chief Executive Officer in March 2000. Age 51. Director since 1992.
74
Table of Contents
G. Timothy Howard
is the President of Howard Brothers Logging, Inc., a timber products
company. Age 50. Director since 2001.
Executive Officers
The executive officers of Athens Bancshares Corporation and Athens Federal Community Bank are
elected annually by the board of directors and serve at the board's discretion. The executive
officers of Athens Bancshares Corporation and Athens Federal Community Bank are:
Name
Position
Jeffrey L. Cunningham
President and Chief Executive Officer
Michael R. Hutsell
Vice President, Chief Operating Officer and
Chief Financial Officer
Jay Leggett, Jr.
City President—Cleveland
Ross A. Millsaps
Vice President and Chief Credit Officer
Since the formation of Athens Bancshares Corporation, none of the company's executive
officers, directors or other personnel have received remuneration from Athens Bancshares
Corporation.
Below is information regarding our other executive officers who are not also directors. Each
individual has held his current position for at least the last five years, unless otherwise stated.
Ages presented are as of June 30, 2009.
Michael R. Hutsell
is Vice President, Chief Operating Officer and Chief Financial Officer of
Athens Bancshares Corporation and Athens Federal Community Bank. Mr. Hutsell joined Athens Federal
Community Bank in August 1998. Age 42.
Jay Leggett, Jr.
has served as City President of Athens Federal Community Bank's Cleveland
Division since March 2006. From November 2003 to March 2006, Mr. Leggett was Senior Vice President
of Lending for Bradley and Hamilton Counties, Tennessee at First Citizens Bank. Age 44.
Ross A. Millsaps
has served as Vice President and Chief Credit Officer of Athens Federal
Community Bank since April 2006. Before that time, Mr. Millsaps was a bank regulatory examiner
with the Office of Thrift Supervision. Age 42.
Meetings and Committees of the Board of Directors
We conduct business through meetings of our board of directors and its committees. During the
year ended December 31, 2008, the board of directors of Athens Federal Community Bank met 14 times.
Given that Athens Bancshares Corporation was incorporated in September 2009, the board of directors
of Athens Bancshares Corporation did not meet during the year ended December 31, 2008.
In connection with the formation of Athens Bancshares Corporation, the board of directors
established Audit, Compensation and Nominating and Corporate Governance Committees.
The Audit Committee consists of Lyn B. Thompson (Chair), James L. Carter, Jr., G. Scott Hannah
and M. Darrell Murray. The Audit Committee is responsible for providing oversight relating to our
financial statements and financial reporting process, systems of internal accounting and financial
controls, internal audit function, annual independent audit and the compliance and ethics programs
established by management and the board. Each member of the Audit Committee is independent in
accordance with the listing standards of the Nasdaq Stock Market. The board of directors of Athens
Bancshares Corporation has designated Lyn B. Thompson as an audit committee financial expert under
the rules of the Securities and Exchange Commission. The Audit Committee of Athens Bancshares
Corporation did not meet during the year ended December 31, 2008.
The Compensation Committee consists of G. Scott Hannah (Chair), Elaine M. Cathcart and G.
Timothy Howard. The Compensation Committee is responsible for human resources policies, salaries
and benefits, incentive
75
Table of Contents
compensation, executive development and management succession planning. Each member of the
Compensation Committee is independent in accordance with the listing standards of the Nasdaq Stock
Market. The Compensation Committee of Athens Bancshares Corporation did not meet during the year
ended December 31, 2008.
The Nominating and Corporate Governance Committee consists of Dr. James L. Carter, Jr., Elaine
M. Cathcart, G. Scott Hannah, G. Timothy Howard, M. Darrell Murray, Lyn B. Thompson and Larry D.
Wallace. The Nominating and Corporate Governance Committee is responsible for identifying
individuals qualified to become board members and recommending a group of nominees for election as
directors at each annual meeting of shareholders, ensuring that the board and its committees have
the benefit of qualified and experienced independent directors, and developing a set of corporate
governance polices and procedures. Each member of the Nominating and Corporate Governance
Committee is independent in accordance with the listing standards of the Nasdaq Stock Market. The
Nominating and Corporate Governance Committee of Athens Bancshares Corporation did not meet during
the year ended December 31, 2008.
Each of Athens Bancshares Corporation's committees listed above operates under a written
charter, which governs its composition, responsibilities and operations.
Corporate Governance Policies and Procedures
In addition to having established committees of the board of directors, Athens Bancshares
Corporation has also adopted several policies to govern the activities of both Athens Bancshares
Corporation and Athens Federal Community Bank, including a corporate governance policy and a code
of business conduct and ethics. The corporate governance policy sets forth:
•
the duties and responsibilities of each director;
•
the composition, responsibilities and operation of the board of directors;
•
the establishment and operation of board committees;
•
succession planning;
•
procedures for convening executive sessions of independent directors;
•
the board of directors' interaction with management and third parties; and
•
the evaluation of the performance of the board of directors and chief executive
officer.
The code of business conduct and ethics, which applies to all employees and directors,
addresses conflicts of interest, the treatment of confidential information, general employee
conduct and compliance with applicable laws, rules and regulations. In addition, the code of
business conduct and ethics is designed to deter wrongdoing and to promote honest and ethical
conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with
all applicable laws, rules and regulations.
76
Table of Contents
Executive Compensation
Summary Compensation Table
The following information is furnished for the principal executive officer and the next two
most highly compensated executive officers of Athens Bancshares Corporation whose total
compensation for the year ended December 31, 2008 exceeded $100,000.
All Other
Name and Principal Position
Year
Salary (1)
Bonus
Compensation (2)
Total
Jeffrey L. Cunningham
2008
$
249,854
$
—
$
139,325
$
389,179
President & Chief Executive Officer
Michael R. Hutsell
2008
144,200
—
18,693
162,893
Vice President, Chief Operating Officer and
Chief Financial Officer
Jay Leggett, Jr.
2008
116,699
40,845
35,501
193,045
City President—Cleveland
(1)
For Mr. Cunningham, includes $18,000 received in board fees during the year ended
December 31, 2008.
(2)
Details of the amounts disclosed in the "All Other Compensation" column are provided in
the table below:
Mr. Cunningham
Mr. Hutsell
Mr. Leggett
Employer contributions to 401(k) plan
$
22,331
$
14,630
$
14,582
Supplemental executive retirement plan
50,061
—
—
Deferred compensation credit
45,033
(a)
Perquisites
21,900
(b)
—
(c)
20,919
(d)
Total
$
139,325
$
18,693
$
35,501
(a)
Represents a non-cash credit by Athens Federal Community Bank to a deferred compensation
account for the benefit of Mr. Cunningham. See
"—Current Employment Agreement"
below.
(b)
Includes an automobile allowance of $15,210 and $6,598 for country club dues and
employer paid insurance premiums.
(c)
Did not exceed $10,000.
(d)
Includes an automobile allowance of $13,140 and $7,769 for country club dues and
employer paid insurance premiums.
Current Employment Agreement.
Athens Federal Community Bank has entered into an employment
agreement with Jeffrey L. Cunningham, our President and Chief Executive Officer. The agreement,
which became effective on January 1, 2008, provides for a three-year term, subject to annual
renewal by the board of directors for an additional year beyond the then-current expiration date.
On January 1, 2009, our board of directors renewed the agreement for an additional year,
effectively extending its term until December 31, 2011.
Under the agreement Mr. Cunningham will be paid an annual base salary of $238,809 for fiscal
2009 and is eligible for additional cash compensation upon satisfaction of certain performance
based goals relating to Athens Federal Community Bank's annual net after-tax income. Pursuant to
the agreement, Athens Federal Community Bank will also make an annual contribution to a deferred
compensation account equal to 20% of Mr. Cunningham's annual base compensation. Mr. Cunningham's
interest in the deferred compensation vests at the rate of 1/3 on the date of credit and 1/3 on
each of the next two anniversaries of the date of credit if (i) Mr. Cunningham's employment
terminates during the year due to good reason (as such term is defined in the agreement), death or
disability or (ii) upon the satisfaction of certain performance based goals relating to Athens
Federal Community Bank's net after-tax income and regulatory examination ratings. In addition to
cash compensation, Mr. Cunningham is also eligible to participate in all standard benefit programs
sponsored by us, including family health insurance coverage.
Pursuant to the terms of the agreement, in the event Mr. Cunningham's employment is terminated
by us for just cause, as such term is defined in the agreement, Mr. Cunningham will not be entitled
to receive any compensation for any period after his termination date. Alternatively, if Mr.
Cunningham's employment is
77
Table of Contents
terminated by us without just cause, Mr. Cunningham will generally be entitled to the following
benefits: (i) his annual base salary for the remaining term of the agreement, plus an additional
year of base salary, and (ii) either (a) a lump sum cash payment equal to the present value of his
continued participation in our benefit programs through the expiration of the agreement or (b)
continued participation in such benefit programs.
Under the agreement, if Mr. Cunningham voluntarily terminates his employment with us upon 90
days' written notice, he will be entitled to receive his compensation and any vested benefits
(including any vested deferred compensation benefits) up to the date of his termination. However,
in the event that Mr. Cunningham voluntarily terminates his employment with us for an event that
constitutes good reason, as such term is defined in the agreement, and we fail to remedy such event
within the time frame set forth in the agreement, Mr. Cunningham will be entitled to receive
benefits as if he had been terminated by us without just cause.
In the event Mr. Cunningham's employment is terminated by us due to death, we will provide Mr.
Cunningham's beneficiary with the compensation due to Mr. Cunningham through the expiration date of
his employment agreement. If Mr. Cunningham's employment is terminated due to disability, as such
term is defined in the agreement, the agreement provides that Mr. Cunningham will be entitled to
compensation and benefits for (i) any period prior to the establishment of such disability during
which Mr. Cunningham is unable to work due to the physical or mental infirmity (ii) any period of
disability prior to his termination of employment; and (iii) for the remaining term of the
agreement.
Proposed Employment Agreements.
Upon completion of the conversion, Athens Federal Community
Bank and Athens Bancshares Corporation will enter into employment agreements with each of Messrs.
Cunningham, Hutsell and Leggett. The agreement with Mr. Cunningham will replace the agreement
currently in place between Mr. Cunningham and Athens Federal Community Bank. Our continued success
depends to a significant degree on the skills and competence of these officers, and the employment
agreements are intended to ensure that we maintain a stable management base following the offering.
The employment agreements will each provide for three-year terms, subject to annual renewal by
the boards of directors for an additional year beyond the then-current expiration date. The
initial base salaries under the employment agreements will be $
, $
and $
for Messrs. Cunningham, Hutsell and Leggett, respectively. The agreements also will provide for
participation in employee benefit plans and programs maintained for the benefit of employees and
senior management personnel, including incentive compensation, health and welfare benefits,
retirement benefits and certain fringe benefits as described in the agreements and, in the case of
Mr. Cunningham, continued annual contributions to his deferred compensation account at the same
rate as provided for in his existing agreement.
Upon termination of an executive's employment for "cause," as defined in the agreement, the
executive will receive no further compensation or benefits under the agreement. If we terminate
the executive for reasons other than cause, or if the executive resigns after the occurrence of
specified circumstances that constitute constructive termination, the executive will continue to
receive his base salary for the remaining unexpired term of the agreement plus an additional 12
months. In addition, the executive will receive continued coverage under our medical, dental and
life insurance programs for 36 months.
Under each of the employment agreements, if, in connection with or following a change in
control (as described in the agreements), we terminate the executive without cause or if the
executive terminates employment voluntarily under certain circumstances specified in the agreement,
he will receive a severance payment equal to three times his average annual taxable compensation
for the five preceding taxable years. In addition, the executive will receive continued coverage
under our medical, dental and life insurance programs for 36 months.
Section 280G of the Internal Revenue Code provides that severance payments that equal or
exceed three times the individual's base amount are deemed to be "excess parachute payments" if
they are contingent upon a change in control. Individuals receiving excess parachute payments are
subject to a 20% excise tax on the amount of the payment in excess of the base amount, and we would
not be entitled to deduct such amount. The agreements will provide for the reduction, at the
election of the executives, of change in control payments to the executives to the extent necessary
to ensure that they will not receive "excess parachute payments," which otherwise would result
78
Table of Contents
in the imposition of an excise tax. If an executive does not elect to reduce the payments, the
executive may be subject to the excise tax.
Upon termination of employment (other than termination in connection with a change in
control), each executive will be required to adhere to a one-year non-competition provision.
We will agree to pay all reasonable costs and legal fees of the executives in relation to the
enforcement of the employment agreements, provided the executives succeed on the merits in a legal
judgment, arbitration proceeding or settlement. The employment agreements also provide for
indemnification of the executives to the fullest extent legally permissible.
Employee Severance Compensation Plan.
In connection with the conversion, we expect to adopt
the Athens Federal Community Bank Employee Severance Compensation Plan. The plan will provide
severance benefits to eligible employees who terminate employment in connection with a change in
control. Employees will be eligible for severance benefits under the plan if they complete a
minimum of one year of service and do not enter into a separate employment or change in control
agreement with Athens Federal Community Bank or an affiliate, including Athens Bancshares
Corporation. Under the severance plan, if, within twelve months after a change in control, an
employee's employment involuntarily terminates, or if the employee voluntarily terminates
employment without being offered continued employment in a comparable position, the terminated
employee will receive a severance payment equal to two weeks of base compensation for each year of
service, up to a maximum of twenty-six months of base compensation. Based solely on compensation
levels and years of service at June 30, 2009, and assuming that a change in control occurred on
June 30, 2009, and all eligible employees became entitled to severance payments, the aggregate
payments due under the severance plan would equal approximately $
.
Benefit Plans
Profit Sharing/
401(k)
Plan.
We maintain the Athens Federal Community Bank 401(k) Plan, a
tax-qualified defined contribution plan, for all employees of Athens Federal Community Bank who
satisfy the plan's eligibility requirements. Participants become eligible to participate in the
plan on the first day of the month that coincides with or next follows their date of employment.
Eligible employees may contribute up to 75% of their compensation to the plan on a pre-tax basis,
subject to limitations imposed by the Internal Revenue Code. For 2009, the salary deferral
contribution limit is $16,500; provided, however, that participants over age 50 may contribute an
additional $5,500 to the plan. Participants are always 100% vested in their salary deferral
contributions. In addition to salary deferral contributions, the plan provides that we will make a
safe harbor matching contribution equal to 100% of the participant's deferrals, up to 6% of the
participant's compensation. In addition, we currently make monthly basic contributions equal to 3%
of each participant's compensation. Participants are 100% vested in employer matching
contributions under the plan. Participants become vested in other employer contributions at the
rate of 33.3% per year beginning after two years of service. The plan allows participants to take
loans and other in service distributions in accordance with certain requirements set forth in the
plan. Participants have individual accounts under the plan and may direct the investment of their
accounts among a variety of investment funds. In connection with the offering, the plan has added
another investment alternative, the Athens Bancshares Corporation Stock Fund (the "Stock Fund"),
which will permit participants to invest their 401(k) plan funds in Athens Bancshares Corporation
common stock. A participant who elects to purchase common stock in the offering through the plan
will receive the same subscription priority, and be subject to the same individual purchase
limitations, as if the participant had elected to purchase the common stock using funds outside the
plan. See
"The Conversion and Stock Offering—Subscription Offering and Subscription Rights"
and
"—Limitations on the Purchase of Shares."
The Stock Fund trustee will purchase common stock in
the offering on behalf of plan participants, to the extent that shares are available. Participants
will direct the trustee regarding the voting of shares purchased for their plan accounts through
the Stock Fund.
will serve as custodian of the shares held in the Stock Fund.
Employee Stock Ownership Plan.
In connection with the conversion, Athens Federal Community
Bank has adopted an employee stock ownership plan for eligible employees. Eligible employees will
participate in the employee stock ownership plan as of the first plan entry date (January 1st or
July 1st) following or coincident with their date of employment.
79
Table of Contents
We have engaged a third party trustee (
) to purchase in the offering, on
behalf of the employee stock ownership plan, 8% of the sum of the number of shares of Athens
Bancshares Corporation common stock sold in the conversion and contributed to the charitable
foundation (
,
and
shares
at the minimum, midpoint and maximum of the
offering range, respectively). The employee stock ownership plan intends to fund its stock
purchase through a loan from Athens Bancshares Corporation equal to 100% of the aggregate purchase
price of the common stock. The loan will be repaid principally through Athens Federal Community
Bank's contributions to the employee stock ownership plan and dividends payable on common stock
held by the plan over an expected 15-year term of the loan. We anticipate that the fixed interest
rate for the employee stock ownership plan loan will be the prime rate, as published in the Wall
Street Journal, on the closing date of the offering. See
"Pro Forma Data."
The trustee will hold the shares purchased in a loan suspense account, and will release the
shares from the suspense account on a pro rata basis as Athens Federal Community Bank repays the
loan. The trustee will allocate the shares released among active participants on the basis of each
active participant's proportional share of compensation. Participants will vest in their employee
stock ownership plan allocations at the rate of 33.3% per year beginning after two years of
service. Participants will be credited with past service for vesting purposes under the employee
stock ownership plan. Participants will become fully vested upon age 65, death or disability, a
change in control, or termination of the plan. Generally, participants will receive distributions
from the employee stock ownership plan upon separation from service. The plan reallocates any
unvested shares of common stock forfeited upon termination of employment among the remaining
participants in the plan.
Participants may direct the plan trustee how to vote the shares of common stock credited to
their accounts. The plan trustee will vote all unallocated shares and allocated shares for which
participants do not provide instructions on any matter in the same ratio as it votes those shares
for which participants provide instructions, subject to fulfillment of its fiduciary
responsibilities as trustee.
Under applicable accounting requirements, Athens Federal Community Bank will record a
compensation expense for a leveraged employee stock ownership plan at the fair market value of the
shares when they are committed to be released from the suspense account to participants' accounts
under the plan.
Life Insurance Benefits.
We have entered into group carve out plans with Messrs. Cunningham
and Hutsell pursuant to which the proceeds of certain insurance policies are divided upon the death
of the executives. Under the plans, if Messrs. Cunningham or Hutsell dies prior to termination of
employment, his beneficiary will receive a benefit equal to three times the executive's annual
salary less $50,000, up to a maximum benefit of $450,000. The executives' participation in the
plans terminates at the time the executive terminates employment (other than on account of death or
following a change in control).
Nonqualified Deferred Compensation
Current Supplemental Executive Retirement Plan.
In 2006, we entered into a separate
supplemental executive retirement agreement with Mr. Cunningham. Under the agreement, we will
provide Mr. Cunningham with an annual benefit (payable in monthly installments) of $160,000 for 20
years, if Mr. Cunningham separates from service with Athens Federal Community Bank after attaining
age 58. If we terminate Mr. Cunningham's service prior to age 58 for reasons other than cause or
disability, Mr. Cunningham will receive a reduced annual benefit (based on the amount we have
accrued toward the normal retirement benefit) for 20 years, payable commencing at the time Mr.
Cunningham turns age 58. If Mr. Cunningham voluntarily terminates his service with us prior to age
58, he will receive the vested portion of the account value (determined based on the amount we have
accrued toward the normal retirement benefit) for 20 years, payable commencing at the time Mr.
Cunningham turns age 58. Under the plan, Mr. Cunningham currently vests at the rate of 8.93% per
year and will be 37.50% vested as of December 31, 2009. If Mr. Cunningham separates from service
with us prior to attaining age 58 as a result of having become disabled, he will receive an annual
benefit equal to 100% of the account value for 20 years, commencing at the time he separates from
service. If Mr. Cunningham dies while in active service with Athens Federal Community Bank, his
beneficiary will receive the normal retirement benefit that otherwise would have been paid to him
for 20 years. If Mr. Cunningham dies after separating from service with us, his beneficiary will
receive or continue to receive the benefit to which Mr. Cunningham was otherwise entitled. In
connection with the conversion, we anticipate amending and restating the supplemental retirement
agreement and adding a change in
80
Table of Contents
control provision under which Mr. Cunningham would be entitled to the normal retirement benefit if
he separates from service for any reason, other than for cause, following a change in control. The
change in control benefit would be payable at the later of his separation from service or his
normal retirement age (age 58) under the agreement.
Proposed Excess Benefit Supplemental Executive Retirement Plan.
Following the conversion, we
intend to implement a supplemental executive retirement plan to provide for supplemental retirement
benefits with respect to the employee stock ownership plan and 401(k) plan. The plan will provide
participating executives with benefits otherwise limited by other provisions of the Internal
Revenue Code or the terms of the employee stock ownership plan loan. Specifically, the plan will
provide benefits to eligible individuals (those designated by our board of directors) that cannot
be provided under the employee stock ownership plan or 401(k) plan as a result of the limitations
imposed by the Internal Revenue Code, but that would have been provided under those plans but for
such limitations. In addition to providing for benefits lost under tax-qualified plans as a result
of limitations imposed by the Internal Revenue Code, the new plan will also provide supplemental
benefits to designated individuals upon a change of control before the complete scheduled repayment
of the employee stock ownership plan loan. Generally, upon a change in control, the supplemental
executive retirement plan will provide the participant with a benefit equal to the benefit the
individual would have received under the employee stock ownership plan had he remained employed
throughout the term of the employee stock ownership plan loan less the benefits actually provided
under the employee stock ownership on behalf of the participant. An individual's benefit under the
supplemental executive retirement plan will generally become payable upon a separation from
service. Athens Federal Community Bank expects that Messrs. Hutsell and Leggett will participate
in the plan. The board of directors may also designate other officers as participants in future
years.
Future Equity Incentive Plan.
Following the conversion, Athens Bancshares Corporation plans
to adopt an equity incentive plan that will provide for grants of stock options and restricted
stock. In accordance with applicable regulations, Athens Bancshares Corporation anticipates that
the plan, if adopted within the first year after the offering, will authorize a number of stock
options equal to 10% of the sum of the shares sold in the conversion stock offering and contributed
to the charitable foundation, and a number of shares of restricted stock equal to 4% of the sum of
the shares sold in the offering and contributed to the charitable foundation. Therefore, the
number of shares reserved under the plan, if adopted within that one-year period, will range from
shares, assuming
shares are sold in the offering and contributed to the
charitable foundation, to
shares, assuming
shares are sold in the offering and
contributed to the charitable foundation.
Director Compensation
The following table provides the compensation received by individuals who served as
non-employee directors of Athens Federal Community Bank during the 2008 fiscal year.
Fees Earned or
Paid in Cash
Total
Dr. James L. Carter, Jr.
$
18,000
$
18,000
Elaine M. Cathcart
18,000
18,000
G. Scott Hannah
18,000
18,000
G. Timothy Howard
20,700
20,700
M. Darrell Murray
18,900
18,900
Lyn B. Thompson
18,000
18,000
Larry D. Wallace
18,000
18,000
81
Table of Contents
Cash Retainer and Meeting Fees For Non-Employee Directors.
The following table sets forth the
applicable retainers and fees that will be paid to our directors for their service on the board of
directors of Athens Federal Community Bank as of September 1, 2009 and for their service on the
board of directors of Athens Bancshares Corporation following the completion of the conversion.
Board of Directors of Athens Federal Community Bank:
Monthly Retainer
$
1,500
Additional Monthly Retainer for Chairman of the Board
500
Additional Monthly Retainer for Audit Committee
Chairperson
1,000
Additional Monthly Retainer for Compensation Committee
Chairperson
500
Board of Directors of Athens Bancshares Corporation:
Monthly Retainer
$
400
Director's Deferred Compensation Agreement.
Athens Federal Community Bank has entered into a
director's deferred compensation agreement with James L. Carter, Jr. Under the terms of the
agreement, Dr. Carter may defer the receipt of meeting and other board fees until the date he
retires from the board of directors. Pursuant to the agreement, within 90 days after his
retirement as a director, Dr. Carter may elect to receive any deferred compensation, together with
accumulated interest thereon, in either a single lump sum or in equal monthly installments
distributable over a period of 60 to 180 months. In the event that Dr. Carter elects to receive
his deferred compensation amounts in monthly installments, Athens Federal Community Bank will
credit the monthly payments with an interest rate equal to the highest rate allowed to be credited
on savings or certificate accounts as of December 31 of the succeeding calendar year after Dr.
Carter's election. Furthermore, in the event that Dr. Carter experiences financial hardship, as
such term is defined in the agreement, he may apply to Athens Federal Community Bank for the
distribution of all or any part of his deferred compensation account. If Dr. Carter dies prior to
the commencement of benefit payments under the agreement, the agreement provides that benefits will
be payable to Dr. Carter's beneficiary, together with accumulated interest thereon, in either a
single lump sum or in equal monthly installments distributable over a period of 60 to 180 months.
Dr. Carter does not currently defer fees under the agreement. At June 30, 2009, the balance of Dr.
Carter's deferred compensation account totaled $379,000.
Transactions with Athens Federal Community Bank
Loans and Extensions of Credit.
The Sarbanes-Oxley Act of 2002 generally prohibits loans by
Athens Bancshares Corporation to its executive officers and directors. However, the Sarbanes-Oxley
Act contains a specific exemption from such prohibition for loans by Athens Federal Community Bank
to its executive officers and directors in compliance with federal banking regulations. Federal
regulations require that all loans or extensions of credit to executive officers and directors of
insured institutions must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with other persons and must
not involve more than the normal risk of repayment or present other unfavorable features. Athens
Federal Community Bank is therefore prohibited from making any new loans or extensions of credit to
executive officers and directors at different rates or terms than those offered to the general
public. Notwithstanding this rule, federal regulations permit Athens Federal Community Bank to
make loans to executive officers and directors at reduced interest rates if the loan is made under
a benefit program generally available to all other employees and does not give preference to any
executive officer or director over any other employee.
In addition, loans made to a director or executive officer in an amount that, when aggregated
with the amount of all other loans to the person and his or her related interests, are in excess of
the greater of $25,000 or 5% of Athens Federal Community Bank's capital and surplus, up to a
maximum of $500,000, must be approved in advance by a majority of the disinterested members of the
board of directors. See
"Regulation and Supervision — Regulation of Federal Savings Associations
— Transactions with Related Parties."
82
Table of Contents
Athens Federal Community Bank currently maintains a preferred rate employee loan program that
is available to all employees of Athens Federal Community Bank and its subsidiaries and does not
give preference to any executive officer over any other employee. Non-employee directors of Athens
Federal Community Bank are not eligible to participate in the preferred rate employee loan program.
Pursuant to the terms of the program, consumer loan rates are generally based on Athens Federal
Community Bank's most recent cost of funds, which is determined on a monthly basis by Athens
Federal Community Bank's Vice President, Chief Operating Officer and Chief Financial Officer. In
addition, under the terms of the program, real estate loans are generally offered at the prevailing
loan rate less 1.0%, with the exception of certain adjustable rate loans, which will generally
remain at the prevailing rate during the discounted or locked period and then be adjusted to 1.0%
less than the prevailing margin. With respect to real estate loans, origination fees are waived on
both in-house and secondary market loans and employee loan closing costs are equal to those fees
imposed upon third parties. Home equity lines of credit are also offered to employees at a rate
equal to the Wall Street Journal prime rate index minus 0.50%. The minimum and maximum rate for
employee home equity loans is 6.5% and 21.0%, respectively, and all annual fees are waived for
employees.
The preferred rate employee loan program is made available to employees at the completion of
90 days of employment and all loan funds must be used by employees for personal purposes only. In
addition, the program does not extend to members of an employee's family and loan benefits may not
be used to fund an employee's outside business activities. Reduced employee loan margins only
apply to employees who meet Athens Federal Community Bank's normal underwriting criteria and
employee loans made pursuant to the program are subject to credit approval and normal underwriting
standards. If an employee's employment with Athens Federal Community Bank is terminated, rates
made available under the preferred employee loan program will increase to the terms of the loan
contained in the initial disclosure.
At June 30, 2009, none of our named executive officers had
any outstanding loans under the preferred rate employee loan program.
However, at that date, Ross
A. Millsaps, our Vice President and Chief Credit Officer, had an outstanding home equity line of
credit and an outstanding construction loan for construction of a new primary residence with a
total commitment of $525,000 under the preferred rate employee loan program. At June 30, 2009, the
outstanding balances of Mr. Millsaps' home equity line of credit and construction loan were $48,000
and $218,000, respectively.
The aggregate outstanding balance of loans extended by Athens Federal Community Bank to its
executive officers and directors and related parties was $906,000 at June 30, 2009, or
approximately 2.1% of pro forma shareholders' equity assuming that 2,185,000 shares are sold in the
offering and contributed to the charitable foundation at the maximum of the offering range. These
loans were performing according to their original terms at June 30, 2009. In addition, these loans
were made in the ordinary course of business, on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable loans with persons not related
to Athens Federal Community Bank, and did not involve more than the normal risk of collectibility
or present other unfavorable features when made.
Other Transactions.
