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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001169232-03-002078.txt : 20030314
<SEC-HEADER>0001169232-03-002078.hdr.sgml : 20030314
<ACCEPTANCE-DATETIME>20030313190143
ACCESSION NUMBER:		0001169232-03-002078
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20021231
FILED AS OF DATE:		20030314

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GUARANTY BANCSHARES INC /TX/
		CENTRAL INDEX KEY:			0001058867
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				751656431
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24235
		FILM NUMBER:		03603032

	BUSINESS ADDRESS:	
		STREET 1:		100 WEST ARKANSAS
		CITY:			MT PLEASANT
		STATE:			TX
		ZIP:			75456
		BUSINESS PHONE:		9035729881

	MAIL ADDRESS:	
		STREET 1:		100 WEST ARKANSAS
		CITY:			MT PLEASANT
		STATE:			TX
		ZIP:			75456
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>d03-54372.htm
<DESCRIPTION>ANNUAL REPORT
<TEXT>

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     <!-- Control Number: 03-54372                                                         -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Guaranty Bancshares, Inc.                                        -->
     <!-- Project Name:   Form Type: 10-K                                                  -->
     <!-- Firm Name:      Guaranty Bancshares, Inc. (ADP)                                  -->
     <TITLE>10-K</TITLE>
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<table cellpadding="0" cellspacing="0" border="0" width="500">
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, Serif" size=3>FINANCIAL
      INFORMATION </font><br>
      <font face="Times New Roman, Times, Serif" size=2>2002 Annual Report on
      Form 10-K </font></th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, Serif" size="1">&nbsp;
      </font></th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">Part
      I </font></th>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" colspan="2"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A001">Item
      1.&nbsp;&nbsp; &nbsp;&nbsp; Business</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;&nbsp;3&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A002">Item
      2.&nbsp;&nbsp; &nbsp;&nbsp; Properties</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;14&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A003">Item
      3.&nbsp;&nbsp; &nbsp;&nbsp; Legal Proceedings</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;14&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A004">Item
      4.&nbsp;&nbsp; &nbsp;&nbsp; Submission of Matters to Vote
      of Security Holders</a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;15&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT">
      <hr size=2 NOSHADE width=100% align=CENTER>
    </th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">Part
      II </font></th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></th>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" rowspan="2"><font face="Times New Roman, Times, serif" size="2"><a href="#A005">Item
      5.&nbsp;&nbsp; &nbsp;&nbsp; Market for Registrant&#146;s
      Common Equity and Related Shareholder Matters</a> </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;15&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A006">Item
      6.&nbsp;&nbsp; &nbsp;&nbsp; Selected Consolidated Annual
      Financial Data</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;16&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A007">Item
      7.&nbsp;&nbsp; &nbsp;&nbsp; Management&#146;s Discussion
      and Analysis</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;19&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A007A">Item
      7A.&nbsp;&nbsp; Quantitative and Qualitative Disclosures</a>
      </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;40&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A008">Item
      8.&nbsp;&nbsp; &nbsp;&nbsp; Financial Statements and Supplementary
      Data</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;43&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A009">Item
      9.&nbsp;&nbsp; &nbsp;&nbsp; Changes and Disagreements with
      Accountants</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;44&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT">
      <hr size=2 NOSHADE width=100% align=CENTER>
    </th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">Part
      III </font></th>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" colspan="2"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A010">Item
      10.&nbsp;&nbsp; &nbsp;Directors and Executive Officers</a>
      </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;44&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A011">Item
      11. &nbsp;&nbsp; Executive Compensation</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;44&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A012">Item
      12.&nbsp; &nbsp; Security Ownership</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;44&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A013">Item
      13. &nbsp;&nbsp; Related Transactions</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;44&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A014">Item
      14.&nbsp; &nbsp; Controls and Procedures</a> </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;44&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT">
      <hr size=2 NOSHADE width=100% align=CENTER>
    </th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2" align="LEFT"><font face="Times New Roman, Times, serif" size="2">Part
      IV </font></th>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" colspan="2"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><a href="#A015">Item
      15.&nbsp; &nbsp; Exhibits, Financial Statement Schedules</a>
      </font></td>
    <td align="left"><font face="Times New Roman, Times, serif" size="2">-&nbsp;45&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A016">Independent
      Auditors&#146; Reports</a> </font></td>
    <td align="left" nowrap><font face="Times New Roman, Times, serif" size="2">-&nbsp;F-2&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A017">Consolidated
      Balance Sheets</a> </font></td>
    <td align="left" nowrap><font face="Times New Roman, Times, serif" size="2">-&nbsp;F-4&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A018">Consolidated
      Statements of Earnings</a> </font></td>
    <td align="left" nowrap><font face="Times New Roman, Times, serif" size="2">-&nbsp;F-5&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A019">Consolidated
      Statements of Shareholders&#146; Equity</a> </font></td>
    <td align="left" nowrap><font face="Times New Roman, Times, serif" size="2">-&nbsp;F-6&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A020">Consolidated
      Statements of Cash Flows</a> </font></td>
    <td align="left" nowrap><font face="Times New Roman, Times, serif" size="2">-&nbsp;F-7&nbsp;-
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><a href="#A021">Notes
      to Consolidated Financial Statements</a> </font></td>
    <td align="left" nowrap><font face="Times New Roman, Times, serif" size="2">-&nbsp;F-8&nbsp;-
      </font></td>
  </tr>
</table>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNITED STATES  <BR>
SECURITIES AND EXCHANGE
COMMISSION<BR>
Washington, D.C. 20549 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM 10-K   </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(Mark One) </B>  </FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>|X|</B>  </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934</B>  </FONT> </TD>
</TR>
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<BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the fiscal year
ended December 31, 2002   </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OR   </FONT></H1>

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</TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>|_|</B>  </FONT></TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934</B>  </FONT> </TD>
</TR>
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<BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the transition
period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to  </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commission File Number
0-23113   </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>GUARANTY BANCSHARES,
INC.</B><BR>
(Exact name of registrant as specified in its charter)  </FONT> </P>

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<TD ALIGN=CENTER WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Texas</B><BR>
(State or other jurisdiction of<BR>
incorporation or organization)  </FONT></TD>
<TD ALIGN=CENTER WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>75-1656431</B><BR>
(I.R.S.Employer<BR>
Identification Number)  </FONT></TD>
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<TD ALIGN=CENTER WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>100 West Arkansas<BR>
Mount Pleasant, Texas</B><BR>
(Address
of principal executive offices)  </FONT></TD>
<TD ALIGN=CENTER WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>75455</B><BR>
(Zip Code)<BR>  </FONT>
</TD>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant&#146;s
telephone number, including area code:<BR>
(903) 572-9881   </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities registered
pursuant to Section 12(b) of the Act:  None  </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities registered
pursuant to Section&nbsp;12(g) of the Act:   </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Common Stock, par value<BR>
$1.00 per share  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes&nbsp;|X|&nbsp;&nbsp;No |_|.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Act). Yes&nbsp;|_|&nbsp;&nbsp;No&nbsp;|X|   </FONT> </P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrant&#146;s
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.&nbsp;|_|  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of February 20, 2003, the number of outstanding shares of Common Stock was 2,921,928. As
of June 28, 2002, the last business day of the registrant&#146;s most recently completed
second fiscal quarter, the aggregate market value of the shares of Common Stock held by
non-affiliates, based on the closing price of the Common Stock on the Nasdaq National
Market System on such date, was approximately $20.7 million.  </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documents Incorporated
by Reference:   </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portions
of the Company&#146;s Proxy Statement relating to the 2003 Annual Meeting of Shareholders,
which will be filed within 120 days after December 31, 2002, are incorporated by reference
into Part III, Items 10-13 of this Form 10-K.  </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART I   </FONT></H1>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SPECIAL CAUTIONARY
NOTICE REGARDING FORWARD-LOOKING INFORMATION  </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements
and financial discussion and analysis contained in this Annual Report on Form 10-K that
are not historical facts are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements describe the Company&#146;s future plans, strategies and expectations, are
based on assumptions and involve a number of risks and uncertainties, many of which are
beyond the Company&#146;s control. The important factors that could cause actual results
to differ materially from the forward-looking statements include, without limitation:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in interest rates and market prices, which could reduce the Company&#146;s net interest
margins,                   asset valuations and expense expectations;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in the levels of loan prepayments and the resulting effects on the value of the Company&#146;s
loan                   portfolio;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in local economic and business conditions which adversely affect the Company&#146;s
customers and their ability to transact profitable business with the Company, including
the ability of its borrowers to repay their loans according to their terms or a change in
the value of the related collateral;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>increased
competition for deposits and loans adversely affecting rates and terms;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