Since January 1, 2008, there have been no transactions and there are no
currently proposed transactions in which we were or are to be a participant and the amount involved
exceeds $120,000, and in which any of our executive officers and directors had or will have a
direct or indirect material interest.
Indemnification for Directors and Officers
Athens Bancshares Corporation's charter provides that Athens Bancshares Corporation shall
indemnify all officers, directors and employees of Athens Bancshares Corporation to the fullest
extent permitted under Tennessee law against all expenses and liabilities reasonably incurred by
them in connection with or arising out of any action, suit or proceeding in which they may be
involved by reason of their having been a director or officer of Athens Bancshares Corporation.
Such indemnification may include the advancement of funds to pay for or reimburse reasonable
expenses incurred by an indemnified party to the fullest extent permitted under Tennessee law.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of Athens Bancshares Corporation pursuant
to its charter or otherwise, Athens Bancshares Corporation has been advised by counsel that, in the
opinion of the Securities and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
83
Table of Contents
Subscriptions by Executive Officers and Directors
The following table presents certain information as to the approximate purchases of common
stock by our directors and executive officers, including their associates, if any, as defined by
applicable regulations. No individual has entered into a binding agreement to purchase these
shares and, therefore, actual purchases could be more or less than indicated. Directors and
executive officers and their associates may not purchase more than 31% of the shares sold in the
offering. Like all of our depositors, our directors and officers have subscription rights based on
their deposits. For purposes of the following table, sufficient shares are assumed to be available
to satisfy subscriptions in all categories. All directors and officers as a group would own 18.2%
of our outstanding shares at the minimum of the offering range and 13.4% of our outstanding shares
at the maximum of the offering range. These percentages reflect the shares to be issued to the
charitable foundation.
Proposed Purchases of Stock in the Offering
Name
Number of Shares
Dollar Amount
Directors:
Dr. James L. Carter, Jr.
20,000
$
200,000
Elaine M. Cathcart
50,000
500,000
Jeffrey L. Cunningham
30,000
300,000
G. Scott Hannah
30,000
300,000
G. Timothy Howard
7,500
75,000
M. Darrell Murray
40,000
400,000
Lyn B. Thompson
35,000
350,000
Larry D. Wallace
5,000
50,000
Executive Officers Who Are Not Directors:
Michael R. Hutsell
20,000
200,000
Jay Leggett, Jr.
50,000
500,000
Ross A. Millsaps
6,250
62,500
All directors and executive officers
as a group (11 persons)
293,750
$
2,937,500
84
Table of Contents
Regulation and Supervision
General
Athens Federal Community Bank is subject to extensive regulation, examination and supervision
by the Office of Thrift Supervision, as its primary federal regulator, and the Federal Deposit
Insurance Corporation, as its deposits insurer. Athens Federal Community Bank is a member of the
Federal Home Loan Bank System and its deposit accounts are insured up to applicable limits by the
Deposit Insurance Fund managed by the Federal Deposit Insurance Corporation. Athens Federal
Community Bank must file reports with the Office of Thrift Supervision and the Federal Deposit
Insurance Corporation concerning its activities and financial condition in addition to obtaining
regulatory approvals before entering into certain transactions such as mergers with, or
acquisitions of, other financial institutions. There are periodic examinations by the Office of
Thrift Supervision and, under certain circumstances, the Federal Deposit Insurance Corporation to
evaluate Athens Federal Community Bank's safety and soundness and compliance with various
regulatory requirements. This regulatory structure is intended primarily for the protection of the
insurance fund and depositors. The regulatory structure also gives the regulatory authorities
extensive discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of assets and the
establishment of adequate loan loss reserves for regulatory purposes. Any change in such policies,
whether by the Office of Thrift Supervision, the Federal Deposit Insurance Corporation or Congress,
could have a material adverse impact on Athens Bancshares Corporation and Athens Federal Community
Bank and their operations. Athens Bancshares Corporation, as a savings and loan holding company,
is required to file certain reports with, is subject to examination by, and otherwise must comply
with the rules and regulations of the Office of Thrift Supervision. Athens Bancshares Corporation
will also be subject to the rules and regulations of the Securities and Exchange Commission under
the federal securities laws.
Certain of the regulatory requirements that are or will be applicable to Athens Federal
Community Bank and Athens Bancshares Corporation are described below. This description of statutes
and regulations is not intended to be a complete explanation of such statutes and regulations and
their effects on Athens Federal Community Bank and Athens Bancshares Corporation and is qualified
in its entirety by reference to the actual statutes and regulations.
Regulation of Federal Savings Associations
Business Activities.
Federal law and regulations, primarily the Home Owners' Loan Act and the
regulations of the Office of Thrift Supervision, govern the activities of federal savings banks,
such as Athens Federal Community Bank. These laws and regulations delineate the nature and extent
of the activities in which federal savings banks may engage. In particular, certain lending
authority for federal savings banks, e.g., commercial, non-residential real property loans and
consumer loans, is limited to a specified percentage of the institution's capital or assets.
Branching.
Federal savings banks are authorized to establish branch offices in any state or
states of the United States and its territories, subject to the approval of the Office of Thrift
Supervision.
Capital Requirements.
The Office of Thrift Supervision's capital regulations require federal
savings institutions to meet three minimum capital standards: a 1.5% tangible capital to total
assets ratio, a 4% leverage ratio (3% for institutions receiving the highest rating on the CAMELS
examination rating system) and an 8% risk-based capital ratio. In addition, the prompt corrective
action standards discussed below establish, in effect, a minimum 2% tangible capital standard, a 4%
leverage ratio (3% for institutions receiving the highest rating on the CAMELS system) and,
together with the risk-based capital standard itself, a 4% Tier 1 risk-based capital standard. The
Office of Thrift Supervision regulations also require that, in meeting the tangible, leverage and
risk-based capital standards, institutions must generally deduct investments in and loans to
subsidiaries engaged in activities as principal that are not permissible for national banks.
The risk-based capital standard requires federal savings institutions to maintain Tier 1
(core) and total capital (which is defined as core capital and supplementary capital) to
risk-weighted assets of at least 4% and 8%, respectively. In determining the amount of
risk-weighted assets, all assets, including certain off-balance sheet assets, recourse obligations,
residual interests and direct credit substitutes, are multiplied by a risk-weight factor of
85
Table of Contents
0% to 100%, assigned by the Office of Thrift Supervision capital regulation based on the risks
believed inherent in the type of asset. Core (Tier 1) capital is defined as common shareholders'
equity (including retained earnings), certain noncumulative perpetual preferred stock and related
surplus and minority interests in equity accounts of consolidated subsidiaries, less intangibles
other than certain mortgage servicing rights and credit card relationships. The components of
supplementary capital currently include cumulative preferred stock, long-term perpetual preferred
stock, mandatory convertible securities, subordinated debt and intermediate preferred stock, the
allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and up to
45% of unrealized gains on available-for-sale equity securities with readily determinable fair
market values. Overall, the amount of supplementary capital included as part of total capital
cannot exceed 100% of core capital.
The Office of Thrift Supervision also has authority to establish individual minimum capital
requirements in appropriate cases upon a determination that an institution's capital level is or
may become inadequate in light of the particular circumstances. At June 30, 2009 and December 31,
2008, Athens Federal Community Bank met each of these capital requirements. See note 10 of the
notes to consolidated financial statements included in this prospectus.
Prompt Corrective Regulatory Action.
The Office of Thrift Supervision is required to take
certain supervisory actions against undercapitalized institutions, the severity of which depends
upon the institution's degree of undercapitalization. Generally, a savings institution that has a
ratio of total capital to risk weighted assets of less than 8%, a ratio of Tier 1 (core) capital to
risk-weighted assets of less than 4% or a ratio of core capital to total assets of less than 4% (3%
or less for institutions with the highest examination rating) is considered to be
"undercapitalized." A savings institution that has a total risk-based capital ratio of less than
6%, a Tier 1 capital ratio of less than 3% or a leverage ratio that is less than 3% is considered
to be "significantly undercapitalized" and a savings institution that has a tangible capital to
assets ratio equal to or less than 2% is deemed to be "critically undercapitalized." Subject to a
narrow exception, the Office of Thrift Supervision is required to appoint a receiver or conservator
within specified time frames for an institution that is "critically undercapitalized." An
institution must file a capital restoration plan with the Office of Thrift Supervision within 45
days of the date it receives notice that it is "undercapitalized," "significantly undercapitalized"
or "critically undercapitalized." Compliance with the plan must be guaranteed by any parent
holding company in the amount of the lesser of 5% of the association's total assets when it became
undercapitalized or the amount necessary to achieve full compliance at the time the association
first failed to comply. In addition, numerous mandatory supervisory actions become immediately
applicable to an undercapitalized institution, including, but not limited to, increased monitoring
by regulators and restrictions on growth, capital distributions and expansion. "Significantly
undercapitalized" and "critically undercapitalized" institutions are subject to more extensive
mandatory regulatory actions. The Office of Thrift Supervision could also take any one of a number
of discretionary supervisory actions, including the issuance of a capital directive and the
replacement of senior executive officers and directors.
Loans to One Borrower.
Federal law provides that savings institutions are generally subject
to the limits on loans to one borrower applicable to national banks. Subject to certain
exceptions, a savings institution may not make a loan or extend credit to a single or related group
of borrowers in excess of 15% of its unimpaired capital and surplus. An additional amount may be
lent, equal to 10% of unimpaired capital and surplus, if secured by specified readily-marketable
collateral. See
"Our Business — Lending Activities — Loans to One Borrower."
Standards for Safety and Soundness.
As required by statute, the federal banking agencies have
adopted Interagency Guidelines Establishing Standards for Safety and Soundness. The guidelines set
forth the safety and soundness standards that the federal banking agencies use to identify and
address problems at insured depository institutions before capital becomes impaired. If the Office
of Thrift Supervision determines that a savings institution fails to meet any standard prescribed
by the guidelines, the Office of Thrift Supervision may require the institution to submit an
acceptable plan to achieve compliance with the standard.
Limitation on Capital Distributions.
Office of Thrift Supervision regulations impose
limitations upon all capital distributions by a savings institution, including cash dividends,
payments to repurchase its shares and payments to shareholders of another institution in a cash-out
merger. Under the regulations, an application to and the prior approval of the Office of Thrift
Supervision is required before any capital distribution if the institution does not meet the
criteria for "expedited treatment" of applications under Office of Thrift Supervision regulations
(i.e., generally, examination and Community Reinvestment Act ratings in the two top categories),
the total capital distributions for the calendar year exceed net income for that year plus the
amount of retained net income for the
86
Table of Contents
preceding two years, the institution would be undercapitalized following the distribution or the
distribution would otherwise be contrary to a statute, regulation or agreement with the Office of
Thrift Supervision. If an application is not required, the institution must still provide prior
notice to the Office of Thrift Supervision of the capital distribution if, like Athens Federal
Community Bank, it is a subsidiary of a holding company. If Athens Federal Community Bank's capital
were ever to fall below its regulatory requirements or the Office of Thrift Supervision notified it
that it was in need of increased supervision, its ability to make capital distributions could be
restricted. In addition, the Office of Thrift Supervision could prohibit a proposed capital
distribution that would otherwise be permitted by the regulation, if the agency determines that
such distribution would constitute an unsafe or unsound practice.
Qualified Thrift Lender Test.
Federal law requires savings institutions to meet a qualified
thrift lender test. Under the test, a savings association is required to either qualify as a
"domestic building and loan association" under the Internal Revenue Code or maintain at least 65%
of its "portfolio assets" (total assets less: (i) specified liquid assets up to 20% of total
assets; (ii) intangibles, including goodwill; and (iii) the value of property used to conduct
business) in certain "qualified thrift investments" (primarily residential mortgages and related
investments, including certain mortgage-backed securities) in at least 9 months out of each
12-month period.
A savings institution that fails the qualified thrift lender test is subject to certain
operating restrictions and may be required to convert to a bank charter. Recent legislation has
expanded the extent to which education loans, credit card loans and small business loans may be
considered "qualified thrift investments." As of June 30, 2009, Athens Federal Community Bank
maintained 87.1% of its portfolio assets in qualified thrift investments and, therefore, met the
qualified thrift lender test.
Transactions with Related Parties.
Athens Federal Community Bank's authority to engage in
transactions with "affiliates" is limited by Office of Thrift Supervision regulations and Sections
23A and 23B of the Federal Reserve Act as implemented by the Federal Reserve Board's Regulation W.
The term "affiliates" for these purposes generally means any company that controls or is under
common control with an institution. Athens Bancshares Corporation and any non-savings institution
subsidiaries would be affiliates of Athens Federal Community Bank. In general, transactions with
affiliates must be on terms that are as favorable to the institution as comparable transactions
with non-affiliates. In addition, certain types of transactions are restricted to 10% of an
institution's capital and surplus with any one affiliate and 20% of capital and surplus with all
affiliates. Collateral in specified amounts must usually be provided by affiliates in order to
receive loans from an institution. In addition, savings institutions are prohibited from lending to
any affiliate that is engaged in activities that are not permissible for bank holding companies and
no savings institution may purchase the securities of any affiliate other than a subsidiary.
The Sarbanes-Oxley Act of 2002 generally prohibits a company from making loans to its
executive officers and directors. However, that act contains a specific exception for loans by a
depository institution to its executive officers and directors in compliance with federal banking
laws. Under such laws, Athens Federal Community Bank's authority to extend credit to executive
officers, directors and 10% shareholders ("insiders"), as well as entities such persons control, is
limited. The law restricts both the individual and aggregate amount of loans Athens Federal
Community Bank may make to insiders based, in part, on Athens Federal Community Bank's capital
position and requires certain board approval procedures to be followed. Such loans must be made on
terms substantially the same as those offered to unaffiliated individuals and not involve more than
the normal risk of repayment. There is an exception for loans made pursuant to a benefit or
compensation program that is widely available to all employees of the institution and does not give
preference to insiders over other employees. There are additional restrictions applicable to loans
to executive officers. For information about transactions with our directors and officers, see
"Our
Management —Transactions with Athens Federal Community Bank."
Enforcement.
The Office of Thrift Supervision has primary enforcement responsibility over
federal savings institutions and has the authority to bring actions against the institution and all
institution-affiliated parties, including shareholders, and any attorneys, appraisers and
accountants who knowingly or recklessly participate in wrongful action likely to have an adverse
effect on an insured institution. Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers and/or directors to institution
of receivership, or conservatorship. Civil penalties cover a wide range of violations and can
amount to $25,000 per day, or even $1 million per day in especially egregious cases. The Federal
Deposit Insurance Corporation has
87
Table of Contents
authority to recommend to the Director of the Office of Thrift Supervision that enforcement action
be taken with respect to a particular savings institution. If action is not taken by the Director,
the Federal Deposit Insurance Corporation has authority to take such action under certain
circumstances. Federal law also establishes criminal penalties for certain violations.
Assessments.
Federal savings banks are required to pay assessments to the Office of Thrift
Supervision to fund its operations. The general assessments, paid on a semi-annual basis, are
based upon the savings institution's total assets, including consolidated subsidiaries, as reported
in the institution's latest quarterly thrift financial report, the institution's financial
condition and the complexity of its asset portfolio.
Insurance of Deposit Accounts.
Athens Federal Community Bank's deposits are insured up to
applicable limits by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation.
Under the Federal Deposit Insurance Corporation's risk-based assessment system, insured
institutions are assigned to one of four risk categories based on supervisory evaluations,
regulatory capital levels and certain other factors with less risky institutions paying lower
assessments. No institution may pay a dividend if in default of the federal deposit insurance
assessment.
For 2008, assessments ranged from five to forty-three basis points of assessable deposits.
Due to losses incurred by the Deposit Insurance Fund in 2008 from failed institutions, and
anticipated future losses, the Federal Deposit Insurance Corporation, pursuant to a Restoration
Plan to replenish the fund, adopted an across the board seven basis point increase in the
assessment range for the first quarter of 2009. The Federal Deposit Insurance Corporation adopted
further refinements to its risk-based assessment that were effective April 1, 2009 and effectively
make the range seven to 77
1/2
basis points. The Federal Deposit Insurance Corporation
may adjust the assessment scale uniformly from one quarter to the next, except that no adjustment
can deviate more than three basis points from the base scale without notice and comment rulemaking.
The Federal Deposit Insurance Corporation has imposed on all insured institutions a special
emergency assessment of 5 basis points of total assets less Tier 1 capital as of June 30, 2009
(subject to a cap of 10 basis points of each institution's deposit assessment base on the same
date) in order to cover losses to the Deposit Insurance Fund. The special assessment is payable on
September 30, 2009. The Federal Deposit Insurance Corporation has also provided for the
possibility of two additional special assessments for the final two quarters of 2009 if deemed
necessary.
Due to the recent difficult economic conditions, deposit insurance per account owner has been
raised to $250,000 for all types of accounts until January 1, 2014. In addition, the Federal
Deposit Insurance Corporation adopted an optional Temporary Liquidity Guarantee Program by which,
for a fee, noninterest-bearing transaction accounts would receive unlimited insurance coverage
until December 31, 2009 and certain senior unsecured debt issued by institutions and their holding
companies would temporarily be guaranteed by the Federal Deposit Insurance Corporation. Athens
Federal Community Bank made the business decision to participate in the unlimited
noninterest-bearing transaction account coverage and also opted to participate in the unsecured
debt guarantee program.
The Federal Deposit Insurance Corporation may pay dividends to insured institutions once the
Deposit Insurance Fund reserve ratio equals or exceeds 1.35% of estimated insured deposits.
In addition to the assessment for deposit insurance, institutions are required to make
payments on bonds issued in the late 1980s by the Financing Corporation to recapitalize a
predecessor deposit insurance fund. This payment is established quarterly and during the four
quarters ended June 30, 2009 averaged 1.10 basis points of assessable deposits.
The Federal Deposit Insurance Corporation has authority to increase insurance assessments. A
significant increase in insurance premiums would likely have an adverse effect on the operating
expenses and results of operations of Athens Federal Community Bank. Management cannot predict
what insurance assessment rates will be in the future.
88
Table of Contents
Insurance of deposits may be terminated by the Federal Deposit Insurance Corporation upon a
finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound
condition to continue operations or has violated any applicable law, regulation, rule, order or
condition imposed by the Federal Deposit Insurance Corporation. The management of the Bank does
not know of any practice, condition or violation that might lead to termination of deposit
insurance.
Federal Home Loan Bank System.
Athens Federal Community Bank is a member of the Federal Home
Loan Bank System, which consists of (12) regional Federal Home Loan Banks. The Federal Home Loan
Bank provides a central credit facility primarily for member institutions. Athens Federal
Community Bank, as a member of the Federal Home Loan Bank of Cincinnati, is required to acquire and
hold shares of capital stock in that Federal Home Loan Bank. At June 30, 2009, Athens Federal
Community Bank complied with this requirement with an investment in Federal Home Loan Bank stock of
$2.9 million.
The Federal Home Loan Banks are required to provide funds for the resolution of insolvent
thrifts in the late 1980s and to contribute funds for affordable housing programs. These
requirements, or general results of operations, could reduce or eliminate the dividends that the
Federal Home Loan Banks pay to their members and result in the Federal Home Loan Banks imposing a
higher rate of interest on advances to their members. If dividends were reduced, or interest on
future Federal Home Loan Bank advances increased, our net interest income would likely also be
reduced.
Community Reinvestment Act.
Under the Community Reinvestment Act, as implemented by Office of
Thrift Supervision regulations, a savings association has a continuing and affirmative obligation
consistent with its safe and sound operation to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The Community Reinvestment Act does not establish
specific lending requirements or programs for financial institutions nor does it limit an
institution's discretion to develop the types of products and services that it believes are best
suited to its particular community, consistent with the Community Reinvestment Act. The Community
Reinvestment Act requires the Office of Thrift Supervision, in connection with its examination of a
savings association, to assess the institution's record of meeting the credit needs of its
community and to take such record into account in its evaluation of certain applications by such
institution.
The Community Reinvestment Act requires public disclosure of an institution's rating and
requires the Office of Thrift Supervision to provide a written evaluation of an association's
Community Reinvestment Act performance utilizing a four-tiered descriptive rating system.
Athens Federal Community Bank received a "satisfactory" rating as a result of its most recent
Community Reinvestment Act assessment.
Other Regulations
Interest and other charges collected or contracted for by Athens Federal Community Bank are
subject to state usury laws and federal laws concerning interest rates. Athens Federal Community
Bank's operations are also subject to federal laws applicable to credit transactions, such as the:
•
Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
•
Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide
information to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs of the
community it serves;
•
Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed
or other prohibited factors in extending credit;
•
Fair Credit Reporting Act of 1978, governing the use and provision of information to
credit reporting agencies;
89
Table of Contents
•
Fair Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies; and
•
Rules and regulations of the various federal agencies charged with the
responsibility of implementing such federal laws.
The operations of Athens Federal Community Bank also are subject to the:
•
Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribes procedures for complying with administrative
subpoenas of financial records;
•
Electronic Funds Transfer Act and Regulation E promulgated thereunder, which governs
automatic deposits to and withdrawals from deposit accounts and customers' rights and
liabilities arising from the use of automated teller machines and other electronic
banking services;
•
Check Clearing for the 21st Century Act (also known as "Check 21"), which gives
"substitute checks," such as digital check images and copies made from that image, the
same legal standing as the original paper check;
•
Title III of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (referred to as the "USA
PATRIOT Act"), which significantly expands the responsibilities of financial
institutions, including savings and loan associations, in preventing the use of the
U.S. financial system to fund terrorist activities. Among other provisions, it
requires financial institutions operating in the United States to develop new
anti-money laundering compliance programs, due diligence policies and controls to
ensure the detection and reporting of money laundering. Such required compliance
programs are intended to supplement existing compliance requirements, also applicable
to financial institutions, under the Bank Secrecy Act and the Office of Foreign Assets
Control Regulations; and
•
The Gramm-Leach-Bliley Act places limitations on the sharing of consumer financial
information with unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act
requires all financial institutions offering financial products or services to retail
customers to provide such customers with the financial institution's privacy policy and
provide such customers the opportunity to "opt out" of the sharing of personal
financial information with unaffiliated third parties.
Federal Reserve System
The Federal Reserve Board regulations require savings institutions to maintain non-interest
earning reserves against their transaction accounts (primarily Negotiable Order of Withdrawal
("NOW") and regular checking accounts). The regulations generally provide that reserves be
maintained against aggregate transaction accounts as follows: a 3% reserve ratio is assessed on net
transaction accounts up to and including $44.3 million; a 10% reserve ratio is applied above $44.3
million. The first $10.3 million of otherwise reservable balances (subject to adjustments by the
Federal Reserve Board) are exempted from the reserve requirements. The amounts are adjusted
annually. Athens Federal Community Bank complies with the foregoing requirements.
Holding Company Regulation
General.
Athens Bancshares Corporation will be a unitary savings and loan holding company
within the meaning of federal law. The Gramm-Leach-Bliley Act of 1999 provided that no company may
acquire control of a savings institution after May 4, 1999 unless it engages only in the financial
activities permitted for financial holding companies under the law or for multiple savings and loan
holding companies as described below. Further, the Gramm-Leach-Bliley Act specifies that existing
savings and loan holding companies may only engage in such activities. Upon any non-supervisory
acquisition by Athens Bancshares Corporation of another savings institution or savings bank that
meets the qualified thrift lender test and is deemed to be a savings institution by the Office of
90
Table of Contents
Thrift Supervision, Athens Bancshares Corporation would become a multiple savings and loan holding
company (if the acquired institution is held as a separate subsidiary) and would generally be
limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank
Holding Company Act, subject to the prior approval of the Office of Thrift Supervision, and certain
activities authorized by Office of Thrift Supervision regulation. However, the Office of Thrift
Supervision has issued an interpretation concluding that multiple savings and loan holding
companies may also engage in activities permitted for financial holding companies.
A savings and loan holding company is prohibited from, directly or indirectly, acquiring more
than 5% of the voting stock of another savings institution or savings and loan holding company,
without prior written approval of the Office of Thrift Supervision, and from acquiring or retaining
control of a depository institution that is not insured by the Federal Deposit Insurance
Corporation. In evaluating applications by holding companies to acquire savings institutions, the
Office of Thrift Supervision considers the financial and managerial resources and future prospects
of the company and institution involved, the effect of the acquisition on the risk to the deposit
insurance funds, the convenience and needs of the community and competitive factors.
The Office of Thrift Supervision may not approve any acquisition that would result in a
multiple savings and loan holding company controlling savings institutions in more than one state,
subject to two exceptions: (i) the approval of interstate supervisory acquisitions by savings and
loan holding companies; and (ii) the acquisition of a savings institution in another state if the
laws of the state target savings institution specifically permit such acquisitions. The states
vary in the extent to which they permit interstate savings and loan holding company acquisitions.
Although savings and loan holding companies are not currently subject to specific capital
requirements or specific restrictions on the payment of dividends or other capital distributions,
federal regulations do prescribe such restrictions on subsidiary savings institutions as described
below. Athens Federal Community Bank must notify the Office of Thrift Supervision 30 days before
declaring any dividend to Athens Bancshares Corporation. In addition, the financial impact of a
holding company on its subsidiary institution is a matter that is evaluated by the Office of Thrift
Supervision and the agency has authority to order cessation of activities or divestiture of
subsidiaries deemed to pose a threat to the safety and soundness of the institution.
Acquisition of Control.
Under the federal Change in Bank Control Act, a notice must be
submitted to the Office of Thrift Supervision if any person (including a company), or group acting
in concert, seeks to acquire "control" of a savings and loan holding company or savings
association. An acquisition of "control" can occur upon the acquisition of 10% or more of the
voting stock of a savings and loan holding company or savings institution or as otherwise defined
by the Office of Thrift Supervision. Under the Change in Bank Control Act, the Office of Thrift
Supervision has 60 days from the filing of a complete notice to act, taking into consideration
certain factors, including the financial and managerial resources of the acquirer and the
anti-trust effects of the acquisition. Any company that so acquires control would then be subject
to regulation as a savings and loan holding company.
Federal Securities Laws
Athens Bancshares Corporation has filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933 for the registration of the common stock to
be issued in the offering. Upon completion of the offering, Athens Bancshares Corporation's common
stock will be registered with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended. Athens Bancshares Corporation will be subject to the information, proxy
solicitation, insider trading restrictions and other requirements under the Securities Exchange Act
of 1934, as amended.
The registration, under the Securities Act of 1933, as amended, of the shares of common stock
to be issued in the offering does not cover the resale of those shares. Shares of common stock
purchased by persons who are not affiliates of Athens Bancshares Corporation may be resold without
registration. Shares purchased by an affiliate of Athens Bancshares Corporation will be subject to
the resale restrictions of Rule 144 under the Securities Act of 1933, as amended. If Athens
Bancshares Corporation meets the current public information requirements of Rule 144, each
affiliate of Athens Bancshares Corporation that complies with the other conditions of Rule 144,
including those that require the affiliate's sale to be aggregated with those of other persons,
would be able to sell in the public market, without registration, a number of shares not to exceed,
in any three-month period, the greater of 1% of the
91
Table of Contents
outstanding shares of Athens Bancshares Corporation or the average weekly volume of trading in the
shares during the preceding four calendar weeks. In the future, Athens Bancshares Corporation may
permit affiliates to have their shares registered for sale under the Securities Act of 1933, as
amended.
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 addresses, among other issues, corporate governance, auditing
and accounting, executive compensation, and enhanced and timely disclosure of corporate
information. As directed by the Sarbanes-Oxley Act of 2002, Athens Bancshares Corporation's Chief
Executive Officer and Chief Financial Officer each will be required to certify that Athens
Bancshares Corporation's quarterly and annual reports do not contain any untrue statement of a
material fact. The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley
Act of 2002 have several requirements, including having these officers certify that: they are
responsible for establishing, maintaining and regularly evaluating the effectiveness of our
internal controls; they have made certain disclosures to our auditors and the audit committee of
the board of directors about our internal controls; and they have included information in our
quarterly and annual reports about their evaluation and whether there have been significant changes
in our internal controls or in other factors that could significantly affect internal controls.
Athens Bancshares Corporation will be subject to further reporting and audit requirements beginning
with the year ending December 31, 2010 under the requirements of the Sarbanes-Oxley Act. Athens
Bancshares Corporation will prepare policies, procedures and systems designed to comply with these
regulations to ensure compliance with these regulations.
92
Table of Contents
Federal and State Taxation
Federal Income Taxation
General.
We report our income on a fiscal year basis using the accrual method of accounting.
The federal income tax laws apply to us in the same manner as to other corporations with some
exceptions, including particularly our reserve for bad debts discussed below. The following
discussion of tax matters is intended only as a summary and does not purport to be a comprehensive
description of the tax rules applicable to us. Our federal income tax returns have not been
audited during the last five years. For its 2008 fiscal year, Athens Federal Community Bank's
maximum federal income tax rate was 34.0%.