timing, impact and other uncertainties of the Company&#146;s potential future
acquisitions, including the Company&#146;s ability to identify suitable future
acquisition candidates, the success or failure in the integration of their operations,
and the Company&#146;s ability to enter new markets successfully and capitalize on growth
opportunities;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>increased
credit risk in the Company&#146;s assets and increased operating risk caused by a
material change in commercial, consumer and/or real estate loans as a percentage of the
total loan portfolio;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
failure of assumptions underlying the establishment of and provisions made to the
allowance for loan                   losses;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in the availability of funds resulting in increased costs or reduced liquidity;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in the Company&#146;s ability to pay dividends on its Common Stock;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>increased
asset levels and changes in the composition of assets and the resulting impact on the
                  Company&#146;s capital levels and regulatory capital ratios;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
Company&#146;s ability to acquire, operate and maintain cost effective and efficient
systems without incurring unexpectedly difficult or expensive but necessary technological
changes;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
loss of senior management or operating personnel and the potential inability to hire
qualified personnel at reasonable compensation levels;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
effects of the Internal Revenue Service&#146;s examination regarding the Company&#146;s leveraged
leasing                   transactions;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in economic and business conditions which would adversely affect the value of the
Aircraft Finance Trust (&#147;AFT&#148;), and cause the Company to not fully realize its
current investment in AFT; and   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 2 -  </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>changes
in status of government regulations or their interpretations applicable to bank holding
companies and the Company&#146;s present and future banking and other subsidiaries,
including changes in tax requirements and tax rates.   </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
written or oral forward-looking statements attributable to the Company are expressly
qualified in their entirety by these cautionary statements.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A001>Item 1.</A> <I>Business</I></B>  </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>General </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guaranty
Bancshares, Inc. (the &#147;Company&#148;) was incorporated as a business corporation
under the laws of the State of Texas in 1980 to serve as a holding company for Guaranty
Bond Bank, formally known as Guaranty Bank, (the &#147;Bank&#148;), which was chartered in
1913, and for Talco State Bank, which was chartered in 1912 and merged into the Bank in
1997. The Company&#146;s headquarters are located at 100 West Arkansas, Mount Pleasant,
Texas 75455, and its telephone number is (903) 572-9881.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has grown through a combination of internal growth, the acquisition of community
banks and the opening of new community banking offices. In 1992, the Company established
its Deport, Texas location by acquiring certain assets and liabilities of the First
National Bank of Deport (the &#147;Deport Bank&#148;). The Deport Bank also had a branch
in Paris, Texas, which the Company acquired. To enhance its expansion into the Paris
community, in 1994 the Company constructed a new facility to serve as its Paris location.
In 2001, the Paris facility was expanded from approximately 5,400 square feet to
approximately 9,700 square feet, again to service the expanded customer base. In 1993, the
Company purchased a commercial bank in Bogata, Texas and in 1996 opened a second
retail-service banking facility in Mount Pleasant. In 1997, the Company merged Talco State
Bank into the Bank and opened a full-service location in Texarkana. Texarkana is the
center of a trade area encompassing approximately 123,000 people. Management of the
Company believes that this trade area provides opportunity for strong continued growth in
loans and deposits. Texas Highway 59 (scheduled to become Interstate 69), which serves as
the primary &#147;NAFTA Highway&#148; linking the interior United States and Mexico, is a
main artery to Texarkana. The increased traffic along this NAFTA Highway is expected to
enhance economic activity in this area and create more opportunities for growth. In 1998,
the Company completed a new facility in Texarkana to enhance its expansion in the
Texarkana market. In 1999, the Company opened a full-service location in Pittsburg, Texas,
a community of approximately 4,500 people located 12 miles from Mount Pleasant. Also in
1999, the Company acquired the First American Financial Corporation, (&#147;First
American&#148;), with locations in Sulphur Springs and Commerce, Texas. The Company also
acquired First American&#146;s wholly owned mortgage company. In 2000, the operations of
the mortgage subsidiary, which were being continued by the Company under the name Guaranty
Mortgage Company, were merged into the Bank. Also in August 2000, the Company was granted
approval by the Texas Department of Banking to open a loan production office in Fort
Stockton, Texas, located in the western portion of Texas. In December of 2000, the Company
was granted approval by the Banking Department to operate this facility as a full-service
bank location. As of December 31, 2002, product offerings at the Fort Stockton location
are limited to loans and time deposits.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has developed a community-banking network, with most of its offices located in
separate communities. Lending and investment activities are funded from a strong core
deposit base consisting of approximately 39,000 deposit accounts as of December 31, 2002.