Athens Bancshares Corporation and Athens Federal Community Bank will enter into a tax
allocation agreement. Because Athens Bancshares Corporation will own 100% of the issued and
outstanding capital stock of Athens Federal Community Bank after the completion of the conversion,
Athens Bancshares Corporation and Athens Federal Community Bank will be members of an affiliated
group within the meaning of Section 1504(a) of the Internal Revenue Code, of which group Athens
Bancshares Corporation will be the common parent corporation. As a result of this affiliation,
Athens Federal Community Bank may be included in the filing of a consolidated federal income tax
return with Athens Bancshares Corporation and, if a decision to file a consolidated tax return is
made, the parties agree to compensate each other for their individual share of the consolidated tax
liability and/or any tax benefits provided by them in the filing of the consolidated federal income
tax return.
Bad Debt Reserves.
For fiscal years beginning before June 30, 1996, thrift institutions that
qualified under certain definitional tests and other conditions of the Internal Revenue Code were
permitted to use certain favorable provisions to calculate their deductions from taxable income for
annual additions to their bad debt reserve. A reserve could be established for bad debts on
qualifying real property loans, generally secured by interests in real property improved or to be
improved, under the percentage of taxable income method or the experience method. The reserve for
nonqualifying loans was computed using the experience method. Federal legislation enacted in 1996
repealed the reserve method of accounting for bad debts and the percentage of taxable income method
for tax years beginning after 1995 and require savings institutions to recapture or take into
income certain portions of their accumulated bad debt reserves.
Distributions.
If Athens Federal Community Bank makes "non-dividend distributions" to Athens
Bancshares Corporation, the distributions will be considered to have been made from Athens Federal
Community Bank's unrecaptured tax bad debt reserves, including the balance of its reserves as of
December 31, 1987, to the extent of the "non-dividend distributions," and then from Athens Federal
Community Bank's supplemental reserve for losses on loans, to the extent of those reserves, and an
amount based on the amount distributed, but not more than the amount of those reserves, will be
included in Athens Federal Community Bank's taxable income. Non-dividend distributions include
distributions in excess of Athens Federal Community Bank's current and accumulated earnings and
profits, as calculated for federal income tax purposes, distributions in redemption of stock, and
distributions in partial or complete liquidation. Dividends paid out of Athens Federal Community
Bank's current or accumulated earnings and profits will not be so included in Athens Federal
Community Bank's taxable income.
The amount of additional taxable income triggered by a non-dividend is an amount that, when
reduced by the tax attributable to the income, is equal to the amount of the distribution.
Therefore, if Athens Federal Community Bank makes a non-dividend distribution to Athens Bancshares
Corporation, approximately one and one-half times the amount of the distribution not in excess of
the amount of the reserves would be includable in income for federal income tax purposes, assuming
a 34.0% federal corporate income tax rate. Athens Federal Community Bank does not intend to pay
dividends that would result in a recapture of any portion of its bad debt reserves.
93
Table of Contents
State Taxation
Tennessee.
Tennessee imposes franchise and excise taxes. The franchise tax ($0.25 per $100)
is applied either to apportioned net income or the value of property owned and used in Tennessee,
whichever is greater, as of the close of the fiscal year. The excise tax (6.5%) is applied to net
earnings derived from business transacted in Tennessee. Under Tennessee regulations, bad debt
deductions are deductible from the excise tax. There have not been any audits of our state tax
returns during the past five years.
Any cash dividends, in excess of a certain exempt amount, that would be paid with respect to
Athens Bancshares Corporation common stock to a shareholder (including a partnership and certain
other entities) who is a resident of Tennessee will be subject to the Tennessee income tax (6%).
Any distribution by a corporation from earnings according to percentage ownership is considered a
dividend, and the definition of a dividend for Tennessee income tax purposes may not be the same as
the definition of a dividend for federal income tax purposes. A corporate distribution may be
treated as a dividend for Tennessee tax purposes if it is paid from funds that exceed the
corporation's earned surplus and profits under certain circumstances.
94
Table of Contents
The Conversion and Stock Offering
Athens Federal Community Bank's board of directors has approved the plan of conversion. The
Office of Thrift Supervision also has conditionally approved the plan of conversion, but its
approval does not constitute a recommendation or endorsement of the plan of conversion by the
agency.
General
On July 15, 2009, the board of directors of Athens Federal Community Bank unanimously adopted
the plan of conversion according to which Athens Federal Community Bank will convert from a
federally chartered mutual savings bank to a federally chartered stock savings bank and become a
wholly owned subsidiary of Athens Bancshares Corporation, a newly formed Tennessee corporation.
Athens Bancshares Corporation will offer 100% of its common stock to qualifying depositors of
Athens Federal Community Bank in a subscription offering and, if necessary, to members of the
general public through a community offering and/or a syndicate of registered broker-dealers. The
completion of the offering depends on market conditions and other factors beyond our control. We
can give no assurance as to the length of time that will be required to complete the sale of the
common stock. If we experience delays, significant changes may occur in the appraisal of Athens
Federal Community Bank, which would require a change in the offering range. A change in the
offering range would result in a change in the net proceeds realized by Athens Bancshares
Corporation from the sale of the common stock. If the offering is terminated, Athens Federal
Community Bank would be required to charge all offering expenses against current income. The
Office of Thrift Supervision approved our plan of conversion, subject to the fulfillment of certain
conditions.
The plan of conversion and stock offering also provides for the establishment of the Athens
Federal Foundation and the funding of the foundation with 100,000 shares of Athens Bancshares
Corporation common stock and $100,000 in cash. The establishment of the Athens Federal Foundation
is subject to a separate vote of Athens Federal Community Bank's members. The special meeting of
Athens Federal Community Bank's members has been called for this purpose on
.
The following is a brief summary of the pertinent aspects of the conversion. A copy of the
plan of conversion is available from Athens Federal Community Bank upon request and is available
for inspection at the offices of Athens Federal Community Bank and at the Office of Thrift
Supervision. The plan of conversion is also filed as an exhibit to the registration statement that
we have filed with the Securities and Exchange Commission. See
"Where You Can Find More
Information."
Reasons for the Conversion
The primary reasons for the conversion and related stock offering are to:
•
increase the capital of Athens Federal Community Bank to support future lending and
operational growth;
•
enhance profitability and earnings through reinvesting and leveraging the proceeds,
primarily through traditional funding and lending activities;
•
support future branching activities and/or the acquisition of financial services
companies;
•
implement equity compensation plans to retain and attract qualified directors,
officers and staff to enhance the current incentive-based compensation program; and
•
increase our philanthropic endeavors to the communities we serve through the
formation and funding of the Athens Federal Foundation.
As a stock holding company, Athens Bancshares Corporation will have greater flexibility than
Athens Federal Community Bank now has in structuring mergers and acquisitions, including the
consideration paid in a transaction. Our current mutual savings bank structure, by its nature,
limits our ability to offer any common stock as
95
Table of Contents
consideration in a merger or acquisition. Our new stock holding company structure will enhance our
ability to compete with other bidders when acquisition opportunities arise by better enabling us to
offer stock or cash consideration, or a combination of the two. We currently do not have any
agreement or understanding as to any specific acquisition.
Effects of Conversion to Stock Form
General.
Each depositor in a mutual savings bank has both a deposit account in the
institution and a pro rata ownership interest in the net worth of the institution based upon the
balance in his or her account. However, this ownership interest is tied to the depositor's account
and has no value separate from such deposit account. Furthermore, this ownership interest may only
be realized in the unlikely event that the institution is liquidated. In such event, the
depositors of record at that time, as owners, would be able to share in any residual surplus and
reserves after payment of other claims, including claims of depositors to the amounts of their
deposits. Any depositor who opens a deposit account obtains a pro rata ownership interest in the
net worth of the institution without any additional payment beyond the amount of the deposit. A
depositor who reduces or closes his or her account receives a portion or all of the balance in the
account but nothing for his or her ownership interest in the net worth of the institution, which is
lost to the extent that the balance in the account is reduced.
When a mutual savings bank converts to stock form, depositors lose all rights to the net worth
of the mutual savings bank, except the right to claim a pro rata share of funds representing the
liquidation account established in connection with the conversion. Additionally, permanent
nonwithdrawable capital stock is created and offered to depositors which represents the ownership
of the institution's net worth. The common stock of Athens Bancshares Corporation is separate and
apart from deposit accounts and cannot be and is not insured by the Federal Deposit Insurance
Corporation or any other governmental agency. Certificates are issued to evidence ownership of the
permanent stock. The stock certificates are transferable, and therefore the stock may be sold or
traded if a purchaser is available with no effect on any deposit account the seller may hold in the
institution.
No assets of Athens Bancshares Corporation will be distributed in connection with the
conversion other than the payment of those expenses incurred in connection with the conversion.
Continuity.
While the conversion is being accomplished, the normal business of Athens Federal
Community Bank will continue without interruption, including being regulated by the Office of
Thrift Supervision and the Federal Deposit Insurance Corporation. After the conversion, Athens
Federal Community Bank will continue to provide services for depositors and borrowers under current
policies by its present management and staff.
The directors of Athens Federal Community Bank at the time of the conversion will serve as
directors of Athens Federal Community Bank after the conversion. The initial directors of Athens
Bancshares Corporation are composed of the individuals who serve on the board of directors of
Athens Federal Community Bank. All officers of Athens Federal Community Bank at the time of
conversion will retain their positions after the conversion.
Deposit Accounts and Loans.
Athens Federal Community Bank's deposit accounts, account
balances and existing Federal Deposit Insurance Corporation insurance coverage of deposit accounts
will not be affected by the conversion. Furthermore, the conversion will not affect the loan
accounts, loan balances or obligations of borrowers under their individual contractual arrangements
with Athens Federal Community Bank.
Effect on Voting Rights.
Voting rights in Athens Federal Community Bank, as a mutual savings
bank, belong to its depositor and borrower members. After the conversion, depositors will no
longer have voting rights in Athens Federal Community Bank and, therefore, will no longer be able
to elect directors of Athens Federal Community Bank or control its affairs. Instead, Athens
Bancshares Corporation, as the sole shareholder of Athens Federal Community Bank, will possess all
voting rights in Athens Federal Community Bank. The holders of the common stock of Athens
Bancshares Corporation will possess all voting rights in Athens Bancshares Corporation. Depositors
and borrowers of Athens Federal Community Bank will not have voting rights after the conversion
except to the extent that they become shareholders of Athens Bancshares Corporation by purchasing
common stock.
96
Table of Contents
Liquidation Account.
In the unlikely event of a complete liquidation of Athens Federal
Community Bank before the conversion, each depositor in Athens Federal Community Bank would receive
a pro rata share of any assets of Athens Federal Community Bank remaining after payment of claims
of all creditors, including the claims of all depositors up to the withdrawal value of their
accounts. Each depositor would receive a pro rata share of the remaining assets in the same
proportion as the value of his or her deposit account to the total value of all deposit accounts in
Athens Federal Community Bank at the time of liquidation.
After the conversion, holders of withdrawable deposits in Athens Federal Community Bank,
including certificates of deposit, will not be entitled to share in any residual assets upon
liquidation of Athens Federal Community Bank. However, under applicable regulations, Athens
Federal Community Bank will, at the time of the conversion, establish a liquidation account in an
amount equal to its total equity as of the date of the latest statement of financial condition
contained in the final prospectus relating to the conversion.
Athens Federal Community Bank will maintain the liquidation account after the conversion for
the benefit of eligible account holders and supplemental eligible account holders who retain their
savings accounts in Athens Federal Community Bank. Each eligible account holder and supplemental
account holder will, with respect to each deposit account held, have a related inchoate interest in
a sub-account portion of the liquidation account balance.
The initial sub-account balance for a savings account held by an eligible account holder or a
supplemental eligible account holder will be determined by multiplying the opening balance in the
liquidation account by a fraction of which the numerator is the amount of the holder's "qualifying
deposit" in the deposit account and the denominator is the total amount of the "qualifying
deposits" of all eligible or supplemental eligible account holders. The initial subaccount balance
will not be increased, but it will be decreased as provided below.
If the deposit balance in any deposit account of an eligible account holder or supplemental
eligible account holder at the close of business on any annual closing day of Athens Federal
Community Bank (which is December 31) after March 31, 2008 or September 30, 2009, is less than the
lesser of the deposit balance in a deposit account at the close of business on any other annual
closing date after March 31, 2008 or September 30, 2009, or the amount of the "qualifying deposit"
in a savings account on March 31, 2008 or September 30, 2009, then the subaccount balance for a
savings account will be adjusted by reducing the subaccount balance in an amount proportionate to
the reduction in the savings balance. Once reduced, the subaccount balance will not be
subsequently increased, notwithstanding any increase in the savings balance of the related savings
account. If any savings account is closed, the related subaccount balance will be reduced to zero.
Upon a complete liquidation of Athens Federal Community Bank, each eligible account holder and
supplemental account holder will be entitled to receive a liquidation distribution from the
liquidation account in the amount of the then current adjusted subaccount balance(s) for deposit
account(s) held by the holder before any liquidation distribution may be made to shareholders. No
merger, consolidation, bulk purchase of assets with assumptions of savings accounts and other
liabilities or similar transactions with another federally insured institution in which Athens
Federal Community Bank is not the surviving institution will be considered to be a complete
liquidation. In any of these transactions, the liquidation account will be assumed by the
surviving institution.
In the unlikely event Athens Federal Community Bank is liquidated after the conversion,
depositors will be entitled to full payment of their deposit accounts before any payment is made to
Athens Bancshares Corporation as sole shareholder of Athens Federal Community Bank. There are no
plans to liquidate either Athens Federal Community Bank or Athens Bancshares Corporation in the
future.
Material Income Tax Consequences
In connection with the conversion, we have received an opinion of counsel with respect to
federal tax laws that no gain or loss will be recognized by account holders receiving subscription
rights, except to the extent, if any, that subscription rights are deemed to have fair market value
on the date such rights are issued. We believe that the tax opinion summarized below addresses all
material federal income tax consequences that are generally applicable to persons receiving
subscription rights.
97
Table of Contents
Kilpatrick Stockton LLP has issued an opinion to us that, for federal income tax purposes:
•
the conversion of Athens Federal Community Bank from the mutual to the stock form of
organization will qualify as a reorganization within the meaning of Section
368(a)(1)(F) of the Internal Revenue Code, and no gain or loss will be recognized by
account holders and no gain or loss will be recognized by Athens Federal Community Bank
by reason of such conversion;
•
no gain or loss will be recognized by Athens Bancshares Corporation upon the sale of
shares of common stock in the offering;
•
it is more likely than not that the fair market value of the non-transferable
subscription rights to purchase shares of common stock of Athens Bancshares Corporation
to be issued to eligible account holders, supplemental eligible account holders and
other members is zero and, accordingly, that no income will be realized by eligible
account holders, supplemental eligible account holders and other members upon the
issuance to them of the subscription rights or upon the exercise of the subscription
rights; and
•
it is more likely than not that the tax basis to the holders of shares of common
stock purchased in the stock offering pursuant to the exercise of the subscription
rights will be the amount paid therefor, and that the holding period for such shares of
common stock will begin on the date of completion of the stock offering.
The statements set forth in the first and second bullet points above are based on the position
that the subscription rights do not have any market value at the time of distribution or at the
time they are exercised. Whether subscription rights have a market value for federal income tax
purposes is a question of fact, depending upon all relevant facts and circumstances. According to
our counsel, the Internal Revenue Service will not issue rulings on whether subscription rights
have a market value. Counsel has also advised us that they are unaware of any instance in which
the Internal Revenue Service has taken the position that nontransferable subscription rights have a
market value. Counsel also noted that the subscription rights will be granted at no cost to the
recipients, will be nontransferable and of short duration, and will afford the recipients the right
only to purchase our common stock at a price equal to its estimated fair market value, which will
be the same price as the purchase price for the unsubscribed shares of common stock.
Unlike a private letter ruling issued by the Internal Revenue Service, an opinion of counsel
is not binding on the Internal Revenue Service and the Internal Revenue Service could disagree with
the conclusions reached in the opinion. If there is a disagreement, no assurance can be given that
the conclusions reached in an opinion of counsel would be sustained by a court if contested by the
Internal Revenue Service.
Athens Federal Community Bank has also received an opinion from Hazlett, Lewis & Bieter, PLLC,
that, assuming the conversion does not result in any federal income tax liability to Athens Federal
Community Bank, its account holders, or Athens Bancshares Corporation, implementation of the plan
of conversion will not result in any Tennessee income tax liability to those entities or persons.
The opinions of Kilpatrick Stockton LLP and of Hazlett, Lewis & Bieter, PLLC are filed as
exhibits to the registration statement that we have filed with the Securities and Exchange
Commission. See
"Where You Can Find More Information."
Subscription Offering and Subscription Rights
Under the plan of conversion, we have granted rights to subscribe for Athens Bancshares
Corporation common stock to the following persons in the following order of priority:
•
Persons with deposits in Athens Federal Community Bank with balances aggregating $50
or more ("qualifying deposits") as of the close of business on March 31, 2008
("eligible account holders"). For this purpose, deposit accounts include all savings,
time and demand accounts.
98
Table of Contents
•
Our employee stock ownership plan.
•
Persons with qualifying deposits in Athens Federal Community Bank as of the close of
business on September 30, 2009 ("supplemental eligible account holders") other than our
officers and directors and their associates.
•
Depositors of Athens Federal Community Bank as of the close of business on
, who are neither eligible nor supplemental eligible account holders, and
borrowers of Athens Federal Community Bank as of May 1, 1999 whose borrowings still
exist as of the close of business on
(collectively, "other members").
The amount of common stock that any person may purchase will depend on the availability of the
common stock after satisfaction of all subscriptions having priority rights in the subscription
offering and to the maximum and minimum purchase limitations set forth in the plan of conversion.
See
"— Limitations on Purchases of Shares."
All persons on a joint account will be counted as a
single depositor for purposes of determining the maximum amount that may be subscribed for by
owners of a joint account.
We will strive to identify your ownership in all accounts, but cannot guarantee we will
identify all accounts in which you have an ownership interest.
Category 1: Eligible Account Holders.
Subject to the purchase limitations as described below
under
"— Limitations on Purchases of Shares,"
each eligible account holder has the right to
subscribe for up to the greater of:
•
$300,000 of common stock (which equals 30,000 shares);
•
one-tenth of 1% of the total offering of common stock; or
•
15 times the product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be sold by a fraction of which the
numerator is the amount of qualifying deposits of the eligible account holder and the
denominator is the total amount of qualifying deposits of all eligible account holders.
If there are insufficient shares to satisfy all subscriptions by eligible account holders,
shares first will be allocated so as to permit each subscribing eligible account holder, if
possible, to purchase a number of shares sufficient to make the person's total allocation equal 100
shares or the number of shares actually subscribed for, whichever is less. After that, unallocated
shares will be allocated among the remaining subscribing eligible account holders whose
subscriptions remain unfilled in the proportion that the amounts of their respective qualifying
deposits bear to the total qualifying deposits of all remaining eligible account holders whose
subscriptions remain unfilled. Unless waived by the Office of Thrift Supervision, subscription
rights of eligible account holders who are also executive officers or directors of Athens Federal
Community Bank or their associates will be subordinated to the subscription rights of other
eligible account holders to the extent attributable to increased deposits in Athens Federal
Community Bank in the one year period preceding March 31, 2008.
To ensure a proper allocation of stock, each eligible account holder must list on his or her
stock order form all deposit accounts in which such eligible account holder had an ownership
interest at March 31, 2008. Failure to list an account, or providing incorrect information, could
result in the loss of all or part of a subscriber's stock allocation.
Category 2: Tax-Qualified Employee Benefit Plans.
Our tax-qualified employee benefit plans
have the right to purchase up to 10% of the shares of common stock sold in the offering and
contributed to the charitable foundation. As a tax-qualified employee benefit plan, our employee
stock ownership plan intends to purchase a number of shares equal to 8% of the sum of the shares
sold in the offering and contributed to the charitable foundation. Subscriptions by the employee
stock ownership plan will not be aggregated with shares of common stock purchased by any other
participants in the offering, including subscriptions by our officers and directors, for
99
Table of Contents
the purpose of applying the purchase limitations in the plan of conversion. If eligible account
holders subscribe for all of the shares being sold, no shares will be available for our
tax-qualified employee benefit plans. However, if we increase the number of shares offered above
the maximum of the offering range, the employee stock ownership plan will have a first priority
right to purchase any shares exceeding that amount up to 10% of the sum of the common stock issued
in the offering and contributed to the charitable foundation. If the plan's subscription is not
filled in its entirety, the employee stock ownership plan may purchase shares in the open market or
may purchase shares directly from us with the approval of the Office of Thrift Supervision.
Category 3: Supplemental Eligible Account Holders.
Subject to the purchase limitations as
described below under
"— Limitations on Purchases of Shares,"
each supplemental eligible account
holder has the right to subscribe for up to the greater of:
•
$300,000 of common stock (which equals 30,000 shares);
•
one-tenth of 1% of the total offering of common stock; or
•
15 times the product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be sold by a fraction of which the
numerator is the amount of qualifying deposits of the supplemental eligible account
holder and the denominator is the total amount of qualifying deposits of all
supplemental eligible account holders.
If eligible account holders and the employee stock ownership plan subscribe for all of the
shares being sold, no shares will be available for supplemental eligible account holders. If
shares are available for supplemental eligible account holders but there are insufficient shares to
satisfy all subscriptions by supplemental eligible account holders, shares first will be allocated
so as to permit each subscribing supplemental eligible account holder, if possible, to purchase a
number of shares sufficient to make the person's total allocation equal 100 shares or the number of
shares actually subscribed for, whichever is less. After that, unallocated shares will be
allocated among the remaining subscribing supplemental eligible account holders whose subscriptions
remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to
the total qualifying deposits of all remaining supplemental eligible account holders whose
subscriptions remain unfilled.
To ensure a proper allocation of stock, each supplemental eligible account holder must list on
his or her stock order form all deposit accounts in which such supplemental eligible account holder
had an ownership interest at September 30, 2009. Failure to list an account, or providing
incorrect information, could result in the loss of all or part of a subscriber's stock allocation.
Category 4: Other Members.
Subject to the purchase limitations as described below under
"
—
Limitations on Purchases of Shares,"
each other member has the right to purchase up to the
greater of $300,000 of common stock (which equals 30,000 shares) or one-tenth of 1% of the total
offering of common stock. If eligible account holders, the employee stock ownership plan and
supplemental eligible account holders subscribe for all of the shares being sold, no shares will be
available for other members. If shares are available for other members but there are not
sufficient shares to satisfy all subscriptions by other members, shares first will be allocated so
as to permit each subscribing other member, if possible, to purchase a number of shares sufficient
to make the person's total allocation equal 100 shares or the number of shares actually subscribed
for, whichever is less. After that, unallocated shares will be allocated among the remaining
subscribing other members in the proportion that each other member's subscription bears to the
total subscriptions of all such subscribing other members whose subscriptions remain unfilled.
To ensure a proper allocation of stock, each other member must list on his or her stock order
form all deposit accounts in which such other member had an ownership interest at
.
Failure to list an account or providing incorrect information could result in the loss of all or
part of a subscriber's stock allocation.
Expiration Date for the Subscription Offering.
The subscription offering, and all
subscription rights under the plan of conversion, will terminate at
___:___ p.m., Eastern time, on
. We will not accept orders for common stock in the subscription offering received
after that time. We will make reasonable attempts to provide a prospectus and related offering
materials to holders of subscription rights; however, all subscription rights
100
Table of Contents
will expire on the expiration date whether or not we have been able to locate each person entitled
to subscription rights.
Office of Thrift Supervision regulations require that we complete the sale of common stock
within 45 days after the close of the subscription offering. If the sale of the common stock is
not completed within that period, all funds received will be returned promptly with interest at our
passbook rate and all withdrawal authorizations will be canceled unless we receive approval of the
Office of Thrift Supervision to extend the time for completing the offering. If regulatory
approval of an extension of the time period has been granted, we will notify all subscribers of the
extension and of the duration of any extension that has been granted, and subscribers will have the
right to modify or rescind their purchase orders. If we do not receive an affirmative response
from a subscriber to any resolicitation, the subscriber's order will be rescinded and all funds
received will be returned promptly with interest, or withdrawal authorizations will be canceled.
No single extension can exceed 90 days.
Persons in Non-Qualified States.
We will make reasonable efforts to comply with the
securities laws of all states in the United States in which persons entitled to subscribe for stock
under the plan of conversion reside. However, we are not required to offer stock in the
subscription offering to any person who resides in a foreign country or who resides in a state of
the United States in which (1) only a small number of persons otherwise eligible to subscribe for
shares of common stock reside; (2) the granting of subscription rights or the offer or sale of
shares to such person would require that we or our officers or directors register as a broker,
dealer, salesman or selling agent under the securities laws of the state, or register or otherwise
qualify the subscription rights or common stock for sale or qualify as a foreign corporation or
file a consent to service of process; or (3) we determine that compliance with that state's
securities laws would be impracticable for reasons of cost or otherwise.
Restrictions on Transfer of Subscription Rights and Shares.
Subscription rights are
nontransferable. You may not transfer, or enter into any agreement or understanding to transfer,
the legal or beneficial ownership of your subscription rights issued under the plan of conversion
or the shares of common stock to be issued upon exercise of your subscription rights. Your
subscription rights may be exercised only by you and only for your own account. If you exercise
your subscription rights, you will be required to certify that you are purchasing shares solely for
your own account and that you have no agreement or understanding regarding the sale or transfer of
such shares. Federal regulations also prohibit any person from offering, or making an announcement
of an offer or intent to make an offer, to purchase such subscription rights or shares of common
stock before the completion of the offering.
If you sell or otherwise transfer your rights to subscribe for common stock in the
subscription offering or subscribe for common stock on behalf of another person, you may forfeit
those rights and face possible further sanctions and penalties imposed by the Office of Thrift
Supervision or another agency of the U.S. Government. We will pursue any and all legal and
equitable remedies if we become aware of the transfer of subscription rights and will not honor
orders known by us to involve the transfer of such rights.
Community Offering
To the extent that shares remain available for purchase after satisfaction of all
subscriptions received in the subscription offering, we may offer shares in a community offering to
the following persons in the following order of priority:
•
Natural persons and trusts of natural persons who are residents of Blount, Bradley,
Hamilton, Knox, Loudon, McMinn, Meigs, Monroe and Polk Counties in Tennessee; and
•
Other persons to whom we deliver a prospectus.
We will consider persons to be residents of the above listed counties if they occupy a
dwelling in the county and have established an ongoing physical presence in the county that is not
merely transitory in nature. We may utilize depositor or loan records or other evidence provided
to us to make a determination as to whether a person is a resident of such counties. In all cases,
the determination of residence status will be made by us in our sole discretion.
101
Table of Contents
Purchasers in the community offering are eligible to purchase up to $300,000 of common stock
(which equals 30,000 shares). If shares are available for preferred subscribers in the community
offering but there are insufficient shares to satisfy all orders, the available shares will be
allocated first to each preferred subscriber whose order we accept in an amount equal to the lesser
of 100 shares or the number of shares ordered by each such subscriber, if possible. After that,
unallocated shares will be allocated among the remaining preferred subscribers whose orders remain
unsatisfied in the same proportion that the unfilled order of each such subscriber bears to the
total unfilled orders of all such subscribers. If, after filling the orders of preferred
subscribers in the community offering, shares are available for other subscribers in the community
offering but there are insufficient shares to satisfy all orders, shares will be allocated in the
same manner as for preferred subscribers.
The community offering, if held, may commence concurrently with, during or after the
subscription offering and will terminate no later than 45 days after the close of the subscription
offering unless extended by us, with approval of the Office of Thrift Supervision. If we receive
regulatory approval for an extension, all subscribers will be notified of the extension and of the
duration of any extension that has been granted, and will have the right to confirm, increase,
decrease or rescind their orders. If we do not receive an affirmative response from a subscriber to
any resolicitation, the subscriber's order will be rescinded and all funds received will be
promptly returned with interest.
The opportunity to subscribe for shares of common stock in the community offering is subject
to our right to reject orders, in whole or part, either at the time of receipt of an order or as
soon as practicable following the expiration date of the offering. If your order is rejected in
part, you will not have the right to cancel the remainder of your order.