Each of the Company&#146;s offices has the authority and flexibility to make pricing
decisions within overall ranges developed by the Company as a form of quality control.
Management of the Company believes that its responsiveness to local customers and ability
to adjust deposit rates and price loans at each location gives it a distinct competitive
advantage. Employees are committed to personal service and developing long-term customer
relationships, and adequate staffing is provided at each location to ensure that
customers&#146; needs are well addressed. The Company provides economic incentives to its
officers to develop additional business for the Company and to cross-sell additional
products and services to existing customers.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company continues to look for additional expansion opportunities, either through
acquisitions of existing financial institutions or by establishing de novo offices. The
Company intends to consider various strategic acquisitions of banks, banking assets or
financial service entities related to banking in those areas that management believes
would complement and help grow the Company&#146;s existing business. The Company is
particularly optimistic about the growth potential in the Texarkana, Sulphur Springs,
Paris, and Mount Pleasant market areas.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>- 3 -  </FONT></P>

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<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
national, regional and local economies have experienced a deterioration and should
continue to do so, though at a slow pace. While the current deterioration will have a
negative affect on the Bank&#146;s earnings and growth, management believes the Bank is
well positioned to weather this event.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank owns interests in five entities which complement the Company&#146;s business: (i)
Guaranty Leasing Company (&#147;Guaranty Leasing&#148;), which finances equipment leases
and has engaged in certain leveraged lease transactions; (ii) Guaranty Company, which owns
real estate for future Bank expansion; (iii) GB Com, Inc., a nominee company; (iv) BSC
Securities, L.C. (&#147;BSC&#148;), which provides brokerage services; and, (v)
Independent Bank Services, L.C. (&#147;IBS&#148;), which performs compliance, loan review,
internal audit and EDP audit functions. These entities are accounted for in the
Bank&#146;s financial statements using the equity method of accounting and are included in
other assets on the balance sheet.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Business </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s guiding strategy is to increase shareholder value by providing customers
with individualized, responsive, quality service and to augment its existing market share.
The Company&#146;s main objective is to increase loans and deposits through additional
expansion opportunities in Texas, while stressing efficiency and maximizing profitability.
In furtherance of this objective, the Company has employed the following operating
strategies:  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Focus
On Community Banking. </I>The Company has developed a reputation of being a premier provider
of financial services to small and medium-sized businesses, professionals and individuals
in Northeast Texas. Management believes the Company&#146;s reputation for providing
personal, professional and dependable service is well established in communities located
in this area. Each of the Company&#146;s full-service branch locations is administered by
a local President with knowledge of the community and lending expertise in the specific
industries found in the community, whether it is agriculture, manufacturing and commerce
or professional services. Decisions regarding loans are made at each location in a timely
manner.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Controlled
Core Growth. </I>In recent years, the Company has increased its market share in each of the
communities in which it maintains a full-service banking facility. In its principal
location of Mount Pleasant, the Company&#146;s market share of financial institution
deposits based on the FDIC Deposit Market Share data as of June 30, 2002 is approximately
43.7%. Deposits at the Paris location grew 10.6% in 2001 and 15.4% in 2002. Deposits at
the Commerce location grew 38.0% in 2001 and 27.9% in 2002. Deposits at the Pittsburg
location, which opened in May 2000, grew $2.9 million in 2001 and $4.4 million in 2002
representing 10.0% of the market share in Camp County. Deposits at the Sulphur Springs
location represent an approximate market share of 15.3%. The Company continues to grow in
its Texarkana market with deposits increasing 19.5% to $23.6 million at December 31, 2002.