Syndicated Community Offering or Underwritten Public Offering
The plan of conversion provides that, if necessary, all shares of common stock not purchased
in the subscription offering and community offering may be offered for sale to the general public
in a syndicated community offering to be managed by Keefe, Bruyette & Woods, Inc., acting as our
agent. In such capacity, Keefe, Bruyette & Woods, Inc. may form a syndicate of other
brokers-dealers who are member firms of the Financial Industry Regulatory Authority (formerly known
as the National Association of Securities Dealers, Inc.) ("FINRA"). Alternatively, we may sell any
remaining shares in an underwritten public offering. Neither Keefe, Bruyette & Woods, Inc. nor any
registered broker-dealer will have any obligation to take or purchase any shares of the common
stock in the syndicated community offering; however, Keefe, Bruyette & Woods, Inc. has agreed to
use its best efforts in the sale of shares in any syndicated community offering. We have not
selected any particular broker-dealers to participate in a syndicated community offering and will
not do so until before the commencement of the syndicated community offering. The syndicated
community offering would terminate no later than 45 days after the expiration of the subscription
offering, unless extended by us, with approval of the Office of Thrift Supervision. See
"—
Community Offering"
above for a discussion of rights of subscribers if an extension is granted.
The opportunity to subscribe for shares of common stock in the syndicated community offering
or underwritten public offering is subject to our right in our sole discretion to accept or reject
orders, in whole or part, either at the time of receipt of an order or as soon as practicable
following the expiration date of the offering. If your order is rejected in part, you will not have
the right to cancel the remainder of your order.
Common stock sold in the syndicated community offering also will be sold at the $10.00 per
share purchase price. Purchasers in the syndicated community offering are eligible to purchase up
to $300,000 of common stock (which equals 30,000 shares). Orders for common stock in the syndicated
community offering will be filled first to a maximum of 2% of the total number of shares sold in
the offering and thereafter any remaining shares will be allocated on an equal number of shares
basis per order until all orders have been filled. However, no fractional shares will be issued. We
may begin the syndicated community offering or underwritten public offering at any time following
the commencement of the subscription offering.
Selected dealers, if any, will send confirmations of the orders to customers on the next
business day after the order date. Selected dealers will debit the accounts of their customers on
the settlement date, which date will be three business days from the order date. Customers who
authorize selected dealers to debit their brokerage accounts are required to have the funds for
payment in their account on but not before the settlement date. On the settlement
102
Table of Contents
date, selected dealers will deposit funds to the account established at Athens Federal Community
Bank for each selected dealer. Each customer's funds forwarded to one of these accounts, along
with all other accounts held in the same title, will be insured by the Federal Deposit Insurance
Corporation in accordance with applicable regulations. After payment has been received by us from
selected dealers, funds will earn interest at Athens Federal Community Bank's regular savings rate
until the completion or termination of the offering. Funds will be promptly returned, with
interest, if the syndicated community offering is not completed. Keefe, Bruyette & Woods, Inc.
shall also have the right, in its sole discretion, to permit investors to submit irrevocable orders
together with legally binding commitments for payment for shares for which they subscribe at any
time before the closing of the offering.
If we are unable to find purchasers from the general public for all unsubscribed shares, we
will make other purchase arrangements, if feasible. Other purchase arrangements must be approved by
the Office of Thrift Supervision and may provide for purchases for investment purposes by
directors, officers, their associates and other persons in excess of the limitations provided in
the plan of conversion and in excess of the proposed director and executive officer purchases
discussed earlier, although no such purchases are currently intended. If other purchase
arrangements cannot be made, we may: terminate the stock offering and promptly return all funds;
promptly return all funds, set a new offering range and give all subscribers the opportunity to
place a new order for shares of Athens Bancshares Corporation common stock; or take such other
actions as may be permitted by the Office of Thrift Supervision and the Securities and Exchange
Commission.
Limitations on Purchases of Shares
In addition to the purchase limitations described above under
"Subscription Offering and
Subscription Rights," "— Community Offering"
and
"Syndicated Community Offering or Underwritten
Public Offering,"
the plan of conversion provides for the following purchase limitations:
•
Except for our tax-qualified employee benefit plans, no individual may purchase in
the aggregate more than $300,000 of the common stock, or 30,000 shares sold in the
offering, subject to increase as described below. In addition, no person, either alone
or together with associates of or persons acting in concert with such person, may
purchase more than $500,000 of the common stock, or 50,000 shares sold in the offering.
•
Our tax-qualified employee benefit plans are entitled to purchase up to 10.0% of the
shares sold in the conversion and contributed to the charitable foundation. As a tax-
qualified employee benefit plan, our employee stock ownership plan intends to purchase
8.0% of the sum of the shares sold in the offering and contributed to the charitable
foundation.
•
Each subscriber must subscribe for a minimum of 25 shares.
•
Our directors and executive officers, together with their associates, may purchase
in the aggregate up to 31% of the common stock sold in the offering.
We may, in our sole discretion, increase the individual or aggregate purchase limitation to up
to 5% of the shares of common stock sold in the offering. We do not intend to increase the maximum
purchase limitation unless market conditions warrant. If we decide to increase the purchase
limitations, persons who subscribed for the maximum number of shares of common stock will be given
the opportunity to increase their subscriptions accordingly, subject to the rights and preferences
of any person who has priority subscription rights. We, in our discretion, also may give other
large subscribers the right to increase their subscriptions.
If we increase the maximum purchase limitation to 5% of the shares of common stock sold in the
offering, we may further increase the maximum purchase limitation to 9.99%, provided that orders
for common stock exceeding 5% of the shares of common stock sold in the offering may not exceed in
the aggregate 10% of the total shares of common stock sold in the offering.
The plan of conversion defines "acting in concert" to mean knowing participation in a joint
activity or interdependent conscious parallel action towards a common goal whether or not by an
express agreement or understanding; or a combination or pooling of voting or other interests in the securities of an
issuer for a common
103
Table of Contents
purpose under any contract, understanding, relationship, agreement or other
arrangement, whether written or otherwise. In general, a person who acts in concert with another
party will also be deemed to be acting in concert with any person who is also acting in concert
with that other party. We may presume that certain persons are acting in concert based upon, among
other things, joint account relationships or the fact that persons share a common address (whether
or not related by blood or marriage) or may have filed joint Schedules 13D or 13G with the
Securities and Exchange Commission with respect to other companies. For purposes of the plan of
conversion, our directors are not deemed to be acting in concert solely by reason of their Board
membership.
The plan of conversion defines "associate," with respect to a particular person, to mean:
•
a corporation or organization other than Athens Bancshares Corporation or Athens
Federal Community Bank or a majority-owned subsidiary of Athens Bancshares Corporation
or Athens Federal Community Bank of which a person is a senior officer or partner or
is, directly or indirectly, the beneficial owner of 10% or more of any class of equity
securities of such corporation or organization;
•
a trust or other estate in which a person has a substantial beneficial interest or
as to which a person serves as a trustee or a fiduciary; and
•
any person who is related by blood or marriage to such person and who lives in the
same home as such person or who is a director or senior officer of Athens Bancshares
Corporation or Athens Federal Community Bank or any of their subsidiaries.
For example, a corporation of which a person serves as an officer would be an associate of
that person and, therefore, all shares purchased by the corporation would be included with the
number of shares that the person could purchase individually under the aggregate purchase
limitation described above. We have the right in our sole discretion to reject any order submitted
by a person whose representations we believe to be false or who we otherwise believe, either alone
or acting in concert with others, is violating or circumventing, or intends to violate or
circumvent, the terms and conditions of the plan of conversion. Directors and officers are not
treated as associates of each other solely by virtue of holding such positions. We have the sole
discretion to determine whether prospective purchasers are "associates" or "acting in concert."
Marketing Arrangements
We have retained Keefe, Bruyette & Woods, Inc. to consult with and advise and assist us, on a
best efforts basis, in the distribution of shares in the offering. Keefe, Bruyette & Woods, Inc. is
a broker-dealer registered with the Securities and Exchange Commission and a member of the FINRA.
Keefe, Bruyette & Woods, Inc. will assist us in the conversion by acting as marketing advisor with
respect to the subscription offering and will represent us as placement agent on a best efforts
basis in the sale of the common stock in the community offering, if held. The services that Keefe,
Bruyette & Woods, Inc. will provide include, but are not limited to:
•
training our employees who will perform ministerial functions in the subscription
offering and community offering regarding the mechanics and regulatory requirements of
the stock offering process;
•
managing the stock information center by assisting interested stock subscribers and
by keeping records of all stock orders;
•
preparing marketing materials; and
•
assisting in the solicitation of proxies from Athens Federal Community Bank's
members for use at the special meeting.
104
Table of Contents
We have also engaged Keefe, Bruyette & Woods, Inc. to act as our conversion agent in
connection with the stock offering. In its role as conversion agent, Keefe, Bruyette & Woods, Inc.
will assist us in the stock offering as follows:
•
develop a master file and consolidation of accounts;
•
generate address lists for the mailing of proxy solicitation and stock offering
materials;
•
provide software for the operation of the stock information center; and
•
subscription order processing and stock allocation services.
For all these services, Keefe, Bruyette & Woods, Inc. will receive a success fee equal to the
greater of: (i) $200,000 or (ii) 1.125% of the aggregate dollar amount of the common stock sold in
the subscription and community offerings to persons other than the employee stock ownership plan
and directors, officers and employees of Athens Federal Community Bank or their immediate families
and shares issued to the charitable foundation. We have paid Keefe, Bruyette & Woods, Inc. a
management fee of $30,000 that will be applied against the success fee. We will reimburse Keefe,
Bruyette & Woods, Inc. for its expenses, including the fees and expenses of its counsel not to
exceed $50,000, associated with its marketing effort. If there is a syndicated community offering,
the total fees paid to Keefe, Bruyette & Woods, Inc. and other FINRA member firms in the syndicated
community offering will not exceed 5.5% of the aggregate dollar amount of the common stock sold in
the syndicated community offering.
Keefe, Bruyette & Woods, Inc. has not prepared any report or opinion constituting a
recommendation or advice to us or to persons who subscribe for stock, nor has it prepared an
opinion as to the fairness to us of the purchase price or the terms of the stock to be sold.
Keefe, Bruyette & Woods, Inc. expresses no opinion as to the prices at which common stock to be
issued may trade. Keefe, Bruyette & Woods, Inc. and selected dealers participating in the
syndicated community offering may receive a commission in the syndicated community offering in a
maximum amount to be agreed upon by us to reflect market requirements at the time of the allocation
of shares in the syndicated community offering.
We have also agreed to indemnify Keefe, Bruyette & Woods, Inc. against liabilities and
expenses, including legal fees, incurred in connection with certain claims or litigation arising
out of or based upon untrue statements or omissions contained in the offering materials for the
common stock, including liabilities under the Securities Act of 1933 and the performance of Keefe,
Bruyette & Woods, Inc. of its services in connection with the conversion.
Description of Sales Activities
Athens Bancshares Corporation will offer the common stock in the subscription offering and
community offering by the distribution of this prospectus and through activities conducted at the
stock information center. The stock information center is expected to operate during normal
business hours throughout the subscription offering and community offering. It is expected that at
any particular time one or more Keefe, Bruyette & Woods, Inc. employees will be working at the
stock information center. Employees of Keefe, Bruyette & Woods, Inc. will be responsible for
responding to questions regarding the conversion and the offering and processing stock orders.
Sales of common stock will be made by registered representatives affiliated with Keefe,
Bruyette & Woods, Inc. or by the selected dealers managed by Keefe, Bruyette & Woods, Inc. Athens
Federal Community Bank's officers and employees may participate in the offering in clerical
capacities, providing administrative support in effecting sales transactions or, when permitted by
state securities laws, answering questions of a mechanical nature relating to the proper execution
of the order form. Athens Federal Community Bank's officers may answer questions regarding our
business when permitted by state securities laws. Other questions of prospective purchasers,
including questions as to the advisability or nature of the investment, will be directed to
registered representatives. Athens Federal Community Bank's officers and employees have been
instructed not to solicit offers to purchase common stock or provide advice regarding the purchase
of common stock.
105
Table of Contents
No officer, director or employee of Athens Federal Community Bank will be compensated,
directly or indirectly, for any activities in connection with the offer or sale of common stock in
the offering.
None of Athens Federal Community Bank's personnel participating in the offering is registered
or licensed as a broker or dealer or an agent of a broker or dealer. Athens Federal Community
Bank's personnel will assist in the above-described sales activities under an exemption from
registration as a broker or dealer provided by Rule 3a4-l promulgated under the Securities Exchange
Act of 1934. Rule 3a4-l generally provides that an "associated person of an issuer" of securities
will not be deemed a broker solely by reason of participation in the sale of securities of the
issuer if the associated person meets certain conditions. These conditions include, but are not
limited to, that the associated person participating in the sale of an issuer's securities not be
compensated in connection with the offering at the time of participation, that the person not be
associated with a broker or dealer and that the person observe certain limitations on his or her
participation in the sale of securities. For purposes of this exemption, "associated person of an
issuer" is defined to include any person who is a director, officer or employee of the issuer or a
company that controls, is controlled by or is under common control with the issuer.
Procedure for Purchasing Shares in the Subscription and Community Offerings
Use of Order Forms.
To purchase shares in the subscription offering, a properly completed and
executed order form must be received (not postmarked) by us in our stock information center by
___:___ p.m., Eastern time, on ____________. Your order form must be accompanied by full payment
for all of the shares subscribed for or include appropriate authorization in the space provided on
the order form for withdrawal of full payment from a deposit account with Athens Federal Community
Bank. To purchase shares in the community offering, you must deliver a properly completed and
executed order form to us, accompanied by the required payment for each share subscribed for,
before the community offering terminates, which may be on, or at any time after, the end of the
subscription offering. Our interpretation of the terms and conditions of the plan of conversion
and of the acceptability of the order forms will be final.
To ensure that your stock purchase eligibility and priority are properly identified, you must
list all accounts on the order form, giving all names in each account and the account number. We
will strive to identify your ownership in all accounts, but cannot guarantee we will identify all
accounts in which you have an ownership interest. Failure to list all of your accounts may result
in fewer shares being allocated to you than if all of your accounts were listed.
We need not accept order forms that are received after the expiration of the subscription
offering or community offering, as the case may be, or that are executed defectively or that are
received without full payment or without appropriate withdrawal instructions. In addition, we are
not obligated to accept orders submitted on photocopied or facsimilied stock order forms. We have
the right to waive or permit the correction of incomplete or improperly executed order forms, but
do not represent that we will do so. Under the plan of conversion, our interpretation of the terms
and conditions of the plan of conversion and of the order form will be final. Once received, an
executed order form may not be modified, amended or rescinded without our consent unless the
offering has not been completed within 45 days after the end of the subscription offering.
The reverse side of the order form contains a regulatorily mandated certification form. We
will not accept order forms where the certification form is not executed. By executing and
returning the certification form, you will be certifying that you received this prospectus and
acknowledging that the common stock is not a deposit account and is not insured or guaranteed by
the federal government. You also will be acknowledging that you received disclosure concerning the
risks involved in this offering. The certification form could be used as support to show that you
understand the nature of this investment.
To ensure that each purchaser in the subscription and community offering receives a prospectus
at least 48 hours before the end of the subscription and community offering, as required by Rule
15c2-8 under the Securities Exchange Act of 1934, as amended, no prospectus will be mailed any
later than five days before that date or hand delivered any later than two days before that date.
Execution of the order form will confirm receipt or delivery under Rule 15c2-8. Order forms will
be distributed only when preceded or accompanied by a prospectus.
106
Table of Contents
Payment for Shares.
Payment for subscriptions may be made by check, bank draft or money
order, or by authorization of withdrawal from deposit accounts maintained with Athens Federal
Community Bank. Funds received before the completion of the offering will be maintained in a
segregated account at Athens Federal Community Bank or, at our discretion, at another federally
insured depository institution. However, we will not maintain more than one escrow account. All
subscriptions received will bear interest at Athens Federal Community Bank's passbook savings rate,
which is currently 0.3% per annum. Subscribers' funds will be transmitted to the segregated
account no later than noon of the next business day where they will be invested in investments that
are permissible under Securities and Exchange Commission Rule 15c2-4. Appropriate means by which
withdrawals may be authorized are provided on the order form. No wire transfers or third party
checks will be accepted. Interest will be paid on payments made by check, bank draft or money
order at our passbook rate from the date payment is received at the conversion center until the
completion or termination of the offering. Payment in cash will not be accepted unless the cash is
converted into a bank check or money order. If payment is made by authorization of withdrawal from
deposit accounts, the funds authorized to be withdrawn from a deposit account will continue to
accrue interest at the contractual rates until completion or termination of the offering, but a
hold will be placed on the funds, making them unavailable to the depositor until completion or
termination of the offering. When the offering is completed, the funds received in the offering
will be used to purchase the shares of common stock ordered. The shares of common stock issued in
the offering cannot and will not be insured by the Federal Deposit Insurance Corporation or any
other government agency. If the offering is not consummated for any reason, all funds submitted
will be promptly refunded with interest as described above.
If a subscriber authorizes us to withdraw the amount of the purchase price from his or her
deposit account, we will do so as of the completion of the offering, though the account must
contain the full amount necessary for payment at the time the subscription order is received. We
will waive any applicable penalties for early withdrawal from certificate accounts. If the
remaining balance in a certificate account is reduced below the applicable minimum balance
requirement at the time funds are actually transferred under the authorization, the certificate
will be canceled at the time of the withdrawal, without penalty, and the remaining balance will
earn interest at our passbook rate.
The employee stock ownership plan will not be required to pay for the shares subscribed for at
the time it subscribes, but rather may pay for shares of common stock subscribed for upon the
completion of the offering; provided that there is in force from the time of its subscription until
the completion of the offering a loan commitment from an unrelated financial institution or from us
to lend to the employee stock ownership plan, at that time, the aggregate purchase price of the
shares for which it subscribed.
We may, in our sole discretion, permit institutional investors to submit irrevocable orders
together with the legally binding commitment for payment and to thereafter pay for such shares of
common stock for which they subscribe in the community offering at any time before the 48 hours
before the completion of the offering. This payment may be made by wire transfer.
Our individual retirement accounts ("IRAs") do not permit investment in common stock. A
depositor interested in using his or her IRA funds to purchase common stock must do so through a
self-directed IRA. Since we do not offer those accounts, we will allow a depositor to make a
trustee-to-trustee transfer of the IRA funds to a trustee offering a self-directed IRA program with
the agreement that the funds will be used to purchase our common stock in the offering. There will
be no early withdrawal or Internal Revenue Service interest penalties for such transfers. The new
trustee would hold the common stock in a self-directed account in the same manner as we now hold
the depositor's IRA funds. An annual administrative fee may be payable to the new trustee.
Depositors interested in using funds in an IRA with us to purchase common stock should contact the
conversion center as soon as possible so that the necessary forms may be forwarded for execution
and returned before the subscription offering ends. In addition, federal laws and regulations
require that officers, directors and 10% shareholders who use self-directed IRA funds to purchase
shares of common stock in the subscription offering, make purchases for the exclusive benefit of
IRAs.
How We Determined the Offering Range and the $10.00 Per Share Purchase Price
Federal regulations require that the aggregate purchase price of the securities sold in
connection with the offering be based upon our estimated pro forma value, as determined by an
independent appraisal. We have retained Keller & Company, Inc., which is experienced in the
evaluation and appraisal of business entities, to prepare the
107
Table of Contents
independent appraisal. Keller & Company will receive fees totaling $35,000 for its appraisal
services, plus $2,000 for each appraisal valuation update other than the required final valuation
update at closing, and a maximum of $1,500 for reimbursement of out-of-pocket expenses. We have
agreed to indemnify Keller & Company and its employees and affiliates for certain costs and
expenses, including reasonable legal fees arising out of, related to, or based upon the offering
and due to any misstatement or untrue statement or intentional omission by Athens Federal Community
Bank.
Keller & Company prepared the appraisal taking into account the pro forma impact of the
offering. For its analysis, Keller & Company undertook substantial investigations to learn about
our business and operations. We supplied financial information, including annual financial
statements, information on the composition of assets and liabilities, and other financial
schedules. In addition to this information, Keller & Company reviewed our stock issuance
application as filed with the Office of Thrift Supervision and our registration statement as filed
with the Securities and Exchange Commission. Furthermore, Keller & Company visited our facilities
and had discussions with our management. Keller & Company did not perform a detailed individual
analysis of the separate components of our assets and liabilities. We did not impose any
limitations on Keller & Company in connection with its appraisal.
In connection with its appraisal, Keller & Company reviewed the following factors, among
others:
•
our present and projected operating results and financial condition;
•
the economic and demographic conditions of our primary market area;
•
pertinent historical financial and other information relating to Athens Federal
Community Bank;
•
a comparative evaluation of our operating and financial statistics with those of
other thrift institutions;
•
the proposed price per share;
•
the aggregate size of the offering of common stock;
•
the impact of the conversion on our capital position and earnings potential; and
•
the trading market for securities of comparable institutions and general conditions
in the market for such securities.
Consistent with Office of Thrift Supervision appraisal guidelines, Keller & Company's
analysis utilized three selected valuation procedures, the price/tangible book method, the
price/core earnings method, and the price/assets method, all of which are described in its report.
Keller & Company's appraisal report is filed as an exhibit to the registration statement that we
have filed with the Securities and Exchange Commission. See
"Where You Can Find More Information."
Keller & Company placed the greatest emphasis on the price/core earnings and price/tangible book
methods in estimating pro forma market value. Keller & Company compared the pro forma
price/tangible book and price/core earnings ratios for Athens Bancshares Corporation to the same
ratios for a peer group of comparable companies. The peer group included companies with:
•
average assets of $532.0 million;
•
average non-performing assets of 0.88% of total assets;
•
average net loans of 72.27% of total assets;
•
average equity of 12.07% of total assets; and
•
average core income of 0.63% of average assets.
108
Table of Contents
On the basis of the analysis in its report, Keller & Company has advised us that, in its
opinion, as of August 19, 2009, our estimated pro forma market value, including shares contributed
to the Athens Federal Foundation, was within the valuation range of $16.2 million and $21.9 million
with a midpoint of $19.0 million.
The following table presents a summary of selected pricing ratios for Athens Bancshares
Corporation, for the peer group companies and for all publicly traded thrifts. Compared to the
average pricing ratios of the peer group, Athens Bancshares Corporation's pro forma pricing ratios
at the maximum of the offering range indicated discount of 18.85% on a price-to-tangible book value
basis.
Price to Core
Price to Tangible
Earnings
Price to Book
Book Value
Multiple (1)
Value Ratio (2)
Ratio (2)
Athens Bancshares Corporation (pro forma):
Minimum
8.97
x
42.91
%
43.66
%
Midpoint
10.73
47.33
48.11
Maximum
12.55
51.23
52.49
Maximum, as adjusted
14.72
55.18
55.98
Peer Group:
Average
13.06
x
63.12
%
72.11
%
Median
12.82
60.39
67.76
All publicly-traded thrift:
Average
13.71
x
66.98
%
73.53
%
Median
11.11
63.38
66.20
(1)
Ratios are based on earnings for the twelve months ended December 31, 2008 or June 30, 2009,
and share prices as of August 19, 2009.
(2)
Ratios are based on book value as of December 31, 2008 or June 30, 2009, and share prices as of
August 19, 2009.
The pro forma information presented under
"Pro Forma Data"
reflects an estimated expense for
the equity incentive plan that may be adopted by Athens Bancshares Corporation and the resulting
effect on the pro forma price-to-earnings multiples for Athens Bancshares Corporation.
Our board of directors reviewed Keller & Company's appraisal report, including the methodology
and the assumptions used by Keller & Company, and determined that the valuation range was
reasonable and adequate. Assuming that the shares are sold at $10.00 per share in the conversion,
the estimated number of shares would be between 1,615,000 at the minimum of the valuation range and
2,185,000 at the maximum of the valuation range, with a midpoint of 1,900,000, which amount
includes shares contributed to the foundation. The purchase price of $10.00 per share was
determined by us, taking into account, among other factors, the requirement under Office of Thrift
Supervision regulations that the common stock be offered in a manner that will achieve the widest
distribution of the stock and desired liquidity in the common stock after the offering.
Since the outcome of the offering relates in large measure to market conditions at the time of
sale, it is not possible for us to determine the exact number of shares that we will issue at this
time. The offering range may be amended, with the approval of the Office of Thrift Supervision, if
necessitated by developments following the date of the appraisal in, among other things, market
conditions, our financial condition or operating results, regulatory guidelines or national or
local economic conditions.
If, upon completion of the subscription offering, at least the minimum number of shares are
subscribed for, Keller & Company, after taking into account factors similar to those involved in
its prior appraisal, will determine its estimate of our pro forma market value as of the close of
the subscription offering. If, as a result of regulatory considerations, demand for the shares or
changes in market conditions, Keller & Company determines that our pro forma market value has
increased, we may sell up to 2,412,750 shares without any further notice to you.
No shares will be sold unless Keller & Company confirms that, to the best of its knowledge and
judgment, nothing of a material nature has occurred that would cause it to conclude that the actual
total purchase price of the
109
Table of Contents
shares on an aggregate basis was materially incompatible with its appraisal. If, however, the
facts do not justify that statement, we may either: terminate the stock offering and promptly
return all funds; set a new offering range, notify all subscribers and give them the opportunity to
place a new order for shares of Athens Bancshares Corporation common stock; or take such other
actions as may be permitted by the Office of Thrift Supervision. If the offering is terminated all
subscriptions will be cancelled and subscription funds will be returned promptly with interest, and
holds on funds authorized for withdrawal from deposit accounts will be released or reduced. If
Keller & Company establishes a new valuation range, it must be approved by the Office of Thrift
Supervision.
In formulating its appraisal, Keller & Company relied upon the truthfulness, accuracy and
completeness of all documents we furnished to it. Keller & Company also considered financial and
other information from regulatory agencies, other financial institutions, and other public sources,
as appropriate. While Keller & Company believes this information to be reliable, Keller & Company
does not guarantee the accuracy or completeness of the information and did not independently verify
the consolidated financial statements and other data provided by us nor independently value our
assets or liabilities. The appraisal is not intended to be, and must not be interpreted as, a
recommendation of any-kind as to the advisability of purchasing shares of common stock. Moreover,
because the appraisal must be based on many factors that change periodically, there is no assurance
that purchasers of shares in the offering will be able to sell shares after the offering at prices
at or above the purchase price.
Copies of the appraisal report of Keller & Company, including any amendments to the report,
and the detailed memorandum of the appraiser setting forth the method and assumptions for such
appraisal are available for inspection at our main office and the other locations specified under
"Where You Can Find More Information."
Delivery of Certificates
Certificates representing the common stock sold in the offering will be mailed by our transfer
agent to the persons whose subscriptions or orders are filled at the addresses of such persons
appearing on the stock order form as soon as practicable following completion of the offering. We
will hold certificates returned as undeliverable until claimed by the persons legally entitled to
the certificates or otherwise disposed of in accordance with applicable law.
Until certificates
for common stock are available and delivered to subscribers, subscribers may not be able to sell
their shares, even though trading of the common stock may have commenced.
Restrictions on Repurchase of Stock
Under Office of Thrift Supervision regulations, we may not for a period of one year from the
date of the completion of the offering repurchase any of our common stock from any person, except
(1) in an offer made to all shareholders to repurchase the common stock on a pro rata basis,
approved by the Office of Thrift Supervision, (2) the repurchase of qualifying shares of a
director, or (3) repurchases to fund restricted stock plans or tax-qualified employee stock benefit
plans. Where extraordinary circumstances exist, the Office of Thrift Supervision may approve the
open market repurchase of up to 5% of our common stock during the first year following the
offering. To receive such approval, we must establish compelling and valid business purposes for
the repurchase to the satisfaction of the Office of Thrift Supervision. Furthermore, repurchases
of any common stock are prohibited if they would cause Athens Federal Community Bank's regulatory
capital to be reduced below the amount required under the regulatory capital requirements imposed
by the Office of Thrift Supervision.
Restrictions on Transfer of Shares After the Conversion Applicable to Officers and Directors
Common stock purchased in the offering will be freely transferable, except for shares
purchased by our directors and executive officers.
Shares of common stock purchased by our directors and executive officers may not be sold for a
period of one year following the offering, except upon the death of the shareholder or unless
approved by the Office of Thrift Supervision. Shares purchased by these persons in the open market
after the offering will be free of this restriction. Shares of common stock issued to directors
and executive officers will bear a legend giving appropriate notice of the restriction and, in
addition, we will give appropriate instructions to our transfer agent with respect to the
restriction
110
Table of Contents
on transfers. Any shares issued to directors and executive officers as a stock dividend, stock
split or otherwise with respect to restricted common stock will be similarly restricted.
Persons affiliated with us, including our directors and executive officers, received
subscription rights based only on their deposits with Athens Federal Community Bank as account
holders. Any purchases made by persons affiliated with us for the explicit purpose of meeting the
minimum of the offering must be made for investment purposes only, and not with a view towards
redistribution. Furthermore, as set forth above, Office of Thrift Supervision regulations restrict
sales of common stock purchased in the offering by directors and executive officers for a period of
one year following the offering.