The Company is well known in its geographic area as a result of its longevity and
reputation for service. The Company intends to grow by continuing to seek strategic
acquisitions and branching opportunities.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Leadership
Technology. </I>The Company has embraced technological change as a way to remain competitive,
manage operational costs associated with growth and offer superior products to its
customers. Recent technological implementations include Internet Banking, electronic bill
and note payment, document imaging, optical report archival high speed communication via
T-1 lines, remote proof capture, electronic statement delivery, and an automated voice
response system. Currently, the Company is evaluating several additional enhancements that
will improve its ability to deliver information internally to improve productivity and
externally to provide convenience and timeliness to its growing customer base. Such
enhancements include upgrading the core processing system the Bank uses, and electronic
account reconciliation and internal transfers. The Company has made significant
investments in technology, and has become a technological leader in its market.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Offer
Competitive Products. </I>The Company recognizes its competition is not solely banks, but
brokerage houses, insurance companies, credit unions and various other competitors, and
that in order to thrive it must be competitive in the products that it offers. The Company
offers a full range of commercial loan products, including term loans, lines of credit,
fixed asset loans, real estate loans and working capital loans. The Company also offers
consumers a full range of personal loan products including automobile loans, home
improvement loans, consumer loans and mortgage loans. The Company also has a wide variety
of deposit products, including a Premier Money Market Account that pays a rate competitive
with most brokerage investment accounts and has been very attractive to customers. This
product, coupled with certificates of deposit, NOW accounts, savings accounts, Internet
banking, free checking, debit cards and overdraft protection, gives the customer a full
complement of deposit products at competitive rates.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;4&nbsp;-  </FONT></P>

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</TABLE>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Expand
Revenue Sources. </I>In order to provide service to its customers and to augment revenues, the
Company offers brokerage services through BSC, a full-service brokerage company. BSC
offers a complete array of investment options including stocks, bonds, mutual funds,
financial and retirement planning, tax advantaged investments and asset allocations. BSC
offers securities through Southwest Securities, a Texas-based independent clearing firm
and is licensed and regulated through the National Association of Securities Dealers, the
Securities and Exchange Commission and various state and federal banking authorities. The
Company&#146;s Trust Department offers complete trust services, including estate
administration and custody, trust and asset management services. Management believes that
an aging affluent population will foster an increase in the need for professional estate
administration services. The maturing of the baby boomer generation is creating a market
for asset management services. The Trust Department is in a unique position since there is
little competition for trust services in the Company&#146;s markets. Because of the
Company&#146;s strong presence in its markets, management believes that banking
relationships can be leveraged into growth for the Trust Department. Growth in trust
assets and corresponding management fees will result from expanding estate administration,
traditional trust services, asset management services and custodial services in the
Company&#146;s markets.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Improve
Operating Efficiencies. </I>In order to control overhead expenses, the Company seeks to
provide a full range of services as effectively as possible. Through BSC, the Company is
able to provide its customers with full brokerage services without having to carry the
entire cost itself due to a shared cost agreement with other banks. Similarly, the Company
enjoys the compliance and loan review functions provided by IBS on a shared cost basis
with a group of other banks participating in this arrangement. The Company has spent the
last ten years and considerable revenue expanding its market and improving the delivery of
its financial products, which has resulted in a higher than desired efficiency ratio.
Beginning with the acquisition of the Deport Bank in 1992, the Company has added ten
locations. As a result, it has taken longer for the Company to achieve the desired
economies of scale, but with its growth rate, those economies are beginning to be realized
and the efficiency ratio is expected to show declining trends in the future. The Company
has the support staff and related fixed asset investments to accommodate additional growth
and enjoy additional economies of scale.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Training. </I>An
effective training program is critical to the Bank&#146;s success. The rapid
growth experienced by the Bank, changes in technology, changes in bank
regulations, and staff development all contribute to the need for a strong
training program. To this end, the Human Resources Manager has been charged
with developing and implementing a more formalized training program. In
addition, a new computerized training room was set up in the fourth quarter of
2002.  </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Competition </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
banking business is highly competitive, and the profitability of the Company depends
principally on the Company&#146;s ability to compete in the market areas in which its
banking operations are located. The Company competes with other commercial banks, savings
banks, savings and loan associations, credit unions, finance companies, mutual funds,
insurance companies, brokerage and investment banking firms, asset-based non-bank lenders
and certain other non-financial entities, including retail stores which may maintain their
own credit programs and certain governmental organizations which may offer more favorable
financing than the Company. The Company has been able to compete effectively with other
financial institutions by emphasizing customer service, technology and local office
decision-making, by establishing long-term customer relationships and building customer
loyalty, and by providing products and services designed to address the specific needs of
its customers. Competition from both financial and non-financial institutions is expected
to continue.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Gramm-Leach-Bliley Act, effective March 11, 2000, securities firms and insurance
companies that elect to become financial holding companies may acquire banks and other
financial institutions. <B>See "&#150;Supervision and Regulation &#150; The Company&#148;.