Purchases of outstanding shares of our common stock by directors, officers, or any person who
becomes an executive officer or director after adoption of the plan of conversion, and their
associates, during the three-year period following the offering may be made only through a broker
or dealer registered with the Securities and Exchange Commission, except with the prior written
approval of the Office of Thrift Supervision. This restriction does not apply, however, to
negotiated transactions involving more than 1% of our outstanding common stock or to the purchase
of stock under stock benefit plans.
We have filed with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended, for the registration of the common stock to be issued in the
offering and contributed to the charitable foundation. This registration does not cover the resale
of the shares. Shares of common stock purchased by persons who are not affiliates of us may be
resold without registration. Shares purchased by an affiliate of us will have resale restrictions
under Rule 144 of the Securities Act. If we meet the current public information requirements of
Rule 144, each affiliate of ours who complies with the other conditions of Rule 144, including
those that require the affiliate's sale to be aggregated with those of certain other persons, would
be able to sell in the public market, without registration, a number of shares not to exceed, in
any three-month period, the greater of 1% of our outstanding shares or the average weekly volume of
trading in the shares during the preceding four calendar weeks. We may make future provision to
permit affiliates to have their shares registered for sale under the Securities Act under certain
circumstances.
Interpretation, Amendment and Termination
To the extent permitted by law, all interpretations by us of the plan of conversion will be
final; however, such interpretations have no binding effect on the Office of Thrift Supervision.
The plan of conversion provides that, if deemed necessary or desirable, we may substantively amend
the plan of conversion as a result of comments from regulatory authorities or otherwise.
Completion of the offering requires the sale of all shares of the common stock within 90 days
following approval of the plan of conversion by the Office of Thrift Supervision, unless an
extension is granted by the Office of Thrift Supervision. If this condition is not satisfied, the
plan of conversion will be terminated and we will continue our business as a federal mutual savings
bank. We may terminate the plan of conversion at any time.
111
Table of Contents
Athens Federal Foundation
General
In furtherance of our commitment to our local community, the plan of conversion provides that
we will establish a charitable foundation in connection with the conversion. We intend to
establish the Athens Federal Foundation as a non-stock Delaware corporation to serve as the
charitable foundation. The foundation will be funded with Athens Bancshares Corporation common
stock and cash as described below. By further enhancing our visibility and reputation in our local
community, we believe that the foundation will enhance the long-term value of our community banking
franchise. We believe the conversion presents us with a unique opportunity to provide a
substantial and continuing benefit to our community and to receive the associated tax benefits.
Purpose of the Charitable Foundation
We emphasize community lending and community activities. The Athens Federal Foundation is
being formed to complement, not to replace, our existing community activities. Although we intend
to continue to emphasize community lending and community activities following the conversion, such
activities are not our sole corporate purpose. The Athens Federal Foundation will be dedicated
completely to community activities and the promotion of charitable causes, and may be able to
support such activities in manners that are not presently available to us. We believe that the
Athens Federal Foundation will enable us to assist the communities within our market areas in areas
beyond community development and lending and will enhance our current activities under the
Community Reinvestment Act.
We further believe that the funding of the Athens Federal Foundation with our common stock in
addition to cash will allow our community to share in our potential growth and success long after
the conversion. The Athens Federal Foundation will accomplish that goal by providing for continued
ties between our community and us, thereby forming a partnership within the communities in which we
operate.
We do not expect the contribution to the Athens Federal Foundation to take the place of our
traditional community lending and charitable activities. For the six months ended June 30, 2009
and the years ended December 31, 2008 and 2007, we contributed $21,000, $35,000 and $68,000,
respectively, to community organizations. We expect to continue making charitable contributions
and donations within our community. In connection with the closing of the offering, we intend to
contribute to the Athens Federal Foundation 100,000 shares of our common stock and $100,000 in
cash.
Structure and Regulatory Requirements of the Charitable Foundation
The Athens Federal Foundation will be incorporated under Delaware law as a non-stock
corporation. The certificate of incorporation of the Athens Federal Foundation will provide that
the Athens Federal Foundation is organized exclusively for charitable purposes as set forth in
Section 501(c)(3) of the Internal Revenue Code. The Certificate of Incorporation will further
provide that no part of the net earnings of the foundation will inure to the benefit of, or be
distributable to, its directors, officers or members. Pursuant to regulations of the Office of
Thrift Supervision, Athens Federal Foundation's certificate of incorporation and gift instrument
must also provide that:
•
The charitable organization's primary purpose is to serve and make grants in Athens
Federal Community Bank's local community.
•
As long as the Athens Federal Foundation controls shares of Athens Bancshares
Corporation, it must vote those shares in the same ratio as all other shares voted on
each proposal considered by Athens Bancshares Corporation's shareholders.
•
For at least five years after its organization, one seat on the Athens Federal
Foundation's board of directors is reserved for an independent director from Athens
Federal Community Bank's local community. This director may not be an employee,
officer or director of Athens Federal
112
Table of Contents
Community Bank or an affiliate of Athens Federal Community Bank, and should have
experience with local community charitable organizations and grant making.
•
For at least five years after its organization, one seat on the Athens Federal
Foundation's board of directors is reserved for a director from Athens Federal
Community Bank's board of directors or the board of directors of an acquirer or
resulting institution in the event of a merger or acquisition of Athens Federal
Community Bank.
•
The Office of Thrift Supervision may examine the charitable organization at the
charitable organization's expense.
•
The charitable organization must comply with all supervisory directives that the
Office of Thrift Supervision imposes.
•
The charitable organization must annually provide the Office of Thrift Supervision
with a copy of the annual report that the charitable organization submitted to the
Internal Revenue Service.
•
The charitable organization must operate according to written policies adopted by
its board of directors, including a conflict of interest policy.
•
The charitable organization may not engage in self-dealing, and must comply with all
laws necessary to maintain its tax-exempt status under the Internal Revenue Code.
In addition, within six months of completing the conversion, Athens Federal Foundation must
submit to the Office of Thrift Supervision a three-year operating plan.
Three directors of Athens Federal Community Bank will serve on the initial board of directors
of the foundation: Elaine M. Cathcart, Lyn B. Thompson and Larry D. Wallace. We also will select
one additional person to serve on the foundation's board of directors who will not be one of our
employees, officers or directors. As required by the Office of Thrift Supervision regulations,
this other director will have experience with local charitable organizations and grant making.
While there are no plans to change the size of the initial board of directors during the year
following the composition of its board of directors, following the first anniversary of the
conversion, the foundation may alter the size and composition of its board of directors. It is
currently not anticipated that directors of the foundation will receive compensation for their
service.
The board of directors of the Athens Federal Foundation will be responsible for establishing
its grant and donation policies, consistent with the purposes for which it was established. As
directors of a nonprofit corporation, directors of the Athens Federal Foundation will always be
bound by their fiduciary duty to advance the foundation's charitable goals, to protect its assets
and to act in a manner consistent with the charitable purposes for which the foundation is
established. The directors of the Athens Federal Foundation also will be responsible for directing
the activities of the foundation, including the management and voting of our common stock held by
the foundation. However, as required by Office of Thrift Supervision regulations, all shares of
common stock held by the Athens Federal Foundation must be voted in the same ratio as all other
shares of the common stock on all proposals considered by our shareholders.
Athens Federal Foundation's place of business will be located at our main offices. The board
of directors of Athens Federal Foundation will appoint such officers and employees as may be
necessary to manage its operations, although no employees are expected to be hired. To the extent
applicable, we will comply with the affiliates restrictions set forth in Sections 23A and 23B of
the Federal Reserve Act and the Office of Thrift Supervision regulations governing transactions
between us and the foundation.
In addition to the initial cash contribution, Athens Federal Foundation will receive working
capital from: (1) any dividends that may be paid on our common stock in the future; (2) within the
limits of applicable federal and state laws, loans collateralized by the common stock; or (3) the
proceeds of the sale of any of the common stock in the open market from time to time. As a private
foundation under Section 501(c)(3) of the Internal Revenue Code,
113
Table of Contents
Athens Federal Foundation will be required to distribute annually in grants or donations a minimum
of 5% of the average fair market value of its net investment assets.
Tax Considerations
Our independent tax advisor has advised us that an organization created for the above purposes
should qualify as a Section 501(c)(3) exempt organization under the Internal Revenue Code and would
be classified as a private foundation. Athens Federal Foundation will submit a timely request to
the Internal Revenue Service to be recognized as an exempt organization. As long as Athens Federal
Foundation files its application for tax-exempt status within 27 months from the date of its
organization, and provided the Internal Revenue Service approves the application, its effective
date as a Section 501(c)(3) organization will be the date of its organization. Our independent tax
advisor, however, has not rendered any advice on whether Athens Federal Foundation's tax-exempt
status will be affected by the regulatory requirement that all shares
of our common stock held by
the Athens Federal Foundation must be voted in the same ratio as all other outstanding shares of
common stock voted on all proposals considered by our shareholders.
We are authorized under federal law to make charitable contributions. We believe that the
conversion presents a unique opportunity to establish and fund a charitable foundation given the
substantial amount of additional capital being raised. In making such a determination, we
considered the dilutive impact of the contribution of common stock to the Athens Federal Foundation
on the amount of common stock to be sold in the conversion. See
"Capitalization," "Regulatory
Capital Compliance,"
and
"Comparison of Independent Valuation and Pro Forma Financial Information
With and Without the Foundation."
The amount of the contribution will not adversely impact our
financial condition. We therefore believe that the amount of the charitable foundation is
reasonable given our pro forma capital position and does not raise safety and soundness concerns.
We have received an opinion from our independent tax advisor that our contribution of our
stock to the Athens Federal Foundation should not constitute an act of self-dealing and that we
should be entitled to a deduction under federal law in the amount of the fair market value of the
stock at the time of the contribution, less the nominal amount that the Athens Federal Foundation
is required to pay us for such stock. Under the Internal Revenue Code, we are permitted to deduct
only an amount equal to 10% of our annual taxable income in any one year. We are permitted under
the Internal Revenue Code to carry the excess contribution over the five-year period following the
contribution to the Athens Federal Foundation. We estimate that substantially all of the
contribution should be deductible under federal law over the six-year period. However, we do not
have any assurance that the Internal Revenue Service will grant tax-exempt status to the
foundation. Furthermore, even if the contribution is deductible under federal law, we may not have
sufficient earnings to be able to use the deduction in full. We do not expect to make any further
contributions to the Athens Federal Foundation within the first five years following the initial
contribution, unless such contributions would be deductible under the Internal Revenue Code. Any
such decisions would be based on an assessment of, among other factors, our financial condition at
that time, the interests of our shareholders and depositors, and the financial condition and
operations of the foundation.
Although we have received an opinion from our independent tax advisor that we should be
entitled to a deduction under federal law for the charitable contribution, there can be no
assurances that the Internal Revenue Service will recognize Athens Federal Foundation as a Section
501(c)(3) exempt organization or that the deduction will be permitted. In such event, our
contribution to the Athens Federal Foundation would be expensed without tax benefit, resulting in a
reduction in earnings in the year in which the Internal Revenue Service makes such a determination.
See
"Risk Factors — Risks Related to the Formation of the Charitable Foundation — Our
contribution to the Athens Federal Foundation may not be tax deductible, which could negatively
impact our profits."
As a private foundation, earnings and gains, if any, from the sale of common stock or other
assets are exempt from federal and sate income taxation. However, investment income, such as
interest, dividends and capital gains, is generally taxed at a rate of 2.0%. Athens Federal
Foundation will be required to file an annual return with the Internal Revenue Service within four
and one-half months after the close of its fiscal year. Athens Federal Foundation will be required
to make its annual return available for public inspection. The annual return for a private
foundation includes, among other things, an itemized list of all grants made or approved, showing
the amount of each grant, the recipient, any relationship between a grant recipient and the foundation's managers
and a concise statement of the purpose of each grant.
114
Table of Contents
Restrictions on the Acquisition of
Athens Bancshares Corporation
and Athens Federal Community Bank
General
Athens Federal Community Bank's plan of conversion provides for the conversion of Athens
Federal Community Bank from the mutual to the stock form of organization and, as part of the
conversion, the adoption of a new federal stock charter and bylaws by Athens Federal Community
Bank's members. The plan of conversion also provides for the concurrent formation of a holding
company. As described below and elsewhere in this document, certain provisions in Athens
Bancshares Corporation's charter and bylaws may have anti-takeover effects. In addition,
provisions in Athens Federal Community Bank's federal stock charter and bylaws may also have
anti-takeover effects. Finally, Tennessee corporate law and regulatory restrictions may make it
difficult for persons or companies to acquire control of either Athens Bancshares Corporation or
Athens Federal Community Bank.
Restrictions in Athens Bancshares Corporation's Charter and Bylaws
Athens Bancshares Corporation's charter and bylaws contain provisions that could make more
difficult an acquisition of Athens Bancshares Corporation by means of a tender offer, proxy contest
or otherwise. Some provisions will also render the removal of the incumbent board of directors or
management of Athens Bancshares Corporation more difficult. These provisions may have the effect
of deterring a future takeover attempt that is not approved by the directors of Athens Bancshares
Corporation, but which Athens Bancshares Corporation shareholders may deem to be in their best
interests or in which shareholders may receive a substantial premium for their shares over then
current market prices. As a result, shareholders who might desire to participate in such a
transaction may not have the opportunity to do so. The following description of these provisions
is only a summary and does not provide all of the information contained in Athens Bancshares
Corporation's charter and bylaws. See
"Where You Can Find More Information"
for information on
where to obtain a copy of these documents.
Business Combinations with Interested Shareholders.
The charter requires the approval of the
holders of at least 80% of Athens Bancshares Corporation's outstanding shares of voting stock
entitled to vote to approve certain "business combinations" with an "interested shareholder." This
supermajority voting requirement will not apply in cases where the proposed transaction has been
approved by a majority of those members of Athens Bancshares Corporation's board of directors who
are unaffiliated with the interested shareholder and who were directors before the time when the
interested shareholder became an interested shareholder or if the proposed transaction meets
certain conditions that are designed to afford the shareholders a fair price in consideration for
their shares. In each such case, where shareholder approval is required, the approval of only a
majority of the outstanding shares of voting stock is sufficient.
Under Athens Bancshares Corporation's charter, the term "interested shareholder" includes any
individual, group acting in concert, corporation, partnership, association or other entity (other
than Athens Bancshares Corporation or its subsidiary) who or which (i) is the beneficial owner,
directly or indirectly, of 10% or more of the outstanding shares of voting stock of Athens
Bancshares Corporation; (ii) is an affiliate of Athens Bancshares Corporation and at any time
within the two-year period immediately before the date in question was the beneficial owner,
directly or indirectly, of 10% or more of the outstanding shares of voting stock of Athens
Bancshares Corporation; or (iii) is an assignee of or has otherwise succeeded to any shares of the
outstanding shares of voting stock of Athens Bancshares Corporation which were at any time within
the two-year period immediately before the date in question beneficially owned by any interested
shareholder, if such assignment or succession shall have occurred in the ordinary course of a
transaction or series of transactions not involving a public offering within the meanings of the
Securities Act of 1933, as amended.
115
Table of Contents
A "business combination" includes, but is not limited to:
•
any merger or consolidation of Athens Bancshares Corporation or any of its
subsidiaries with (i) any interested shareholder or (ii) any corporation (whether or
not itself is an interested shareholder) which is, or after such merger or
consolidation would be, an affiliate of an interested shareholder;
•
any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or
with any interested shareholder, or affiliate of an interested shareholder, of 25% or
more of the assets of Athens Bancshares Corporation or combined assets of Athens
Bancshares Corporation and its subsidiaries;
•
the issuance or transfer by Athens Bancshares Corporation or any of its subsidiaries
of any securities of Athens Bancshares Corporation or any of its subsidiaries to any
interested shareholder or any affiliate of any interested shareholder in exchange for
cash, securities or other property having an aggregate fair market value equaling or
exceeding 25% of the combined fair market value of the outstanding common stock of
Athens Bancshares Corporation, except for any issuance or transfer pursuant to an
employee benefit plan of Athens Bancshares Corporation or any of its subsidiaries;
•
the adoption of any plan for the liquidation or dissolution of Athens Bancshares
Corporation proposed by or on behalf of any interested shareholder or any affiliate or
associate of such interested shareholder; or
•
any reclassification of securities, or recapitalization for Athens Bancshares
Corporation, or any merger or consolidation of Athens Bancshares Corporation with any
of its subsidiaries or any other transaction (whether or not into or otherwise
involving an interested shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class of equity or
convertible securities of Athens Bancshares Corporation or any of its subsidiaries
which is directly or indirectly owned by any interested shareholder or any affiliate of
any interested shareholder.
Limitation on Voting Rights.
The charter of Athens Bancshares Corporation provides that in no
event shall any person, who directly or indirectly beneficially owns in excess of 10% of the
then-outstanding shares of common stock as of the record date for the determination of shareholders
entitled or permitted to vote on any matter (the "10% limit"), be entitled or permitted to any vote
in respect of the shares held in excess of the 10% limit. Beneficial ownership is determined
pursuant to the federal securities laws and includes, but is not limited to, shares as to which any
person and his or her affiliates (1) have the right to acquire upon the exercise of conversion
rights, exchange rights, warrants or options and (2) have or share investment or voting power, but
shall not be deemed the beneficial owner of any voting shares solely by reason of a revocable proxy
granted for a particular meeting of shareholders, and that are not otherwise beneficially, or
deemed by Athens Bancshares Corporation to be beneficially, owned by such person and his or her
affiliates.
The foregoing restriction does not apply to:
•
any underwriter or member of an underwriting or selling group involving a public
sale or resale of securities of Athens Bancshares Corporation or any subsidiary;
provided, however, that upon completion of the sale of such securities, no such
underwriter or member of such selling group is a beneficial owner of more than 10% of
any class of equity security of Athens Bancshares Corporation;
•
any proxy granted to one or more disinterested directors by a shareholder of Athens
Bancshares Corporation;
•
any employee benefit plans of Athens Bancshares Corporation or any subsidiary; and
116
Table of Contents
•
any transaction approved in advance by a majority of such disinterested directors.
Evaluation of Offers.
The charter of Athens Bancshares Corporation provides that its board of
directors, when evaluating a transaction that would or may involve a change in control of Athens
Bancshares Corporation (including a tender or exchange offer, merger or consolidation or sale of
all or substantially all of the assets of Athens Bancshares Corporation), may, in connection with
the exercise of its judgment in determining what is in the best interest of Athens Bancshares
Corporation and its shareholders, give consideration to the following factors:
•
the social and economic effects of the transaction on Athens Bancshares Corporation,
its subsidiaries, employees, depositors, loan and other customers and creditors and the
other elements of the communities in which Athens Bancshares Corporation and its
subsidiaries operate or are located;
•
the business and financial condition and earnings prospects of the acquiring person
or entity, including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the acquisition
and other likely financial obligations of the acquiring person or entity, and the
possible effect of such conditions upon Athens Bancshares Corporation and its
subsidiaries and the other elements of the communities in which Athens Bancshares
Corporation and its subsidiaries operate or are located; and
•
the competence, experience and integrity of the acquiring person or entity and its
or their management.
By having these standards in the charter of Athens Bancshares Corporation, the board of
directors may be in a stronger position to oppose such a transaction if the Board concludes that
the transaction would not be in the best interest of Athens Bancshares Corporation, even if the
price offered is significantly greater than the then market price of any equity security of Athens
Bancshares Corporation.
Board of Directors.
The charter and bylaws of Athens Bancshares Corporation require the board
of directors to be divided into three classes as nearly equal in number as possible and that the
members of each class be elected for a term of three years and until their successors are elected
and qualified, with one class being elected annually. Any vacancy occurring in the board of
directors, however caused, may be filled by an affirmative vote of the majority of the directors
then in office, whether or not a quorum is present, and any director so chosen shall hold office
only until the next annual meeting of shareholders at which directors are elected.
The bylaws of Athens Bancshares Corporation provide that to be eligible for election,
re-election or appointment to the board of directors a person must:
(1)
be no older than 70 years of age;
(2)
be the beneficial owner of at least 100 shares of capital stock of Athens
Bancshares Corporation; and
(3)
not have been: (i) under indictment for, or have ever been convicted of, a
criminal offense involving dishonesty or breach of trust and for which the penalty for
such offense could be imprisonment for more than one year; (ii) a person who a banking
agency has issued a cease and desist order for conduct involving dishonesty or breach
of trust and that order is final and not subject to appeal; or (iii) found by either a
regulatory agency whose decision is final and not subject to appeal or by a court to
have (a) breached a fiduciary duty involving personal profit or (b) committed a willful
violation of any law, rule or regulation governing banking, securities, commodities or
insurance, or any final cease and desist order issued by a banking, securities,
commodities or insurance regulatory agency.
117
Table of Contents
These provisions may prevent shareholders from nominating themselves or persons of their
choosing for election to the board of directors.
The charter of Athens Bancshares Corporation provides that any director may be removed by
shareholders only for cause upon the affirmative vote of the holders of not less than 80% of the
outstanding voting shares. The higher vote threshold will make it more difficult for shareholders
to remove directors and replace them with their own nominees.
Special Meetings of Shareholders.
The charter of Athens Bancshares Corporation contains a
provision pursuant to which special meetings of the shareholders of Athens Bancshares Corporation
may only be called by the board of directors pursuant to a resolution adopted by a majority of the
total number of directors which Athens Bancshares Corporation would have if there were no vacancies
on the board of directors or the holders of not less than a majority of the capital stock of Athens
Bancshares Corporation entitled to vote at a meeting.
Advance Notice Provisions for Shareholder Nominations and Proposals
. Athens Bancshares
Corporation's bylaws establish an advance notice procedure for shareholders to nominate directors
or bring other business before an annual meeting of shareholders of Athens Bancshares Corporation.
A person may not be nominated for election as a director unless that person is nominated by or at
the direction of the Athens Bancshares Corporation board of directors or by a shareholder who has
given appropriate notice to Athens Bancshares Corporation before the meeting. Similarly, a
shareholder may not bring business before an annual meeting unless the shareholder has given Athens
Bancshares Corporation appropriate notice of its intention to bring that business before the
meeting. Athens Bancshares Corporation's secretary must receive notice of the nomination or
proposal not less than 90 days before the annual meeting; provided, however, that if less than 100
days' notice of prior public disclosure of the date of the meeting is given or made to the
shareholders, notice by the shareholder to be timely must be received not later than the close of
business on the 10th day following the day on which such notice of the date of the annual meeting
was mailed or such public disclosure was made. A shareholder who desires to raise new business
must provide certain information to Athens Bancshares Corporation concerning the nature of the new
business, the shareholder and the shareholder's interest in the business matter. Similarly, a
shareholder wishing to nominate any person for election as a director must provide Athens
Bancshares Corporation with certain information concerning the nominee and the proposing
shareholder.
Advance notice of nominations or proposed business by shareholders gives Athens Bancshares
Corporation's board of directors time to consider the qualifications of the proposed nominees, the
merits of the proposals and, to the extent deemed necessary or desirable by the board of directors,
to inform shareholders and make recommendations about those matters.
Preferred Stock.
The charter authorizes Athens Bancshares Corporation's board of directors to
establish one or more series of preferred stock and, for any series of preferred stock, to
determine the terms and rights of the series, including voting rights, conversion rates, and
liquidation preferences. Although Athens Bancshares Corporation's board of directors has no
intention at the present time of doing so, it could issue a series of preferred stock that could,
depending on its terms, impede a merger, tender offer or other takeover attempt. Athens Bancshares
Corporation's board of directors will make any determination to issue shares with those terms based
on its judgment as to the best interests of Athens Bancshares Corporation and its shareholders.
Amendment of Governing Instruments.
The charter of Athens Bancshares Corporation generally
may be amended by the holders of a majority of the shares entitled to vote; provided, however, that
any amendment of Articles VII (Repurchase of Shares), IX (Removal of Directors), X (Elimination of
Directors' Liability), XI (Indemnification), XII (Limitations on Voting Common Stock), XIII
(Approval of Business Combinations), XIV (Evaluations of Business Combinations), XV (Special
Meeting of Shareholders), XVII (Amendment of Bylaws) and XVIII (Amendment of Charter) of the
charter must be approved by the affirmative vote of the holders of at least 80% of the outstanding
shares entitled to vote, except that the board of directors may amend the articles of incorporation
without any action by the shareholders to increase or decrease the aggregate number of shares of
capital stock. The bylaws of Athens Bancshares Corporation may be amended by the majority vote of
the board of directors or by the affirmative vote of the holders of at least 80% of the outstanding
shares of Athens Bancshares Corporation capital stock entitled to vote.
118
Table of Contents
Restrictions in Tennessee Corporate Law
Tennessee law contains certain provisions, described below, which may be applicable to Athens
Bancshares Corporation upon consummation of the conversion.
Control Share Acquisitions.
The Tennessee Control Share Acquisition Act provides that
"control shares" of a Tennessee corporation, with 100 or more shareholders and its principal place
of business in Tennessee and more than 10% of its shareholders or 10% of its shares held by
Tennessee residents, acquired in a "control share acquisition" have no voting rights unless
approved by a vote of a majority of the votes entitled to be cast on the matter, excluding shares
owned by the acquirers or by the corporation's officers or directors who are employees of the
corporation. Control shares are shares of voting stock which, if aggregated with all other shares
of stock previously acquired, would entitle the acquirers to exercise voting power in electing
directors within one of the following ranges of voting power:
•
one-fifth (1/5) or more but less than one-third (1/3) of all voting power;
•
one-third (1/3) or more but less than a majority of all voting power; or
•
a majority or more of all voting power.
Control shares do not include shares of stock an acquiring person is entitled to vote as a
result of having previously obtained shareholder approval. A control share acquisition generally
means the acquisition of, ownership of or the power to direct the exercise of voting power with
respect to, control shares.
A person who has made or proposes to make a "control share acquisition," under specified
conditions, including an undertaking to pay expenses, may require the board of directors to call a
special shareholders' meeting to consider the voting rights of the shares. The meeting must be
held within 50 days of the demand. If no request for a meeting is made, the corporation may itself
present the question at any shareholders' meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver
an acquiring person statement as permitted by the statute, the corporation generally may redeem
all, but not less than all, of the control shares, except those for which voting rights have
previously been approved. This redemption of shares must be for fair value, determined without
regard to the absence of voting rights as of the date of the last control share acquisition or of
any shareholders' meeting at which the voting rights of the shares are considered and not approved.
If voting rights for "control shares" are approved at a shareholders' meeting and the acquirer
becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may
exercise appraisal rights. The fair value of the stock determined for purposes of appraisal rights
may not be less than the value of the shares on the date of any shareholders' meeting at which the
voting rights of the shares are considered and not approved. The limitations and restrictions
otherwise applicable to the exercise of dissenters' rights do not apply in the context of a
"control share acquisition."
The control share acquisition statute does not apply to stock acquired in a merger,
consolidation or share exchange if the corporation is a party to the transaction, or to
acquisitions previously approved or exempted by a provision in the articles of incorporation or
bylaws of the corporation.
Business Combination Act.
The Tennessee Business Combination Act generally prohibits a
"business combination" (defined to include mergers, share exchanges, sales, leases or pledges of
10% of assets, issuance of securities and similar transactions) of a "resident domestic
corporation" or a subsidiary with an "Interested Shareholder" (generally defined as any person or
entity which beneficially owns 10% or more of the voting power of any class or series of the
corporation's stock then outstanding) for a period of five years after the date the person becomes
an Interested Shareholder unless, before that date, the board of directors of the resident domestic
corporation approved either the business combination or the transaction which resulted in the
shareholder becoming an Interested Shareholder and the business combination satisfies any other
applicable requirements imposed by law or by the corporation's charter or bylaws. After five
years, the Interested Shareholder may only engage in a business combination if it is approved by
two-thirds of the outstanding voting stock not beneficially owned by the Interested Shareholder or
the business combination satisfies certain fair price criteria. The Business Combination Act also
119
Table of Contents
limits the extent to which a "resident domestic corporation" which has a class of voting stock
traded on any national securities exchange or registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 or any of its officers or directors may be held liable for
resisting any business combination.
For purposes of the Tennessee Business Combination Act, the term "resident domestic
corporation" is defined as an issuer of voting stock which, as of the acquisition date in question,
is organized under the laws of Tennessee and meets two or more of the following requirements: (i)
the corporation has more than 10,000 or 10% of its shareholders resident in Tennessee or more than
10% of its shares held by shareholders who are Tennessee residents; (ii) the corporation has its
principal office or place of business located in Tennessee; (iii) the corporation has the principal
office or place of business of a significant subsidiary, representing not less than 25% of the
corporation consolidated net sales located in Tennessee; (iv) the corporation employs more than 250
individuals in Tennessee or has a combined annual payroll paid to Tennessee residents which is in
excess of $5.0 million; (v) the corporation produces goods and services in Tennessee which result
in annual gross receipts in excess of $10.0 million; or (vi) the corporation has physical assets
and/or deposits, including those of any subsidiary located within Tennessee which exceed $10.0
million in value. Athens Bancshares Corporation has elected not to be governed by the Tennessee
Business Combination Act.