</B>The financial services industry is also likely to become even more competitive as further
technological advances enable more companies to provide financial services. These
technological advances may diminish the importance of depository institutions and other
financial intermediaries in the transfer of funds between parties.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;5&nbsp;-  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Leveraged Lease
Transactions </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
a series of transactions in 1992, 1994 and 1995, Guaranty Leasing acquired limited
partnership interests in three different partnerships (collectively, the
&#147;Partnerships&#148; or individually, a &#147;Partnership&#148;) engaged in the
equipment leasing business. The investments were structured by TransCapital Corporation
(&#147;TransCapital&#148;) through various subsidiaries and controlled partnerships.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally,
in each of the transactions the Partnership became the lessee of equipment from an
equipment owner (pursuant to a sale and leaseback transaction) and the sublessor of the
equipment to the equipment user. Each Partnership receives note payments from the
equipment owner under a purchase money note given to purchase the equipment from that
Partnership. The Partnership makes lease payments to the equipment owner pursuant to the
master lease of the equipment. In most instances, payments under the purchase money note
equals lease payments under the master lease. Rental payments from the equipment used
under these equipment subleases were sold in advance subject to existing liens for
purchase of the equipment.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Partnership incurs a tax loss while the master lease/sublease structure is in place,
primarily because deductions for rentals paid under the master lease exceed taxable
interest income under the purchase money note. Consequently, Guaranty Leasing has reported
tax losses as a result of its investments in the Partnerships, which were deductible by
the Company. In November 1998, Guaranty Leasing was informed by the Internal Revenue
Service (the &#147;Service&#148;) that it has taken the position that certain losses taken
by one of the three Partnerships during 1994, 1995 and 1996 of $302,000, $410,000 and
$447,000, respectively, would be disallowed. In October 2001, Guaranty Leasing was
informed by the Service that it has taken the position that certain losses taken by that
Partnership during 1997 of $487,000 would also be disallowed. In September 2002, the
Company received from the Service a Notice of Final Partnership Administrative Adjustment
(&#147;FPAA&#148;) disallowing these deductions. Based upon the advice of counsel, the
Company believes that it has correctly reported these transactions for tax purposes and
that it has obtained appropriate legal, accounting and appraisal opinions and authority to
support its positions. However as of December 31, 2002, the Company has recorded and
expensed the tax affect of the disallowed deductions. On February 3, 2003, the Company
filed a petition to begin the process to litigate the matter in the United States District
Court for the Eastern District of Texas. Any final determination with respect to the
Partnership will be binding on the Company. Should the Service pursue an investigation of
and ultimately disallow the related tax deductions taken during the remaining years of the
above partnership as well as the other two partnerships, the Company will be required to
recognize an additional maximum tax liability of approximately $3.9 million plus possible
penalty and interest. The Company is actively contesting the position of the Service in
connection with this matter, and will take appropriate steps necessary to protect its
legal position.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the year ended December 31, 2000, Guaranty Leasing acquired for approximately $2.8
million, a 2.5% ownership interest in an Aircraft Finance Trust (&#147;AFT&#148;), a
special purpose business trust formed to acquire, finance, refinance, own, lease,
sublease, sell and maintain aircraft. AFT was created by General Electric Capital
Corporation, and is a financing transaction through which airlines lease aircraft. AFT is
a business trust formed in 1999 under the laws of the state of Delaware, and it leases
aircraft to airlines around the world. The senior notes issued to AFT are rated AA by
Standard and Poors and the notes are secured by the cash flow from the aircraft leases.