Anti-Greenmail Statute.
The Tennessee Greenmail Act prohibits a Tennessee corporation having
a class of voting stock registered or traded on a national securities exchange or registered under
Section 12(g) of the Securities Exchange Act of 1934 from purchasing, directly or indirectly, any
of its shares at a price above the market value of that shares from any person who holds more than
3% of the class of securities to be purchased if that person has held such shares for less than two
years, unless: (i) the purchase has been approved by the affirmative vote of a majority of the
outstanding shares of each class of voting stock issued by the corporation; or (ii) the corporation
makes an offer, at least equal value per share, to all holders of shares of such class. Any person
who sells securities to a corporation in violation of the Tennessee Greenmail Act will be liable to
the corporation for an amount equal to two times the amount by which the purchase price exceeds the
amount permitted by the statute. For purposes of the Tennessee Greenmail Act, market value is
defined as the average of the highest and lowest closing market price of such shares during the 30
trading days preceding the purchase or preceding the commencement or announcement of a tender offer
if the seller of such shares has commenced a tender offer or announced an intention to seek control
of the corporation.
Since the common stock of Athens Bancshares Corporation will be traded on a national
securities exchange, the Athens Bancshares Corporation will be subject to the restrictions of the
Tennessee Greenmail Act after the completion of the stock offering.
Investor Protection Act.
The Tennessee Investor Protection Act prohibits any party owning,
directly or indirectly, 5% or more of any class of equity securities of an "offeree company," any
of which were purchased within one year before the proposed takeover offer from making a tender
offer that would result in their becoming the beneficial owner of more than 10% of the offeree
company's outstanding equity securities, unless the offeror: (i) before making such purchase, had
made a public announcement of his intention to change or influence the management or control of the
"offeree company"; (ii) has made a full, fair and effective disclosure of his intention to the
persons from whom he acquired such securities; and (iii) has filed with the Tennessee Commissioner
of Commerce and Insurance and with the "offeree company" a statement signifying such intentions and
containing such additional information as a Commissioner may require. For purposes of the Investor
Protection Act, an "offeree company" is defined as a corporation or other issuer of equity
securities which is incorporated or organized under the laws of Tennessee or has its principal
office in Tennessee, has substantial assets located in Tennessee and which is or may be involved in
a takeover offer relating to any class of its equity securities.
The Investor Protection Act also prohibits any offeror from making a takeover offer which is
not made to the holders of record or beneficial owners of the equity securities of an offeree
company who reside in Tennessee on substantially the same terms as the offer is made to holders
residing elsewhere. The Investor Protection Act also imposes certain other restrictions on
takeover offers involving offeree companies. Athens Bancshares Corporation is a Tennessee
corporation and will have its principal office and substantial assets located in Tennessee.
Accordingly, Athens Bancshares Corporation would be an offeree company entitled to the protections
of the Tennessee Investor Protection Act if it becomes involved in a takeover offer relating to a
class of its equity securities.
120
Table of Contents
Restrictions in Athens Federal Community Bank's Federal Stock Charter and Bylaws
Although the board of directors of Athens Federal Community Bank is not aware of any effort
that might be made to obtain control of Athens Federal Community Bank after its conversion to the
stock form of ownership, the board of directors believes it is appropriate to adopt certain
provisions permitted by federal regulations that may have the effect of deterring a future takeover
attempt that is not approved by Athens Federal Community Bank's board of directors. The following
description of these provisions is only a summary and does not provide all of the information
contained in Athens Federal Community Bank's proposed federal stock charter and bylaws.
Beneficial Ownership Limitation.
Athens Federal Community Bank's charter provides that, for a
period of five years from the date of the conversion, no person, other than Athens Bancshares
Corporation, may acquire directly or indirectly the beneficial ownership of more than 10% of any
class of any equity security of Athens Federal Community Bank. If a person acquires shares in
violation of this provision, all shares beneficially owned by such person in excess of 10% will be
considered "excess shares" and will not be counted as shares entitled to vote or counted as voting
shares in connection with any matters submitted to the shareholders for a vote.
Board of Directors.
Classified Board.
Athens Federal Community Bank's board of directors is divided into three
classes as nearly as equal in number as possible. The shareholders elect one class of directors
each year for a term of three years. The classified board makes it more difficult and time
consuming for a shareholder group to fully use its voting power to gain control of the board of
directors without the consent of the incumbent board of directors of Athens Federal Community Bank.
Filling of Vacancies; Removal.
The bylaws provide that any vacancy occurring in the board of
directors, including a vacancy created by an increase in the number of directors, may be filled by
a vote of a majority of the remaining directors although less than a quorum of the board of
directors then in office. A person elected to fill a vacancy on the board of directors will serve
until the next election of directors by the shareholders. Athens Federal Community Bank's bylaws
provide that a director may be removed from the board of directors before the expiration of his or
her term only for cause and only upon the vote of the holders of at least 80% of the outstanding
shares of voting stock. These provisions make it more difficult for shareholders to remove
directors and replace them with their own nominees.
Elimination of Cumulative Voting.
The charter of Athens Federal Community Bank does not
provide for cumulative voting with respect to the election of directors. The elimination of
cumulative voting makes it more difficult for a shareholder group to elect a director nominee.
Authorized but Unissued Shares of Capital Stock.
Following the conversion, Athens Federal
Community Bank will have authorized but unissued shares of common and preferred stock. Athens
Federal Community Bank's charter authorizes the board of directors to establish one or more series
of preferred stock and, for any series of preferred stock, to determine the terms and rights of the
series, including voting rights, conversion rates, and liquidation preferences. Such shares of
common and preferred stock could be issued by the board of directors to render more difficult or to
discourage an attempt to obtain control of Athens Federal Community Bank by means of a merger,
tender offer, proxy contest or otherwise.
Regulatory Restrictions
Office of Thrift Supervision Regulations.
Regulations of the Office of Thrift Supervision
provide that, for a period of three years following the date of the completion of the conversion,
no person, acting singly or together with associates in a group of persons acting in concert, will
directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any
class of any equity security of Athens Bancshares Corporation without the prior written approval of
the Office of Thrift Supervision. Where any person, directly or indirectly, acquires beneficial
ownership of more than 10% of any class of any equity security of Athens Bancshares Corporation
without the prior written approval of the Office of Thrift Supervision, the securities beneficially
owned by such person in excess of 10% will not be voted by any person or counted as voting shares
in connection with any
121
Table of Contents
matter submitted to the shareholders for a vote, and will not be counted as outstanding for
purposes of determining the affirmative vote necessary to approve any matter submitted to the
shareholders for a vote.
Change in Bank Control Act.
The acquisition of 10% or more of the common stock outstanding
may trigger the provisions of the Change in Bank Control Act, a federal law. The Office of Thrift
Supervision has also adopted a regulation under the Change in Bank Control Act which generally
requires persons who at any time intend to acquire control of a federally chartered savings
association, including a converted savings and loan association such as Athens Federal Community
Bank, to provide 60 days prior written notice and certain financial and other information to the
Office of Thrift Supervision.
The 60-day notice period does not commence until the information is deemed to be substantially
complete. Control for the purpose of this Act exists in situations in which the acquiring party
has voting control of at least 25% of any class of Athens Bancshares Corporation's voting stock or
the power to direct the management or policies of Athens Bancshares Corporation. However, under
Office of Thrift Supervision regulations, "control" is presumed to exist where the acquiring party
has voting control of at least 10% of any class of Athens Bancshares Corporation's voting
securities if specified "control factors" are present. The statute and underlying regulations
authorize the Office of Thrift Supervision to disapprove a proposed acquisition on certain
specified grounds.
Description of Athens Bancshares Corporation Capital Stock
The common stock of Athens Bancshares Corporation will represent
nonwithdrawable capital, will not be an account of any type, and will not be
insured by the Federal Deposit Insurance Corporation or any other government
agency.
General
Athens Bancshares Corporation is authorized to issue fifty million (50,000,000) shares of
common stock having a par value of $0.01 per share and ten million (10,000,000) shares of preferred
stock having a par value of $0.01 per share. Each share of Athens Bancshares Corporation's common
stock will have the same relative rights as, and will be identical in all respects with, each other
share of common stock. Upon payment of the purchase price for the common stock, as required by the
plan of conversion, all stock will be duly authorized, fully paid and nonassessable. Athens
Bancshares Corporation will not issue any shares of preferred stock in the conversion.
Common Stock
Dividends.
Athens Bancshares Corporation can pay dividends on its common stock if, after
giving effect to the distribution, it would be able to pay its indebtedness as the indebtedness
comes due in the usual course of business and its total assets exceed the sum of its liabilities
and the amount needed, if Athens Bancshares Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock
who have a preference upon dissolution. The holders of common stock of Athens Bancshares
Corporation will be entitled to receive and share equally in dividends as may be declared by the
board of directors of Athens Bancshares Corporation out of funds legally available for dividends.
If Athens Bancshares Corporation issues preferred stock, the holders of the preferred stock may
have a priority over the holders of the common stock with respect to dividends. See "
Our Dividend
Policy"
and
"Regulation and Supervision."
Voting Rights.
After the conversion, the holders of common stock of Athens Bancshares
Corporation will possess exclusive voting rights in Athens Bancshares Corporation. They will elect
Athens Bancshares Corporation's board of directors and act on other matters as are required to be
presented to them under Tennessee law or as are otherwise presented to them by the board of
directors. Except as discussed under
"Restrictions on the Acquisition of Athens Bancshares
Corporation and Athens Federal Community Bank—Restrictions in Athens Bancshares Corporation's
Charter and Bylaws—Limitations on Voting Rights,"
each holder of common stock will be entitled to
one vote per share and will not have any right to cumulate votes in the election of directors. If
Athens Bancshares Corporation issues preferred stock, holders of Athens Bancshares Corporation
preferred stock may also possess voting rights.
122
Table of Contents
Liquidation.
If there is any liquidation, dissolution or winding up of Athens Federal
Community Bank, Athens Bancshares Corporation, as the sole holder of Athens Federal Community
Bank's capital stock, would be entitled to receive all of Athens Federal Community Bank's assets
available for distribution after payment or provision for payment of all debts and liabilities of
Athens Federal Community Bank, including all deposit accounts and accrued interest. Upon
liquidation, dissolution or winding up of Athens Bancshares Corporation, the holders of its common
stock would be entitled to receive all of the assets of Athens Bancshares Corporation available for
distribution after payment or provision for payment of all its debts and liabilities. If Athens
Bancshares Corporation issues preferred stock, the preferred stock holders may have a priority over
the holders of the common stock upon liquidation or dissolution.
Preemptive Rights; Redemption.
Holders of the common stock of Athens Bancshares Corporation
will not be entitled to preemptive rights with respect to any shares that may be issued. The
common stock cannot be redeemed.
Preferred Stock
Athens Bancshares Corporation will not issue any preferred stock in the conversion and it has
no current plans to issue any preferred stock after the conversion. Preferred stock may be issued
with designations, powers, preferences and rights as the board of directors may from time to time
determine. The board of directors can, without shareholder approval, issue preferred stock with
voting, dividend, liquidation and conversion rights that could dilute the voting strength of the
holders of the common stock and may assist management in impeding an unfriendly takeover or
attempted change in control.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock will be
.
Registration Requirements
We have registered our common stock with the Securities and Exchange Commission under Section
12(b) of the Securities Exchange Act of 1934, as amended, and will not deregister our common stock
for a period of at least three years following the offering. As a result of registration, the
proxy and tender offer rules, insider trading reporting and restrictions, annual and periodic
reporting and other requirements of that statute will apply.
Legal and Tax Opinions
The legality of our common stock has been passed upon for us by Kilpatrick Stockton LLP,
Washington, D.C. The federal tax consequences of the conversion have been opined upon by
Kilpatrick Stockton LLP and the state tax consequences of the conversion have been opined upon by
Hazlett, Lewis & Bieter, PLLC. Kilpatrick Stockton LLP and Hazlett, Lewis & Bieter, PLLC have
consented to the references to its opinions in this prospectus. Certain legal matters will be
passed upon for Keefe, Bruyette & Woods, Inc. by Silver, Freedman & Taff, L.L.P., Washington, D.C.
Experts
The consolidated financial statements of Athens Federal Community Bank as of December 31, 2008
and 2007, and for each of the years in the two year period ended December 31, 2008 included in this
prospectus and in the registration statement have been audited by Hazlett, Lewis & Bieter, PLLC, an
independent registered public accounting firm, as stated in its report appearing herein and
elsewhere in the registration statement (which report expresses an unqualified opinion), and has
been so included in reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
123
Table of Contents
Keller & Company, Inc. has consented to the summary in this prospectus of its report to us
setting forth its opinion as to our estimated pro forma market value and to the use of its name and
statements with respect to it appearing in this prospectus.
Where You Can Find More Information
We have filed with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended, that registers the common stock offered in the stock offering,
including the shares to be issued to the charitable foundation. This prospectus forms a part of
the registration statement. The registration statement, including the exhibits, contains
additional relevant information about us and our common stock. The rules and regulations of the
Securities and Exchange Commission allow us to omit certain information included in the
registration statement from this prospectus. You may read and copy the registration statement at
the Securities and Exchange Commission's public reference room at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the Securities and Exchange Commission's public reference rooms. The
registration statement also is available to the public from commercial document retrieval services
and at the Internet World Wide Website maintained by the Securities and Exchange Commission at
http://www.sec.gov.
Athens Federal Community Bank has filed an application for approval of the plan of conversion
with the Office of Thrift Supervision. This prospectus omits certain information contained in the
application. The application may be inspected, without charge, at the offices of the Office of
Thrift Supervision, 1700 G Street, NW, Washington, D.C. 20552 and at the offices of the Regional
Director of the Office of Thrift Supervision at the Southeast Regional Office of the Office of
Thrift Supervision, 1475 Peachtree Street, N.E., Atlanta, Georgia 30309.
A copy of the plan of conversion and Athens Bancshares Corporation's charter and bylaws are
available without charge from Athens Federal Community Bank.
The appraisal report of Keller & Company, Inc. has been filed as an exhibit to our
registration statement and to our application to the Office of Thrift Supervision. Portions of the
appraisal report were filed electronically with the Securities and Exchange Commission and are
available on its website as described above. The entire appraisal report is available at the
public reference room of the Securities and Exchange Commission and the offices of the Office of
Thrift Supervision as described above.
124
Table of Contents
Index to Consolidated Financial Statements
of Athens Federal Community Bank
Page
Report of Independent Registered Public Accounting Firm
F-l
Consolidated Balance Sheets as of June 30, 2009 (unaudited) and December 31, 2008 and 2007
F-2
Consolidated Statements of Income for the Six Months Ended
June 30, 2009 and 2008 (unaudited) and the Years Ended December 31, 2008 and 2007
F-3
Consolidated Statements of Changes in Equity for the Six Months Ended
June 30, 2009 (unaudited) and the Years Ended December 31, 2008 and 2007
F-4
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2009 and 2008 (unaudited) and the Years Ended December 31, 2008 and 2007
F-5
Notes to Consolidated Financial Statements
F-6
****
All schedules are omitted as the required information either is not applicable or is included
in the financial statements or related notes. Separate financial statements for Athens Bancshares
Corporation have not been included in this prospectus because Athens Bancshares Corporation, which
has engaged only in organizational activities to date, has no significant assets, contingent or
other liabilities, revenues or expenses.
125
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors
Athens Federal Community Bank
Athens, Tennessee
We have audited the accompanying consolidated balance sheets of Athens Federal Community Bank
and subsidiaries (Bank) as of December 31, 2008 and 2007, and the related consolidated statements
of income, changes in equity and cash flows for the years then ended. These financial statements
are the responsibility of the Bank's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Athens Federal Community Bank and subsidiaries as of
December 31, 2008 and 2007, and the results of their operations and their cash flows for the years
then ended in conformity with U.S. generally accepted accounting principles.
/s/ HAZLETT, LEWIS & BIETER, PLLC
Chattanooga, Tennessee
September 11, 2009
F-1
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,
December 31,
2009
2008
2007
ASSETS
Cash and due from banks
$
3,811,439
$
4,547,478
$
9,284,410
Federal funds sold
5,950,000
—
—
Total cash and cash equivalents
9,761,439
4,547,478
9,284,410
Interest-bearing deposits in banks
981,000
1,881,000
—
Securities available for sale
22,621,077
30,509,092
22,966,937
Securities held to maturity (fair value approximates $1,624,
$4,961 and $14,517 at June 30, 2009 (unaudited), December 31,
2008 and December 31, 2007, respectively)
1,624
4,961
14,449
Investments, at cost
2,898,800
2,898,800
4,746,000
Loans, net of allowance for loan losses of $2,757,596, $3,082,602
and $2,536,097 at June 30, 2009 (unaudited), December 31,
2008 and December 31, 2007, respectively
192,217,297
196,519,657
178,603,012
Premises and equipment, net
5,090,127
5,343,364
5,864,638
Accrued interest receivable
1,023,668
1,150,013
1,245,724
Cash surrender value of bank owned life insurance
6,353,869
6,245,790
6,020,203
Foreclosed real estate
252,200
230,491
—
Other assets
1,809,424
1,669,426
1,759,167
Total assets
$
243,010,525
$
251,000,072
$
230,504,540
LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest-bearing
$
7,963,643
$
7,288,603
$
7,807,180
Interest-bearing
194,956,668
199,204,715
189,536,909
Total deposits
202,920,311
206,493,318
197,344,089
Accrued interest payable
347,132
418,181
454,450
Securities sold under agreements to repurchase
971,737
911,658
1,150,972
Federal Home Loan Bank advances
10,377,751
16,310,272
5,532,273
Accrued expenses and other liabilities
3,062,587
2,654,746
2,752,239
Total liabilities
217,679,518
226,788,175
207,234,023
COMMITMENTS AND CONTINGENCIES
EQUITY
Accumulated other comprehensive income
93,535
58,054
(7,039
)
Retained earnings
25,237,472
24,153,843
23,277,556
Total equity
25,331,007
24,211,897
23,270,517
Total liabilities and equity
$
243,010,525
$
251,000,072
$
230,504,540
The accompanying notes are an integral part of these consolidated financial statements.
F-2
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Six Months Ended June 30,
Years Ended December 31,
2009
2008
2008
2007
Interest and dividend income:
Loans, including fees
$
6,799,344
$
6,946,267
$
13,824,469
$
13,421,048
Dividends
73,450
78,518
153,062
203,746
Securities and interest-bearing deposits in other banks
638,249
811,378
1,602,878
1,832,581
Total interest income
7,511,043
7,836,163
15,580,409
15,457,375
Interest expense:
Deposits
2,786,070
3,517,454
6,744,227
6,609,086
Federal funds purchased and securities sold under
agreements to repurchase
4,708
15,001
22,720
36,254
Federal Home Loan Bank advances
212,510
142,840
366,061
455,695
Total interest expense
3,003,288
3,675,295
7,133,008
7,101,035
Net interest income
4,507,755
4,160,868
8,447,401
8,356,340
Provision for loan losses
117,733
287,036
760,803
442,895
Net interest income after provision for loan losses
4,390,022
3,873,832
7,686,598
7,913,445
Noninterest income:
Customer service fees
810,135
766,116
1,621,943
1,329,843
Other charges and fees
963,682
986,744
1,775,629
2,087,814
Investment sales commissions
100,725
173,098
288,865
279,721
Increase in cash surrender value of life insurance
126,457
126,516
256,153
223,649
Other noninterest income
487,399
131,241
218,252
108,756
Total noninterest income
2,488,398
2,183,715
4,160,842
4,029,783
Noninterest expenses:
Salaries and employee benefits
2,914,647
3,140,816
5,638,138
5,818,740
Occupancy and equipment
737,495
798,392
1,613,481
1,625,824
Federal deposit insurance premiums
268,751
11,085
82,630
20,951
Data processing
299,963
408,804
742,967
657,433
Advertising
74,227
129,724
227,293
331,698
Other operating expenses
1,094,018
952,798
1,946,271
1,976,834
Total noninterest expenses
5,389,101
5,441,619
10,250,780
10,431,480
Income before income taxes
1,489,319
615,928
1,596,660
1,511,748
Income taxes
405,690
152,968
487,253
391,802
Net income
$
1,083,629
$
462,960
$
1,109,407
$
1,119,946
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Six Months Ended June 30, 2009 (Unaudited) and Years Ended December 31, 2008 and 2007
Accumulated
Other
Comprehensive
Retained
Comprehensive
Income
Earnings
Income
Total
Balance, December 31, 2006
$
22,157,610
$
(278,230
)
$
21,879,380
Comprehensive income:
Net income
$
1,119,946
1,119,946
—
1,119,946
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on securities
available for sale, net of tax effect of $166,214
271,191
—
271,191
271,191
Total comprehensive income
$
1,391,137
Balance, December 31, 2007
23,277,556
(7,039
)
23,270,517
Cumulative effect of change in accounting principle
(233,120
)
—
(233,120
)
Comprehensive income:
Net income
$
1,109,407
1,109,407
—
1,109,407
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on securities
available for sale, net of tax effect of $39,890
65,093
—
65,093
65,093
Total comprehensive income
$
1,174,500
Balance, December 31, 2008
24,153,843
58,054
24,211,897
Comprehensive income:
Net income
$
1,083,629
1,083,629
—
1,083,629
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on securities
available for sale, net of tax effect of $21,752
35,481
—
35,481
35,481
Total comprehensive income
$
1,119,110
Balance, June 30, 2009
$
25,237,472
$
93,535
$
25,331,007
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
Years Ended December 31,
2009
2008
2008
2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
1,083,629
$
462,960
$
1,109,407
$
1,119,946
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation
325,042
374,338
763,939
837,351
Amortization of securities and other assets
114,907
117,340
255,855
222,829
Provision for loan losses
117,733
287,036
760,803
442,895
Other gains and losses, net
—
—
(10,296
)
2,644
Federal Home Loan Bank stock dividends
—
(74,300
)
(112,800
)
—
Net change in:
Cash surrender value of life insurance
(108,079
)
(109,716
)
(225,587
)
(214,756
)
Loans held for sale
(65,709
)
(242,682
)
(83,011
)
(162,085
)
Accrued interest receivable
126,345
51,690
95,711
(291,520
)
Accrued interest payable
(71,049
)
(39,178
)
(36,269
)
133,989
Other assets and liabilities
186,646
(56,912
)
(398,753
)
242,918
Net cash provided by operating activities
1,709,465
770,576
2,118,999
2,334,211
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in interest-bearing deposits in banks
900,000
(1,980,000
)
(1,881,000
)
5,000,000
Securities available for sale:
Purchases
—
(14,674,963
)
(16,687,862
)
(8,677,971
)
Maturities, prepayments and calls
7,907,286
4,718,900
8,941,411
7,524,949
Sales
—
—
212,632
—
Securities held to maturity:
Principal repayments received
3,337
4,498
9,486
10,438
Loan originations and principal collections, net
4,211,127
(6,342,460
)
(18,855,847
)
(21,795,736
)
Purchases of premises and equipment
(71,805
)
(167,944
)
(251,262
)
(935,398
)
Proceeds from sales of premises and equipment
and other assets
—
—
8,597
2,868
Purchase of investments, at cost
—
—
—
(3,600,000
)
Redemption of investments, at cost
—
960,000
1,960,000
4,930,000
Net cash provided by (used in) investing activities
12,949,945
(17,481,969
)
(26,543,845
)
(17,540,850
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposits
(3,573,007
)
7,569,197
9,149,229
26,129,864
Net increase (decrease) in securities sold under
agreements to repurchase
60,079
247,266
(239,314
)
(530,181
)
Proceeds from Federal Home Loan Bank advances
7,150,000
6,900,000
44,530,000
925,000
Repayment of Federal Home Loan Bank advances
(13,082,521
)
(1,150,501
)
(33,752,001
)
(11,023,077
)
Net cash (used in) provided by financing activities
(9,445,449
)
13,565,962
19,687,914
15,501,606
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
5,213,961
(3,145,431
)
(4,736,932
)
294,967
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD
4,547,478
9,284,410
9,284,410
8,989,443
CASH AND CASH EQUIVALENTS, END
OF PERIOD
$
9,761,439
$
6,138,979
$
4,547,478
$
9,284,410
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest paid on deposits and borrowed funds
$
3,074,337
$
3,714,473
$
7,169,277
$
6,967,046
Income taxes paid
575,911
241,274
531,854
960,121
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING ACTIVITIES:
Acquisition of real estate acquired through
foreclosure
$
21,709
$
—
$
230,491
$
—
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
The accounting and reporting policies of Athens Federal Community
Bank (Bank) and subsidiaries conform with accounting principles
generally accepted in the United States of America and accepted
accounting and reporting practices within the banking industry.
The significant accounting policies are summarized as follows:
Principles of consolidation
The consolidated financial statements of Athens Federal Community Bank and subsidiaries
include the Bank and its wholly-owned subsidiaries: Southland Finance, Inc. (Southland)
and Ti-Serv, Inc. All material intercompany accounts and transactions have been
eliminated in consolidation.
Nature of operations
The Bank provides a variety of financial services to individuals and corporate
customers through its seven branches located in Athens, Sweetwater, Etowah,
Madisonville, and Cleveland, Tennessee. The Bank's primary deposit products include
checking, savings, certificates of deposit, and IRA accounts. Its primary lending
products are one-to-four family residential, commercial real estate, and consumer
loans. Southland is a consumer finance company with one branch located in Athens,
Tennessee. Ti-Serv, Inc. maintains the Bank's investment in Valley Title Services, LLC
and provides appraisal and title insurance services.
Use of estimates
The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. A
material estimate that is particularly susceptible to significant change in the near
term relates to the determination of the allowance for loan losses.
Cash and cash equivalents
For purposes of the consolidated statements of cash flows, cash and cash equivalents
include cash and balances due from banks, money market mutual funds and federal funds
sold and securities purchased under agreements to resell, all of which mature within
ninety days.
Interest-bearing deposits in banks
Interest-bearing deposits in banks have a maturity of one year or less and are carried
at cost.
F-6
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Securities
Debt securities are classified as held to maturity when the Bank has the intent and
ability to hold the securities to maturity. Securities held to maturity are carried at
amortized cost. The amortization of premiums and accretion of discounts are recognized
in interest income using methods approximating the interest method over the period to
maturity.
Debt securities not classified as held to maturity are classified as available for
sale. Securities available for sale are carried at market value with unrealized gains
and losses reported in other comprehensive income. Realized gains and losses on
securities available for sale are included in other income and, when applicable, are
reported as a reclassification adjustment, net of tax, in other comprehensive income.
Declines in the market value of held to maturity and available for sale securities
below their cost that are deemed to be other than temporary are reflected in earnings
as realized losses. In estimating other than temporary impairment losses, management
considers (1) the length of time and the extent to which the market value has been less
than cost, (2) the financial condition and near-term prospects of the issuer, and (3)
the intent and ability of the Bank to retain its investment in the issuer for a period
of time sufficient to allow for any anticipated recovery in market value. Gains and
losses on the sale of securities are recorded on the trade date and are determined
using the specific identification method.
Loans
The Bank grants mortgage, commercial and consumer loans to customers. A substantial
portion of the loan portfolio is represented by mortgage and commercial real estate
loans located primarily in the East Tennessee area. The ability of the Bank's debtors
to honor their contracts is dependent upon the real estate and general economic
conditions in this area.
Loans that management has the intent and ability to hold for the foreseeable future or
until maturity or pay-off generally are stated at unpaid principal balances, less the
allowance for loan losses, net deferred loan organization fees and costs, and unearned
interest and fees.
Loan fees, net of estimated initial direct cost relating to initiating and closing
mortgage loans, have been deferred and are being amortized into interest income over
the remaining lives of the loans as an adjustment of yield using the level yield
method.
Unearned interest on consumer finance loans is recognized as income over the terms of
the loans using a declining balance method. Interest on other loans is calculated
using the simple interest method on the principal outstanding.
F-7
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Loans
(Continued)
The accrual of interest on mortgage and commercial loans is discontinued at the time
the loan is 90 days past due unless the credit is well-secured and in process of
collection. Other personal loans are typically charged off no later than 120 days past
due. Past due status is based on contractual terms of the loan. In all cases, loans
are placed on nonaccrual or charged off at an earlier date if collection of principal
or interest is considered doubtful.
All interest accrued but not collected for loans that are placed on non-accrual or
charged off is reversed against interest income. The interest on these loans is
accounted for on the cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all the principal and interest
amounts contractually due are brought current and future payments are reasonably
assured.
Allowance for loan losses
The allowance for loan losses is established as losses are estimated to have occurred
through a provision for loan losses charged to earnings. Loan losses are charged
against the allowance when management believes the uncollectibility of a loan balance
is confirmed. Subsequent recoveries, if any, are credited to the allowance.
The allowance for loan losses is evaluated on a regular basis by management and is
based upon management's periodic review of the collectibility of the loans in light of
historical experience, the nature and volume of the loan portfolio, adverse situations
that may affect the borrower's ability to repay, estimated value of any underlying
collateral, and prevailing economic conditions. This evaluation is inherently
subjective as it requires estimates that are susceptible to significant revision as
more information becomes available.
The allowance consists of specific, general and unallocated components. The specific
component relates to loans that are classified as doubtful, substandard or special
mention. For such loans that are also classified as impaired, an allowance is
established when the discounted cash flows (or collateral value or observable market
price) of the impaired loan is lower than the carrying value of that loan. The general
component covers non-classified loans and is based on historical loss experience
adjusted for qualitative factors. An unallocated component is maintained to cover
uncertainties that could affect management's estimate of probable losses. The
unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions
used in the methodologies for estimating specific and general losses in the portfolio.
F-8
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Allowance for loan losses
(Continued)
A loan is considered impaired when, based on current information and events, it is
probable the Bank will be unable to collect the scheduled payments of principal or
interest when due according to contractual terms of the loan agreement. Factors
considered by management in determining impairment include payment status, collateral
value, and the probability of collecting scheduled principal and interest payments when
due. Loans that experience insignificant payment delays and payment shortfalls are not
classified as impaired. Management determines the significance of payment delays and
payment shortfalls on a case-by-case basis, taking into consideration all of the
circumstances surrounding the loan and the borrower, including the length of the delay,
the reasons for the delay, the borrower's prior payment record, and the amount of the
shortfall in relation to the principal and interest owed. Impairment is measured on a
loan-by-loan basis by either the present value of future cash flows discounted at the
loan's effective interest rate, the loan's obtainable market price, or the fair value
of the collateral if the loan is collateral dependent.
Large groups of smaller balance homogeneous loans are collectively evaluated for
impairment. Accordingly, the Bank does not separately identify individual consumer
loans for impairment disclosures, unless such loans are the subject of a restructuring
agreement.
Servicing
Generally, servicing assets are recognized as separate assets when rights are acquired
through purchase or through sale of financial assets. For sales of mortgage loans, a
portion of the cost of originating the loan is allocated to the servicing right based
on relative fair value. Fair value is based on market prices for comparable mortgage
servicing contracts, when available, or alternatively, is based on a valuation model
that calculates the present value of estimated future net servicing income. The
valuation model incorporates assumptions that market participants would use in
estimating future net servicing income, such as the cost to service, the discount rate,
the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds,
and default rates and losses.
The Bank has not recorded any servicing assets or liabilities in accordance with SFAS
140 because the benefits received for servicing approximate the costs incurred by the
Bank for its servicing responsibilities.
Servicing fee income is recorded for fees earned for servicing loans. The fees are
based on a contractual percentage of the outstanding principal; or a fixed amount per
loan and are recorded as income when earned. The amortization of mortgage servicing rights is
netted against loan servicing fee income.
Subsequent events
Management performed an evaluation of subsequent events through September 11, 2009, the
date these financial statements were issued.
F-9
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Foreclosed real estate
Assets acquired through, or in lieu of, loan foreclosures are held for sale and are
initially recorded at fair value less cost to sell at the date of foreclosure,
establishing a new cost basis. Subsequent to foreclosure, valuations are periodically
performed by management and the assets are carried at the lower of carrying amount or
fair value less cost to sell. Revenue and expenses from operations and changes in the
valuation allowance are included in net expenses from foreclosed assets.
Premises and equipment
Land is carried at cost. Other premises and equipment are stated at cost less
accumulated depreciation. Depreciation, computed using a combination of accelerated
and straight-line methods, is based on estimated useful lives of three to forty years.
Maintenance and repairs are expensed as incurred while major additions and improvements
are capitalized. Gains and losses on dispositions are included in current operations.
Investments, at cost
Investments carried at cost include the Bank's required investment in the Federal Home
Loan Bank of Cincinnati as well as other investments that are carried at cost due to
the lack of a readily determinable market value and no established market price.
Income taxes
Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. Deferred tax
assets and liabilities are measured using enacted tax rates in effect for the year in
which the temporary differences are expected to be recovered or settled.
Advertising costs
Advertising costs are expensed as incurred.
Segment reporting
Statement of Financial Accounting Standards ("SFAS") No. 131,
Disclosures About
Segments of an Enterprise and Related Information ("SFAS 131")
, provides for the
identification of reportable segments on the basis of discrete business units and their
financial information to the extent such units are reviewed by an entity's chief
decision maker (which can be an individual or group of management persons). The
Statement permits aggregation or combination of segments that have similar
characteristics. In the operations of the Bank and its subsidiaries, each bank branch
is viewed by management as being a separately identifiable business or segment from the
perspective of monitoring performance and allocation of financial resources. Although
the branches
F-10
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Segment reporting
(Continued)
operate independently and are managed and monitored separately, each is substantially
similar in terms of business focus, type of customers, products, and services.
Further, the results of Southland and Ti-Serv, Inc. for the six months ended June 30,
2009 and 2008, and the years ended December 31, 2008 and 2007, were not significant for
separate disclosure. Accordingly, the Bank's consolidated financial statements reflect
the presentation of segment information on an aggregated basis in one reportable
segment.
Transfers of financial assets
Transfers of financial assets are accounted for as sales, when control over the assets
has been surrendered. Control over transferred assets is deemed to be surrendered when
(1) the assets have been isolated from the Bank, (2) the transferee obtains the right
(free of conditions that constrain it from taking advantage of that right) to pledge or
exchange the transferred assets, and (3) the Bank does not maintain effective control
over the transferred assets through an agreement to repurchase them before their
maturity.
Recent accounting pronouncements
In March 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 156,
Accounting for Servicing of Financial Assets
, ("SFAS 156") an Amendment of SFAS No.
140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities
, ("SFAS 140") which requires that all separately recognized servicing
assets and liabilities be initially measured at fair value, if practicable, and
requires entities to elect either fair value measurement with changes in fair value
reflected in earnings or the amortization and impairment requirements of Statement 140
for subsequent measurement. SFAS 156 is effective as of the beginning of an entity's
first fiscal year that begins after September 15, 2006. The Bank adopted SFAS 156 on
January 1, 2007. The adoption of SFAS 156 did not have a significant impact on the
consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements
("SFAS
157"). SFAS 157 defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements. SFAS 157 applies
only to fair-value measurements that are already required or permitted by other
accounting standards and is expected to increase the consistency of those
measurements. The statement emphasizes that fair value is a market-based
measurement; not an entity-specific measurement. Therefore, the fair value measurement should be determined based
on the assumptions that market participants would use in pricing the asset or
liability. The effective date for SFAS 157 was for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. The
Bank adopted SFAS 157 effective January 1, 2008.
F-11
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Recent accounting pronouncements
(Continued)
In September 2006, the FASB ratified a consensus opinion reached by the Emerging Issues Task Force
("EITF") on Issue No. 06-04,
Accounting for Deferred Compensation and Postretirement Benefit Aspects of
Endorsement Split-Dollar Life Insurance Arrangements,
("EITF 06-04") which requires employers that enter
into endorsement split-dollar life insurance arrangements that provide an employee with a postretirement
benefit to recognize a liability for the future benefits promised based on the substantive agreement made
with the employer. Whether the accrual is based on a death benefit or on the future cost of maintaining
the insurance would depend on what the employer has effectively agreed to provide during the employee's
retirement. The purchase of an endorsement-type life insurance policy does not qualify as a settlement
of the liability. The consensus in EITF 06-4 is
effective for
fiscal years
beginning after
December 15, 2007.
In adopting EITF
06-4, the Bank
recorded a
liability of
$233,120 as of
January 1, 2008,
with a
corresponding
offset against
retained earnings.
In February 2007, the FASB issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial
Liabilities,
("SFAS 159"). This statement permits entities to choose to measure many financial
instruments and certain other items at fair value. The objective of this standard is to improve
financial reporting by providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without having to apply complex
hedge accounting provisions. This statement was effective as of January 1, 2008; however, it had no
impact on the consolidated financial statements because management did not elect the fair value option
for any financial instrument not presently being accounted for at fair value.
In March 2007, the EITF reached a final consensus on
Issue No. 06-10,
Accounting for Deferred Compensation
and Postretirement Benefit Aspects of Collateral
Assignment Split-Dollar Life Insurance Arrangements
,
("EITF 06-10"). EITF 06-10 requires employers to
recognize a liability for the post-retirement benefit
related to collateral assignment split-dollar life
insurance arrangements in accordance with SFAS 106 or
APB Opinion 12. EITF 06-10 also requires employers
to recognize and measure an asset based on the
nature and
substance of the
collateral
assignment
split-dollar life
insurance
arrangement. The
provisions of EITF
06-10 were
effective on
January 1, 2008.
EITF 06-10 had no
impact on the
consolidated
financial
statements.
In October 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 157-3,
Determining
the Fair Value of a Financial Asset When The Market for That Asset Is Not Active,
("FSP
157-3"). This FSP clarifies the application of SFAS 157 in a market that is not active
and provides an example to illustrate key considerations in determining the
fair value of a financial asset when the market for that financial asset is not active.
This FSP was effective upon issuance, including prior periods for which financial
statements have not been issued; and, therefore was effective for the consolidated
financial statements as of and for the year ended December 31, 2008. Adoption of FSP
157-3 had no impact on the consolidated financial statements.
F-12
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. Summary of Significant Accounting Policies
(Continued)
Recent accounting pronouncements
(Continued)
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8,
Disclosures about
Transfers of Financial Assets and Interests in Variable Interest Entities,
("FSP 140-4
and 46(R)-8"). This FSP requires additional disclosures by public entities with
continuing involvement in transfers of financial assets to special purpose entities and
with variable interests in VIEs, including sponsors that have a variable interest in a
VIE. Additionally, this FSP requires certain disclosures to be provided by a public
entity that is (1) a sponsor of a qualifying special-purpose entity (SPE) that holds a
variable interest in the qualifying SPE but was not the transferor (nontransferor) of
financial assets to the qualifying SPE, and (2) a servicer of a qualifying SPE that
holds a significant variable interest in the qualifying SPE but was not the transferor
(nontransferor) of financial assets to the qualifying SPE. This FSP is effective for
the first reporting period (interim or annual) that ends after December 15, 2008. The
Bank adopted FSP 140-4 and 46(R)-8 as of December 31, 2008, and its adoption did not
have a significant impact on the consolidated financial statements.
In May 2009, the FASB issued SFAS No. 165,
Subsequent Events
("SFAS 165"). Under SFAS
165, companies are required to evaluate events and transactions that occur after the
balance sheet date but before the date the financial statements are issued, or
available to be issued in the case of non-public entities. SFAS 165 requires entities
to recognize in the financial statements the effect of all events or transactions that
provide additional evidence of conditions that existed at the balance sheet date,
including the estimates inherent in the financial preparation process. Entities shall
not recognize the impact of events or transactions that provide evidence about
conditions that did not exist at the balance sheet date but arose after that date.
SFAS 165 also requires entities to disclose the date through which subsequent events
have been evaluated. SFAS 165 was effective for interim and annual reporting periods
ending after June 15, 2009. The Bank adopted the provisions of SFAS 165 for the
quarter ended June 30, 2009, as required, and adoption did not have a significant
impact on the consolidated financial statements.
Other than disclosures contained within these statements, the Bank has determined that
all other recently issued accounting pronouncements will not have a material impact on
its consolidated financial statements or do not apply to its operations.
Reclassification
Certain amounts in the 2007 and 2008 consolidated financial statements have been
reclassified to conform to the 2009 presentation.
Note 2. Cash and Cash Equivalents
Restrictions on cash and due from banks
The Bank is required to maintain average balances on hand or with the Federal Reserve
Bank. At June 30, 2009, December 31, 2008, and December 31, 2007, these reserve
balances amounted to $350,000 (unaudited), $350,000, and $350,000, respectively.
F-13
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. Securities
The amortized cost and estimated market value of securities classified as available for
sale are as follows:
(Unaudited)
June 30, 2009
Gross
Gross
Amortized
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
Securities Available for Sale:
Securities of U.S.
Government agencies
and corporations
$
4,625,065
$
24,932
$
(10,475
)
$
4,639,522
Mortgage-backed and
related securities
12,304,797
380,335
(16,003
)
12,669,129
State and municipal
securities
5,540,353
5,603
(233,530
)
5,312,426
$
22,470,215
$
410,870
$
(260,008
)
$
22,621,077
Securities Held to Maturity:
Mortgage-backed and
related securities
$
1,624
$
—
$
—
$
1,624
December 31, 2008
Gross
Gross
Amortized
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
Securities Available for Sale:
Securities of U.S.
Government agencies
and corporations
$
10,545,132
$
117,062
$
(13,529
)
$
10,648,665
Mortgage-backed and
related securities
14,326,656
328,282
(71,006
)
14,583,932
State and municipal
securities
5,543,675
2,349
(269,529
)
5,276,495
$
30,415,463
$
447,693
$
(354,064
)
$
30,509,092
Securities Held to Maturity:
Mortgage-backed and
related securities
$
4,961
$
—
$
—
$
4,961
F-14
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. Securities
(Continued)
December 31, 2007
Gross
Gross
Amortized
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
Securities Available for Sale:
Securities of U.S.
Government agencies
and corporations
$
6,743,065
$
—
$
(66,729
)
$
6,676,336
Mortgage-backed and
related securities
12,517,046
151,178
(62,049
)
12,606,175
State and municipal
securities
3,718,180
1,885
(35,639
)
3,684,426
$
22,978,291
$
153,063
$
(164,417
)
$
22,966,937
Securities Held to Maturity:
Mortgage-backed and
related securities
$
14,449
$
70
$
(2
)
$
14,517
The amortized cost and estimated market value of securities at June 30, 2009 and
December 31, 2008, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
(Unaudited)
June 30, 2009
Securities Available for Sale
Securities Held to Maturity
Amortized
Market
Amortized
Market
Cost
Value
Cost
Value
Due in one year or less
$
2,007,383
$
2,012,426
$
—
$
—
Due after one year through
five years
2,389,532
2,357,400
—
—
Due five years to ten years
2,637,567
2,613,065
—
—
Due after ten years
3,130,936
2,969,057
—
—
Mortgage-backed
securities
12,304,797
12,669,129
1,624
1,624
Total
$
22,470,215
$
22,621,077
$
1,624
$
1,624
F-15
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. Securities
(Continued)
December 31, 2008
Securities Available for Sale
Securities Held to Maturity
Amortized
Market
Amortized
Market
Cost
Value
Cost
Value
Due in one year or less
$
6,033,774
$
6,048,259
$
—
$
—
Due after one year through
five years
2,538,238
2,489,262
—
—
Due five years to ten years
4,386,435
4,425,382
—
—
Due after ten years
3,130,360
2,962,257
—
—
Mortgage-backed securities
14,326,656
14,583,932
4,961
4,961
Total
$
30,415,463
$
30,509,092
$
4,961
$
4,961
No realized gains or losses were recognized for the six-month periods ended June 30,
2009 and 2008 (unaudited), or for the years ended December 31, 2008 and 2007,
respectively.
The Bank has pledged securities with carrying values of approximately $14,939,000
(unaudited), $22,612,000, and $17,350,000 (which approximates market values) to secure
deposits of public and private funds as of June 30, 2009, December 31, 2008, and
December 31, 2007, respectively.
Securities with gross unrealized losses at June 30, 2009, December 31, 2008 and December
31, 2007, aggregated by investment category and length of time that individual
securities have been in a continuous loss position, are as follows:
(Unaudited)
June 30, 2009
Less than 12 Months
12 Months or Greater
Total
Gross
Gross
Gross
Market
Unrealized
Market
Unrealized
Market
Unrealized
Value
Losses
Value
Losses
Value
Losses
(dollars in thousands)
Securities Available for Sale:
Securities of U.S.
Government agencies
and corporations
$
—
$
—
$
1,614
$
(10
)
$
1,614
$
(10
)
Mortgage-backed and
related securities
722
(4
)
1,132
(12
)
1,854
(16
)
State and municipal
securities
2,134
(60
)
1,864
(174
)
3,998
(234
)
$
2,856
$
(64
)
$
4,610
$
(196
)
$
7,466
$
(260
)
F-16
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. Securities
(Continued)
December 31, 2008
Less than 12 Months
12 Months or Greater
Total
Gross
Gross
Gross
Market
Unrealized
Market
Unrealized
Market
Unrealized
Value
Losses
Value
Losses
Value
Losses
(dollars in thousands)
Securities Available for Sale:
Securities of U.S.
Government agencies
and corporations
$
1,759
$
(14
)
$
—
$
—
$
1,759
$
(14
)
Mortgage-backed and
related securities
1,958
(14
)
1,393
(57
)
3,351
(71
)
State and municipal
securities
3,344
(151
)
618
(119
)
3,962
(270
)
$
7,061
$
(179
)
$
2,011
$
(176
)
$
9,072
$
(355
)
December 31, 2007
Less than 12 Months
12 Months or Greater
Total
Gross
Gross
Gross
Market
Unrealized
Market
Unrealized
Market
Unrealized
Value
Losses
Value
Losses
Value
Losses
(dollars in thousands)
Securities Available for Sale:
Securities of U.S.
Government agencies
and corporations
$
—
$
—
$
6,676
$
(67
)
$
6,676
$
(67
)
Mortgage-backed and
related securities
96
(1
)
3,428
(61
)
3,524
(62
)
State and municipal
securities
2,145
(34
)
1,026
(1
)
3,171
(35
)
$
2,241
$
(35
)
$
11,130
$
(129
)
$
13,371
$
(164
)
F-17
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. Securities
(Continued)
Management evaluates securities for other-than-temporary impairment at least on a
quarterly basis, and more frequently when economic or market concerns warrant such
evaluation. Consideration is given to (1) the length of time and the extent to which
the fair value has been less than cost, (2) the financial condition and near-term
prospects of the issuer, and (3) the intent and ability of the Bank to retain its
investment in the issuer for a period of time sufficient to allow for any anticipated
recovery in market value.
At June 30, 2009, the 20 (unaudited) securities with unrealized losses have depreciated
3.37 percent (unaudited) from the Bank's amortized cost basis. At December 31, 2008,
the 25 securities with unrealized losses have depreciated 3.76 percent from the Bank's
amortized cost basis. At December 31, 2007, the 30 securities with unrealized losses
have depreciated 1.22 percent from the Bank's amortized cost basis. Most of these
securities are guaranteed by either U.S. government corporations or agencies. These
unrealized losses relate principally to current interest rates for similar types of
securities. In analyzing an issuer's financial condition, management considers whether
the securities are issued by the federal government or its agencies, whether downgrades
by bond rating agencies have occurred, and the results of reviews of the issuer's
financial condition. Since management has the ability to hold debt securities until
maturity, or for the foreseeable future if classified as available-for-sale, no
declines in fair value are deemed to be other than temporary in nature. Accordingly,
management has not recorded any write downs in the carrying values of its securities.
Note 4. Loans and Allowance for Loan Losses
The Bank and Southland provide mortgage, consumer, and commercial lending services to individuals and
businesses primarily in the East Tennessee area.
The Bank's loans consist of the following at:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Mortgage loans on real estate:
Residential 1-4 family
$
77,194,124
$
75,296,542
$
71,629,133
Residential multifamily (5 or more)
14,605,762
11,255,113
6,840,816
Commercial
36,196,052
32,294,514
33,709,572
Construction and development
29,428,133
39,207,695
31,654,664
Equity lines of credit
14,798,698
14,670,665
13,129,731
172,222,769
172,724,529
156,963,916
Commercial loans
12,174,229
14,564,990
9,940,076
Consumer loans
11,046,444
12,865,843
15,010,159
Total loans
195,443,442
200,155,362
181,914,151
Less: Allowance for loan losses
(2,757,596
)
(3,082,602
)
(2,536,097
)
Unearned interest and fees
(285,490
)
(360,646
)
(543,967
)
Net deferred loan origination fees
(183,059
)
(192,457
)
(231,075
)
Loans, net
$
192,217,297
$
196,519,657
$
178,603,012
F-18
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 4. Loans and Allowance for Loan Losses
(Continued)
An analysis of the allowance for loan losses follows:
(Unaudited)
Years Ended
Six Months Ended
December 31,
June 30, 2009
2008
2007
Balance beginning of period
$
3,082,602
$
2,536,097
$
2,574,072
Provision for loan losses
117,733
760,803
442,895
Loans charged off
(484,679
)
(323,747
)
(528,943
)
Recoveries of loans
previously charged off
41,940
109,449
48,073
Balance, end of period
$
2,757,596
$
3,082,602
$
2,536,097
The Bank's only significant concentration of credit at June 30, 2009, December 31, 2008
and December 31, 2007, occurred in real estate loans which totaled $172,222,769
(unaudited), $172,724,529 and $156,963,916, respectively. While real estate loans
accounted for 88.12 percent (unaudited) of total loans at June 30, 2009, 86.30 percent
of total loans at December 31, 2008, and 86.29 percent of total loans at December 31,
2007, these loans were primarily residential development and construction loans,
residential mortgage loans, and commercial loans secured by commercial properties.
Substantially all real estate loans are secured by properties located in Tennessee.
The following is a summary of information pertaining to impaired and non-accrual loans:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Impaired loans without a valuation allowance
$
1,536,338
$
1,227,695
$
—
Impaired loans with a valuation allowance
2,961,531
5,320,770
1,168,693
Total impaired loans
$
4,497,869
$
6,548,465
$
1,168,693
Valuation allowance related to impaired loans
$
627,548
$
926,770
$
229,361
Total non-accrual loans
$
787,297
$
4,139,467
$
316,498
Total loans past-due ninety days or more
and still accruing
$
11,922
$
33,712
$
43,479
F-19
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 4. Loans and Allowance for Loan Losses
(Continued)
(Unaudited)
Six Months
Years Ended
Ended
December 31,
June 30, 2009
2008
2007
Average investment in impaired loans
$
4,633,540
$
3,653,844
$
1,269,708
Interest income recognized on impaired
loans
$
11,700
$
406,000
$
65,000
Interest income recognized on a cash
basis on impaired loans
$
11,700
$
406,000
$
65,000
Note 5. Premises and Equipment
A summary of bank premises and equipment is as follows:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Land
$
1,060,880
$
1,060,880
$
1,060,880
Buildings
5,181,517
5,171,389
5,115,926
Leasehold improvements
88,987
88,987
88,987
Equipment
4,551,492
4,515,404
4,349,199
Automobiles
22,494
22,494
13,323
10,905,370
10,859,154
10,628,315
Less accumulated depreciation
(5,815,243
)
(5,515,790
)
(4,763,677
)
$
5,090,127
$
5,343,364
$
5,864,638
Depreciation expense amounted to $325,042 (unaudited), $374,338 (unaudited), $763,939
and $837,351 for the six-month periods ended June 30, 2009 and 2008, and the years
ended December 31, 2008 and 2007, respectively.
F-20
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 6. Investments, at Cost
The Bank carries the following investments at cost because they are not readily
marketable and there is no established market price. These investments are normally
redeemed by the issuer or the underwriter at par value and may carry call or put
options under certain circumstances. Investments carried at cost are:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Federal Home Loan Bank of Cincinnati
common stock
$
2,898,800
$
2,898,800
$
2,786,000
West Point Market, Inc. variable rate
demand notes
—
—
1,000,000
Bee-Holdings, Inc. floater note
—
—
960,000
$
2,898,800
$
2,898,800
$
4,746,000
Note 7. Deposits
The aggregate amount of time deposits in denominations of $100,000 or more were
$47,225,457 (unaudited) at June 30, 2009, $56,444,040 at December 31, 2008 and
$50,041,560 at December 31, 2007.
Deposit accounts are federally insured up to $250,000 per depositor through December
31, 2013. On January 1, 2014, the FDIC insurance limit will return to $100,000 per
depositor for all deposit categories except for IRA and certain retirement accounts,
which will remain at $250,000 per depositor.
At June 30, 2009, the scheduled maturities of time deposits are as follows:
June 30,
Unaudited
2010
$
70,417,893
2011
19,014,721
2012
14,400,959
2013
8,849,313
2014
2,213,866
$
114,896,752
At December 31, 2008, the scheduled maturities of time deposits are as follows:
2009
$
75,862,084
2010
22,673,342
2011
13,798,320
2012
10,125,199
2013
5,663,557
Thereafter
38,207
$
128,160,709
F-21
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 8. Securities Sold Under Agreements to Repurchase
Securities sold under agreements to repurchase averaged approximately $1,145,000
(unaudited) for the six months ended June 30, 2009, $1,400,000 for the year ended
December 31, 2008 and $1,692,000 for the year ended December 31, 2007.
Note 9. Federal Home Loan Bank Advances
The schedule of advances from the Federal Home Loan Bank (FHLB) are as follows:
Interest
Final
(Unaudited)
Date of Advance
Rate
Maturity Date
06/30/09
12/31/08
12/31/07
September 6, 2002
3.93
%
October 1, 2012
$
377,751
$
430,272
$
532,273
November 30, 2006
4.39
%
November 30, 2011
5,000,000
5,000,000
5,000,000
February 5, 2008
2.85
%
February 5, 2010
2,000,000
2,000,000
—
July 11, 2008
4.37
%
July 11, 2013
1,500,000
1,500,000
—
July 31, 2008
4.28
%
September 6, 2013
1,500,000
1,500,000
—
November 28, 2008
0.99
%
February 26, 2009
—
3,000,000
—
December 23, 2008
0.54
%
March 23, 2009
—
2,655,000
—
December 29, 2008
0.54
%
March 27, 2009
—
225,000
—
$
10,377,751
$
16,310,272
$
5,532,273
Pursuant to collateral agreements with the FHLB, the advances and letters of credit
described below are secured by the Bank's FHLB stock and qualifying first mortgage
loans, totaling approximately $30,871,000 (unaudited), $41,037,000 and $17,826,000 as
of June 30, 2009, December 31, 2008 and December 31, 2007, respectively.
The Bank also has a Standby Letter of Credit for Public Unit Deposit Collateralization
Line with the Federal Home Loan Bank which provides an alternative for the Bank instead
of pledging securities to public depositors up to a maximum credit line of approximately
$17,000,000. This line of credit is also secured by the same collateral described
above. The FHLB issues irrevocable letters of credit on behalf of the Bank to certain
public entities which are depositors of the Bank. Letters of credit outstanding as of
June 30, 2009, December 31, 2008 and December 31, 2007, were $12,000,000 (unaudited),
$14,200,000 and $6,500,000, respectively.
At June 30, 2009, the scheduled maturities of the Federal Home Loan Bank advances are
as follows:
June 30,
Unaudited
2010
$
2,104,650
2011
108,200
2012
5,112,750
2013
52,151
2014
3,000,000
$
10,377,751
F-22
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 9. Federal Home Loan Bank Advances
(Continued)
At December 31, 2008, the scheduled maturities of the Federal Home Loan Bank advances
are as follows:
2009
$
5,991,800
2010
2,112,500
2011
5,112,900
2012
93,072
2013
3,000,000
$
16,310,272
Note 10
.
Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by the
federal banking agencies. Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary actions by regulators that, if
undertaken, could have a direct material affect on the Bank and the consolidated
financial statements. Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Bank must meet specific capital guidelines that
involve quantitative measures of the Bank's assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices. The
Bank's capital amounts and classification are also subject to qualitative judgments by
the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the
Bank to maintain minimum amounts and ratios (set forth in the table below) of total and
Tier I capital (as defined in the regulations) to risk-weighted assets (as defined),
and of Tier I capital (as defined) to average assets (as defined). Management
believes, as of June 30, 2009, December 31, 2008 and December 31, 2007, that the Bank
meets all capital adequacy requirements to which it is subject.
As of June 30, 2009, the most recent notification from the OTS categorized the Bank as
well capitalized under the regulatory framework for prompt corrective action. There
are no conditions or events since that notification that management believes have
changed the institution's prompt corrective action category.
F-23
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 10
.
Regulatory Matters
(Continued)
The Bank's actual capital amounts and ratios are presented in the table. Dollar
amounts are presented in thousands.
For Capital
Actual
Adequacy Purposes
Amount
Ratio
Amount
Ratio
As of June 30, 2009: (Unaudited)
Total capital
(to risk-weighted assets)
$
26,927
15.04
%
$
14,327
8.00
%
Tier I capital
(to risk-weighted assets)
24,682
13.78
%
7,163
4.00
%
Tier I capital
(to adjusted total assets)
24,682
10.19
%
9,692
4.00
%
Tangible capital
(to adjusted total assets)
24,682
10.19
%
3,635
1.50
%
As of December 31, 2008:
Total capital
(to risk-weighted assets)
$
25,757
14.01
%
$
14,709
8.00
%
Tier I capital
(to risk-weighted assets)
23,518
12.79
%
7,354
4.00
%
Tier I capital
(to adjusted total assets)
23,518
9.40
%
10,152
4.00
%
Tangible capital
(to adjusted total assets)
23,518
9.40
%
3,754
1.50
%
As of December 31, 2007:
Total capital
(to risk-weighted assets)
$
24,569
14.77
%
$
13,307
8.00
%
Tier I capital
(to risk-weighted assets)
22,485
13.52
%
6,654
4.00
%
Tier I capital
(to adjusted total assets)
22,485
9.80
%
9,181
4.00
%
Tangible capital
(to adjusted total assets)
22,485
9.80
%
3,443
1.50
%
Below is a reconciliation of GAAP and regulatory capital amounts (in thousands):
(Unaudited)
June 30,
December 31,
2009
2008
2007
Total equity per the financial statements
$
25,331
$
24,212
$
23,271
Other intangible assets
(555
)
(636
)
(793
)
Unrealized (gains) losses on available for sale securities
(94
)
(58
)
7
Tier I capital
24,682
23,518
22,485
Allowance for loan losses — allowable portion
2,245
2,239
2,084
Total risk-based capital
$
26,927
$
25,757
$
24,569
F-24
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 11. Income Taxes
Net deferred tax assets consist of the following components as of June 30, 2009,
December 31, 2008 and December 31, 2007:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Deferred tax assets:
Allowance for loan losses
$
304,144
$
428,589
$
219,332
Deferred compensation
602,388
597,600
467,526
Executive benefit plan
165,551
172,252
181,113
Other
120,741
74,832
104,992
1,192,824
1,273,273
972,963
Deferred tax liabilities:
FHLB stock dividends
375,510
375,510
332,319
Depreciable assets
142,894
168,447
177,358
Other
364,942
494,777
354,391
883,346
1,038,734
864,068
Net deferred tax assets
$
309,478
$
234,539
$
108,895
The provision for income taxes charged to income for the six-month periods ended June
30, 2009 and 2008, and the years ended December 31, 2008 and 2007, consists of the
following:
(Unaudited)
Six Months Ended
Years Ended
June 30,
December 31,
2009
2008
2008
2007
Current tax expense
$
445,047
$
312,835
$
679,812
$
423,366
Deferred benefit
(39,357
)
(159,867
)
(192,559
)
(31,564
)
Provisions for income taxes
$
405,690
$
152,968
$
487,253
$
391,802
F-25
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 11. Income Taxes
(Continued)
The income tax provision is less than the expected tax provision computed by multiplying
income before income taxes by the statutory federal income tax rates. The reasons for
this difference are as follows:
(Unaudited)
Six Months Ended
Years Ended
June 30,
December 31,
2009
%
2008
%
2008
%
2007
%
Expected tax at statutory
rates
$
506,400
34.00
%
$
209,400
34.00
%
$
542,900
34.00
%
$
514,000
34.00
%
Tax-exempt earnings on
life insurance policies
(48,400
)
(3.25
)
(48,400
)
(7.86
)
(98,100
)
(6.14
)
(85,600
)
(5.66
)
Tax-exempt interest
(44,000
)
(2.95
)
(33,700
)
(5.47
)
(75,650
)
(4.74
)
(49,900
)
(3.30
)
State income taxes, net of
federal income tax
benefit
63,900
4.29
26,400
4.29
68,500
4.29
64,850
4.29
Other
(72,210
)
(4.85
)
(732
)
(0.12
)
49,603
3.11
(51,548
)
(3.41
)
Provision for income
taxes
$
405,690
27.24
%
$
152,968
24.84
%
$
487,253
30.52
%
$
391,802
25.92
%
Note 12. Employee Benefit Plan
The Bank has adopted a 401(k) plan covering substantially all employees. Employees are
allowed to contribute up to 75% of earnings and, in addition, the Bank will match a
portion of the employees' contributions. The expenses incurred by the Bank for the plan
totaled $151,642 (unaudited), $169,234 (unaudited), $312,568 and $318,206 for the
six-month periods ended June 30, 2009 and 2008, and the years ended December 31, 2008
and 2007, respectively.
Note 13. Deferred Compensation
The Bank has established deferred compensation plans for the benefit of its board of
directors. Under the plans, any director electing to defer directors' fees will be
entitled to receive the accumulated benefits, including interest earned, over a period
of five to fifteen years following retirement. The Bank recognizes the liability for
these benefits over the service period. As of June 30, 2009, December 31, 2008 and
December 31, 2007, the liability for these benefits was $905,360 (unaudited), $926,608
and $925,535,
respectively. The Bank has insured the lives of certain directors who participate in
the deferred compensation plans to assist in the funding of the deferred compensation
liability. The Bank is the owner and beneficiary of the insurance policies.
F-26
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 14. Executive Benefit Plans
The Bank has adopted a noncontributory executive salary continuation agreement and an
executive salary continuation plan for its former president. The following is a summary
of the plans' funded status:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Projected benefit obligation
at beginning of period
$
449,863
$
473,004
$
494,001
Service cost and net periodic
benefit cost
6,084
27,331
29,907
Payments to former president
(23,587
)
(50,472
)
(50,904
)
Net benefit liability at end of period
$
432,360
$
449,863
$
473,004
The weighted-average discount rate used in determining the present value of the benefit
liability is 6%.
Also, the Bank has an employment agreement with its president and chief executive
officer for post-retirement compensation and other related benefits. As of June 30,
2009, December 31, 2008 and December 31, 2007, the net present value liability of these
benefits was approximately $278,000 (unaudited), $168,000 and $38,000, respectively.
Note 15. Significant Group Concentrations of Credit Risk
Most of the Bank's and subsidiaries' business activity is with customers located within
East Tennessee. As of June 30, 2009, December 31, 2008 and December 31, 2007, the Bank
and Southland had concentrations of loans in real estate lending and consumer lending.
Generally these loans are secured by the underlying real estate and consumer goods. The
usual risks associated with such concentrations are generally mitigated by being spread
over several hundred unrelated borrowers and by adequate loan-to-collateral-value
ratios.
F-27
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 16. Fair Value Disclosures
Fair value measurements:
The Bank utilizes fair value measurements to record fair value adjustments to certain
assets and liabilities and to determine fair value disclosures. Securities available
for sale are recorded at fair value on a recurring basis. Additionally, from time to
time, the Bank may be required to record at fair value other assets on a nonrecurring
basis, such as loans held for sale, loans held for investment and certain other assets.
These nonrecurring fair value adjustments would typically involve application of lower
of cost or market accounting or write-downs of individual assets.
SFAS 157 establishes a three-tier fair value hierarchy which requires an entity to
maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value, as follows:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the Bank has the ability to access.
Level 2 — Significant other observable inputs other than Level 1 prices, such as quoted
prices for similar assets or liabilities in active markets, quoted prices in markets
that are not active and other inputs that are observable or can be corroborated by
observable market data.
Level 3 — Significant unobservable inputs that reflect a company's own assumptions
about the assumptions that market participants would use in pricing an asset or
liability.
Following is a description of valuation methodologies used for assets and liabilities
recorded at fair value.
Securities available for sale — Securities classified as available for sale are
reported at fair value utilizing Level 2 inputs. For these securities, the Bank
obtains fair value measurements from an independent pricing service. The fair value
measurements consider observable data that may include dealer quotes, market spreads,
cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data,
market consensus prepayment speeds, credit information and the bond's terms and
conditions, among other things.
Impaired loans — The Bank does not record loans at fair value on a recurring basis.
However, from time to time, a loan is considered impaired and an allowance for loan
losses is established. Loans for which it is probable that payment of interest and
principal will not be made in accordance with the contractual terms of the loan
agreement are considered impaired. Once a loan is identified as individually impaired,
management measures impairment in accordance with SFAS 114,
Accounting by Creditors for
Impairment of a Loan
. The fair value of impaired loans is estimated using several
methods including collateral value, liquidation value and discounted cash flows. Those
impaired loans not requiring an allowance represent loans for which the fair value of
the expected repayments or collateral exceed the recorded investments in
F-28
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 16. Fair Value Disclosures
(Continued)
Fair value measurements: (Continued)
such loans. At June 30, 2009 and December 31, 2008, substantially all of the total
impaired loans were evaluated based on the fair value of collateral. In accordance
with SFAS 157, impaired loans where an allowance is established based on the fair value
of collateral require classification in the fair value hierarchy. When the fair value
of the collateral is based on the observable market price or a current appraised value,
the Bank records the impaired loan as nonrecurring Level 2. When an appraised value is
not available or management determines the fair value of the collateral is further
impaired below the appraised value and there is no observable market price, the Bank
records the impaired loan as nonrecurring Level 3.
The table below presents the recorded amount of assets and liabilities measured at fair
value on a recurring basis.
Quoted Prices in
Significant
Significant
Active Markets
Other
Other
for Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Unaudited)
Balance
(Level 1)
(Level 2)
(Level 3)
June 30, 2009:
Securities available
for sale
$
22,621,077
$
—
$
22,621,077
$
—
December 31, 2008:
Securities available
for sale
$
30,509,092
$
—
$
30,509,092
$
—
The table below presents information about assets and liabilities on the balance sheet
at June 30, 2009 and December 31, 2008 for which a nonrecurring change in fair value was
recorded
Quoted Prices in
Significant
Significant
Active Markets
Other
Other
for Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Unaudited)
Balance
(Level 1)
(Level 2)
(Level 3)
June 30, 2009:
Impaired loans
$
2,334,000
$
—
$
—
$
2,334,000
December 31, 2008:
Impaired loans
$
4,394,000
$
—
$
—
$
4,394,000
F-29
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 16. Fair Value Disclosures
(Continued)
Fair value measurements: (Continued)
Losses derived from Level 3 inputs were calculated primarily by models utilizing
estimated collateral value or the discounted present value of expected cash flows.
Fair value of financial instruments:
Fair value estimates are made at a specific point in time, based on relevant market
information about the financial instrument. These estimates do not reflect any premium
or discount that could result from offering for sale at one time the Bank's entire
holdings of a particular financial instrument. Because no market exists for a
significant portion of the Bank's financial instruments, fair value estimates are based
on judgments regarding future expected loss experience, current economic conditions,
risk characteristics of various financial instruments, and other factors. These
estimates are subjective in nature; involve uncertainties and matters of significant
judgment; and, therefore, cannot be determined with precision. Changes in assumptions
could significantly affect the estimates.
Fair value estimates are based on existing financial instruments without attempting to
estimate the value of anticipated future business and the value of assets and
liabilities that are not considered financial instruments. The following methods and
assumptions were used to estimate the fair value of each class of financial instruments:
Cash, cash equivalents, and interest-bearing deposits in banks:
For cash, cash equivalents, and interest-bearing deposits in banks, the carrying amount
is a reasonable estimate of fair value.
Securities:
The fair value of securities, excluding investments carried at cost, is estimated based
on bid prices published in financial newspapers or bid quotations received from
securities dealers. The carrying value of investments carried at cost approximates fair
value based on the redemption provisions of each issuer.
F-30
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 16. Fair Value Disclosures
(Continued)
Fair value of financial instruments: (Continued)
Loans, net:
The fair value of loans is calculated by discounting scheduled cash flows through the
estimated maturity using estimated market discount rates, adjusted for credit risk and
servicing costs. The estimate of maturity is based on the Bank's historical experience
with repayments for each loan classification, modified, as required, by an estimate of
the effect of current economic and lending conditions.
Cash surrender value of bank owned life insurance:
For cash surrender value of bank owned life insurance, the carrying amount is a
reasonable estimate of fair value.
Deposits:
The fair value of deposits with no stated maturity, such as noninterest-bearing demand
deposits and NOW, money market, and savings accounts, is equal to the amount payable on
demand at the reporting date. The fair value of time deposits is based on the
discounted value of contractual cash flows. The discount rate is estimated using the
rates currently offered for deposits of similar remaining maturities.
Securities sold under agreements to repurchase:
The estimated fair value of these liabilities, which are extremely short term,
approximates their carrying value.
Federal Home Loan Bank advances:
Rates currently available to the Bank for debt with similar terms and remaining
maturities are used to estimate the fair value of existing debt.
Commitments to extend credit:
The fair value of commitments is estimated using the fees currently charged to enter
into similar agreements, taking into account the remaining terms of the agreements and
the present creditworthiness of the counterparties. For fixed-rate loan commitments,
fair value also considers the difference between current levels of interest rates and
the committed rates.
F-31
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 16. Fair Value Disclosures
(Continued)
Fair value of financial instruments: (Continued)
The carrying amount and estimated fair value of the Bank's financial instruments are as
follows (in thousands):
(Unaudited)
December 31
June 30, 2009
2008
2007
Carrying
Estimated
Carrying
Estimated
Carrying
Estimated
Amount
Fair Value
Amount
Fair Value
Amount
Fair Value
Financial assets:
Cash and cash
equivalents
$
9,761
$
9,761
$
4,547
$
4,547
$
9,284
$
9,284
Interest-bearing
deposits in banks
981
981
1,881
1,881
—
—
Securities
22,623
22,623
30,514
30,514
22,981
22,981
Investments, at cost
2,899
2,899
2,899
2,899
4,746
4,746
Loans, net
192,217
193,668
196,520
198,575
178,603
180,392
Cash surrender value
of bank owned life
insurance
6,354
6,354
6,246
6,246
6,020
6,020
Financial liabilities:
Deposits
202,920
210,298
206,493
214,439
197,344
198,841
Securities sold under
agreements to
repurchase
972
972
912
912
1,151
1,151
Federal Home Loan
Bank advances
10,378
10,532
16,310
16,883
5,532
5,526
Unrecognized financial
instruments (net of
contract amount):
Commitments to
extend credit
—
—
—
—
—
—
Note 17. Related Party Transactions
In the ordinary course of business, the Bank has granted loans to principal officers and
directors and their affiliates. Activity for the six months ended June 30, 2009 and the
years ended December 31, 2008 and 2007, consisted of the following:
(Unaudited)
June 30,
December 31,
2009
2008
2007
Beginning balance
$
1,066,209
$
1,499,158
$
1,183,881
New loans
320,257
1,230,730
380,793
Repayments
(480,850
)
(1,663,679
)
(65,516
)
Ending balance
$
905,616
$
1,066,209
$
1,499,158
The Bank held related party deposits of $5,498,332 (unaudited), $5,099,187 and $5,305,243
at June 30, 2009, December 31, 2008 and December 31, 2007, respectively.
F-32
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 18. Financial Instruments With Off-Balance-Sheet Risk
The Bank is party to financial instruments with off-balance sheet risk in the normal
course of business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit and standby letters of credit. These
instruments involve, to varying degrees, elements of credit and interest rate risk in
excess of the amount recorded in the accompanying consolidated balance sheets. Such
financial instruments are recorded when they are funded.
The Bank's exposure to credit loss in the event of nonperformance by the counterparty to
the financial instruments for commitments to extend credit and standby letters of credit
is represented by the contractual amount of those instruments. The Bank uses the same
credit policies in making such commitments as it does for instruments that are included
in the balance sheet.
At June 30, 2009, December 31, 2008 and December 31, 2007, commitments under standby
letters of credit were approximately $2,800,000 (unaudited), $3,200,000 and $485,000,
respectively. Undisbursed loan commitments aggregated approximately $20,775,000
(unaudited), $22,869,000 and $26,621,000 at June 30, 2009, December 31, 2008 and December
31, 2007, respectively.
Commitments to extend credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee. Since
many of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The Bank
evaluates each customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Bank upon extension of credit, is based
on management's credit evaluation. Collateral held varies but may include accounts
receivable, inventory, property and equipment, and income-producing commercial
properties.
Standby letters of credit are conditional commitments issued by the Bank to guarantee the
performance of a customer to a third party. Standby letters of credit generally have
fixed expiration dates or other termination clauses and may require payment of a fee.
The credit risk involved in issuing letters of credit is essentially the same as that
involved in extending loan facilities to customers. The Bank's policy for obtaining
collateral, and the nature of such collateral, is essentially the same as that involved
in making commitments to extend credit.
The Bank has not been required to perform on any financial guarantees during any of the
periods presented. The Bank has not incurred any losses on its commitments in either the
six-month periods ended June 30, 2009 and 2008, or years ended December 31, 2008 and
2007.
F-33
Table of Contents
ATHENS FEDERAL COMMUNITY BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
AND YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 19. Plan of Conversion and Change in Corporate Form
On July 15, 2009, the Board of Directors of the Bank adopted a plan of conversion (Plan).
The Plan is subject to the approval of the Office of Thrift Supervision (OTS) and must
be approved by the affirmative vote of at least a majority of the total votes eligible to
be cast by the voting members of the Bank at a special meeting. The Plan sets forth that
the Bank proposes to convert into a stock savings bank structure with the establishment
of a stock holding company, Athens Bancshares Corporation (Company), as parent of the
Bank. The Bank will convert to the stock form of ownership, followed by the issuance of
all of the Bank's outstanding stock to the Company. Pursuant to the Plan, the Bank will
determine the total offering value and number of shares of common stock based upon an
independent appraiser's valuation. The stock will be priced at $10.00 per share. In
connection with the Plan, the Company intends to establish a charitable foundation which
will be funded with common stock of the Company and cash. In addition, the Bank's Board
of Directors will adopt an employee stock ownership plan (ESOP) which will subscribe 8%
of the common stock sold in the offering and contributed to the charitable foundation.
The Company is being organized as a corporation incorporated under the laws of the State
of Tennessee and will own all of the outstanding common stock of the Bank upon completion
of the conversion.
The costs of issuing the common stock will be deferred and deducted from the sales
proceeds of the offering. If the conversion is unsuccessful, all deferred costs will be
charged to operations. At June 30, 2009, the Bank had incurred an insignificant amount
of deferred conversion costs in the form of retainers paid and included in other assets
on the accompanying June 30, 2009, balance sheet. The Bank had incurred no deferred
conversion costs as of December 31, 2008 or 2007. The transaction is subject to approval
by regulatory authorities and members of the Bank. At the completion of the conversion
to stock form, the Bank will establish a liquidation account in the amount of retained
earnings contained in the final prospectus. The liquidation account will be maintained
for the benefits of eligible savings account holders who maintain deposit accounts in the
Bank after conversion.
The conversion will be accounted for as a change in corporate form with the historic
basis of the Bank's assets, liabilities and equity unchanged as a result.
F-34
Table of Contents
You should rely only on the information contained in this prospectus. Neither
Athens Bancshares Corporation nor Athens Federal Community Bank has authorized
anyone to provide you with different information. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered by this prospectus to any person or in any jurisdiction in
which an offer or solicitation is not authorized or in which the person making
an offer or solicitation is not qualified to do so, or to any person to whom it
is unlawful to make an offer or solicitation in those jurisdictions. The
information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of
any sale of common stock.
[LOGO]
(Proposed Holding Company for Athens Federal Community Bank)
2,085,000 Shares
(Anticipated Maximum, Subject to Increase)
COMMON STOCK
Prospectus
Keefe, Bruyette & Woods
, 2009
Until
, or 25 days after commencement of the syndicated
community offering, if any, whichever is later, all dealers effecting
transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
SEC filing fee (1)
$
1,500
OTS filing fee
12,000
FINRA filing fee (1)
3,500
Nasdaq Stock Market listing fee
50,000
Blue Sky fees and expenses
7,500
EDGAR, printing, postage and mailing
175,000
Legal fees and expenses
350,000
Accounting fees and expenses
175,000
Appraiser's fees and expenses
40,000
Business Plan fees and expenses
35,000
Marketing firm fees (1)(2)(3)
(3)
Marketing firm expenses (including marketing firm's counsel fees)
60,000
Conversion agent fees and expenses
25,000
Transfer agent and registrar fees and expenses
20,000
Certificate printing
7,500
Miscellaneous
10,000
Total
$
1,180,000
(1)
Estimated based on registration of 2,512,750 shares at $10.00 per share.
(2)
Assumes 8.0% ESOP purchase and insider purchases equal to 11.7% of the offering.
(3)
Keefe, Bruyette & Woods, Inc. will receive a success fee equal to the greater of: (i)
$200,000 or (ii) 1.125% of the aggregate dollar amount of the common stock sold in the
subscription and community offerings to persons other than the employee stock ownership plan
and directors, officers and employees of Athens Federal Community Bank or their immediate
families and shares issued to the charitable foundation. In addition, Keefe, Bruyette and
Woods, Inc. will be reimbursed up to $50,000 for the fees and expenses of its legal counsel.
II–1
Table of Contents
Item 14. Indemnification of Directors and Officers.
Article X of the Registrant's Charter provides:
A director of this Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability: (i) for any
breach of the director's duty of loyalty to the Corporation or its
shareholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; or
(iii) for unlawful distributions under Section 48-18-304 of the
Tennessee Business Corporation Act, as amended (the "TBCA"). If the
TBCA is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the TBCA, as so amended.
Any repeal or modification of the foregoing paragraph by the
shareholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time
of such repeal or modification.
In addition, Article XI of the Registrant's Charter provides:
(A) Each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter
a "proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee
benefit plan,
and
(1) he or she conducted himself in good
faith, (2) he or she reasonably believed, (a) in the case of conduct
in his official capacity with the Corporation, that his or her conduct
was in the Corporation's best interest and, (b) in all other cases,
that his or her conduct was at least not opposed to the Corporation's
best interest, and (3) in the case of any criminal proceeding, he or
she had no reasonable cause to believe that his conduct was unlawful
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
TBCA, as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than such
law permitted the Corporation to provide before such amendment),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in
connection therewith;
provided
,
however
, that, except
as provided in Section (C) hereof with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify any
such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
(B) The right to indemnification conferred in Section A of this
Article XI shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its
final disposition (hereinafter an "advancement of expenses");
provided
,
however
, that, if the TBCA requires, an
advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such indemnitee,
including, without limitation, services to an employee benefit plan)
shall be made
II–2
Table of Contents
upon (1) delivery to the Corporation of an undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to
repay all amounts so advanced if it shall ultimately be determined by
final judicial decision from which there is no further right to appeal
(hereinafter a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Section or
otherwise, (2) delivery to the Corporation, by or on behalf of such
indemnitee, of a written affirmation of his or her good faith belief
that he or she has met the standard of conduct set forth in Section A
of this Article XI, and (3) a determination that the facts would not
preclude indemnification under this Article XI.
The determination shall be made (a) by the Board of Directors by majority
vote of a quorum consisting of directors not at the time parties to the proceeding,
(b) if a quorum cannot be obtained under the preceding clause, by majority vote of a
committee duly designated by the Board of Directors (in which designation directors
who are parties may participate), consisting solely of two (2) or more directors not
at the time parties to the proceeding, (c) by independent special legal counsel, (i)
selected by the Board of Directors or its committee in the manner described in
clause (a) or (b) of this paragraph, or (ii) if a quorum of the board cannot be
obtained under clause (a) or (b) of this paragraph, selected by a majority vote of
the full Board of Directors (in which selection directors who are parties may
participate) or; (d) by the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may not be voted
on the determination.
The rights to indemnification and to the advancement of expenses conferred in
Sections (A) and (B) of this Article XI shall be contract rights and such rights
shall continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
(C) If a claim under Section (A) or (B) of this Article XI is not paid in full by
the Corporation within sixty (60) days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty (20) days, the indemnitee may at
any time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expenses of prosecuting or defending such suit. In (1) any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in a suit
brought by the indemnitee to enforce a right to an advancement of expenses) it shall
be a defense that, and (2) in any suit by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee has
not met any applicable standard for indemnification set forth in the TBCA.
Authorization of indemnification and evaluation as to reasonableness of expenses
shall be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled to select counsel under clause (c) of the second
paragraph of Section (B). In any suit brought by the indemnitee to enforce a right
to indemnification or to an advancement of expenses hereunder, or by the Corporation
to recover an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article XI or otherwise shall be on the
Corporation.
(D) The rights to indemnification and to the advancement of expenses conferred in
this Article XI shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, this Charter, Bylaws, agreement, vote of
shareholders or Disinterested Directors, as defined in Article XIII of this Charter,
or otherwise.
(E) The Corporation may maintain insurance, at its expense, to protect itself and
any director, officer, employee or agent of the Corporation or subsidiary or
affiliate or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not
II–3
Table of Contents
the Corporation would have the power to indemnify such person against such expense, liability or
loss under the TBCA.
(F) The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to any
employee or agent of the Corporation to the fullest extent of the provisions of this
Article XI with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
Item 15. Recent Sales of Unregistered Securities.
None.
II–4
Table of Contents
Item 16. Exhibits and Financial Statement Schedules.
The exhibits and financial statement schedules filed as a part of this registration statement are
as follows:
(a) List of Exhibits (filed herewith unless otherwise noted)
1.1
Engagement Letter between Athens Federal Community Bank and Keefe, Bruyette & Woods, Inc.
1.2
Draft Agency Agreement*
2.1
Plan of Conversion
3.1
Charter of Athens Bancshares Corporation
3.2
Bylaws of Athens Bancshares Corporation
4.1
Specimen Stock Certificate of Athens Bancshares Corporation
5.1
Form of Opinion of Kilpatrick Stockton LLP re: Legality
8.1
Form of Opinion of Kilpatrick Stockton LLP re: Federal Tax Matters
8.2
Form of Opinion of Hazlett, Lewis & Bieter, PLLC re: State Tax Matters
10.1
Form of Athens Federal Community Bank Employee Stock Ownership Plan
10.2
Form of Athens Federal Community Bank Employee Stock Ownership Plan Trust Agreement
10.3
Form of Employee Stock Ownership Plan Loan Agreement, Pledge Agreement and Promissory Note
10.4
Athens Federal Community Bank 401(k) Plan*
10.5
Employment Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham
10.6
Form of Employment Agreement between Athens Federal Community Bank and Athens Bancshares
Corporation and Jeffrey L. Cunningham
10.7
Form of Employment Agreement between Athens Federal Community Bank and Athens Bancshares
Corporation and Michael R. Hutsell and Jay Leggett, Jr.
10.8
Supplemental Executive Retirement Plan Agreement between Athens Federal Community Bank and
Jeffrey L. Cunningham
10.9
Form of Supplemental Executive Retirement Plan Agreement between Athens Federal Community Bank and Jeffrey L. Cunningham
10.10
Form of Athens Federal Community Bank Supplemental Executive Retirement Plan
10.11
Director's Deferred Compensation Agreement between Athens Federal Community Bank and Dr.
James L. Carter, Jr.
10.12
Form of Athens Federal Community Bank Employee Severance Compensation Plan
10.13
Athens Federal Community Bank Amended Group Term Carve Out Plan for Jeffrey L. Cunningham
10.14
Athens Federal Community Bank Amended Group Term Carve Out Plan for Michael R. Hutsell
23.1
Consent of Kilpatrick Stockton LLP (included in Exhibits 5.1 and 8.1 filed herewith)
23.2
Consent of Hazlett, Lewis & Bieter, PLLC
23.3
Consent of Keller & Company, Inc.
24.1
Powers of Attorney
99.1
Appraisal Report of Keller & Company, Inc. (P)
99.2
Draft Marketing Materials
99.3
Form of Subscription Order Form and Instructions
99.4
Form of Athens Federal Foundation Gift Instrument
(P)
The supporting financial schedules are filed in paper under Form SE pursuant to Rule 202 of
Regulation S-T.
*
To be filed by amendment.
(b) Financial Statement Schedules
All schedules have been omitted as not applicable or not required under the rules of Regulation
S-X.
II–5
Table of Contents
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii)
To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
(4)
That, for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
(5)
That, for the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(6)
That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the
offering containing
II–6
Table of Contents
material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes to provide to the underwriter at the closing
specified in the underwriting agreement certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II–7
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Athens, State of Tennessee on September 17, 2009.
Athens Bancshares Corporation
By:
/s/ Jeffrey L. Cunningham
Jeffrey L. Cunningham
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
Name
Title
Date
/s/ Jeffrey L. Cunningham
Jeffrey
L. Cunningham
President, Chief Executive Officer
and Director
(principal executive officer)
September 17, 2009
/s/ Michael R. Hutsell
Michael
R. Hutsell
Vice President, Chief Operating Officer
and Chief Financial Officer
(principal accounting and financial
officer)
September 17, 2009
/s/ Dr. James L. Carter, Jr.
Dr. James
L. Carter, Jr.
Director
September 17, 2009
/s/ Elaine M. Cathcart
Elaine
M. Cathcart
Director
September 17, 2009
/s/ G. Scott Hannah
G.
Scott Hannah
Director
September 17, 2009
/s/ G. Timothy Howard
G.
Timothy Howard
Director
September 17, 2009
/s/ M. Darrell Murray
M.
Darrell Murray
Director
September 17, 2009
/s/ Lyn B. Thompson
Lyn
B. Thompson
Director
September 17, 2009
/s/ Larry D. Wallace
Larry
D. Wallace
Director
September 17, 2009