The notes mature in 2024.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the fourth quarter of 2001, on belief that the Company&#146;s investment in AFT was
impaired by declines in air travel and reduced demand for commercial aircraft, an
impairment charge of $1.5 million was recorded and the carrying amount of the investment
was reduced to $1.6 million. During the third quarter of 2001, AFT recorded an impairment
charge of $18.2 million related to two airplanes. In addition, management received
indications the appraised value of AFT&#146;s fleet of airplanes had declined
approximately 9% from their value the past year. Based on these factors, the limited
marketability of the investment, the uncertainty surrounding the air transport industry
and general economic conditions, management believed that the value of its investment in
AFT was permanently impaired.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;6&nbsp;-  </FONT></P>

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<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Employees </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December 31, 2002, the Company had 200 full-time employees and 35 part-time employees,
83 of whom were officers of the Bank. All employees are non-union employees. The Company
provides medical and hospitalization insurance to its full-time employees. The Company
considers its relations with employees to be excellent.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Supervision and
Regulation </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
supervision and regulation of bank holding companies and their subsidiaries is intended
primarily for the protection of depositors, the deposit insurance funds of the Federal
Deposit Insurance Corporation (&#147;FDIC&#148;) and the banking system as a whole, and
not for the protection of the bank holding company shareholders or creditors. The banking
agencies have broad enforcement power over bank holding companies and banks including the
power to impose substantial fines and other penalties for violations of laws and
regulations.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following description summarizes some of the laws to which the Company and the Bank are
subject. References herein to applicable statutes and regulations are brief summaries
thereof, do not purport to be complete, and are qualified in their entirety by reference
to such statutes and regulations.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I><B>The
Company</B></I>. The Company is a bank holding company registered under the Bank Holding Company
Act of 1956, as amended (the &#147;BHC Act&#148;), and it is subject to supervision,
regulation and examination by the Board of Governors of the Federal Reserve System
(&#147;Federal Reserve&#148;). The BHC Act and other federal laws subject bank holding
companies to particular restrictions on the types of activities in which they may engage,
and to a range of supervisory requirements and activities, including regulatory
enforcement actions for violations of laws and regulations.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Regulatory
Restrictions on Dividends; Source of Strength. </I>It is the policy of the Federal Reserve
that bank holding companies should pay cash dividends on common stock only out of income
available over the past year and only if prospective earnings retention is consistent with
the organization&#146;s expected future needs and financial condition. The policy provides
that bank holding companies should not maintain a level of cash dividends that undermines
the bank holding company&#146;s ability to serve as a source of strength to its banking
subsidiaries.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Federal Reserve policy, a bank holding company is expected to act as a source of financial
strength to each of its banking subsidiaries and commit resources to their support. Such
support may be required at times when, absent this Federal Reserve policy, a holding
company may not be inclined to provide it. As discussed below, a bank holding company in
certain circumstances could be required to guarantee the capital plan of an
undercapitalized banking subsidiary.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event of a bank holding company&#146;s bankruptcy under Chapter 11 of the U.S.
Bankruptcy Code, the trustee will be deemed to have assumed and is required to cure
immediately any deficit under any commitment by the debtor holding company to any of the
federal banking agencies to maintain the capital of an insured depository institution, and
any claim for breach of such obligation will generally have priority over most other
unsecured claims.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Modernization. </I>On October 26, 2001, President Bush signed the USA Patriot Act of 2001.
Enacted in response to the terrorist attacks in New York, Pennsylvania and Washington,
D.C. on September 11, 2001, the Patriot Act is intended to strengthen U.S. law
enforcement&#146;s and the intelligence communities&#146; ability to work cohesively to
combat terrorism on a variety of fronts. The potential impact of the Act on financial
institutions of all kinds is significant and wide ranging. The Act contains sweeping
anti-money laundering and financial transparency laws and requires various regulations,
including:  </FONT> </P>

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</TD>
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<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>due
diligence  requirements for financial  institutions  that administer,  maintain or manage
private bank                   accounts or correspondent accounts for non-U.S. persons;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>standards
for verifying customer identification at account opening;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;7&nbsp;-  </FONT></P>

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<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>rules
to promote cooperation among financial institutions, regulators, and law enforcement
entities in identifying parties that may be involved in terrorism or money laundering;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>reports
by non-financial trades and businesses filed with the Treasury Department&#146;s
Financial Crimes Enforcement Network for transactions exceeding $10,000; and;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>filing
of  suspicious  activities  reports  regarding  securities by brokers and dealers if they
believe a                   customer may be violating U.S. laws and regulations.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company is unable to predict the impact of such laws on its financial condition or results
of operations at this time.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Financial Services Modernization Act, federal banking regulators adopted rules that
limit the ability of banks and other financial institutions to disclose non-public
information about consumers to nonaffiliated third parties. Pursuant to the rules,
financial institutions must provide:  </FONT></P>

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</TR>
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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>initial
notices to customers about their privacy policies, describing the conditions under which
they may disclose non-public personal information to nonaffiliated third parties and
affiliates;   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>annual
notices of their privacy policies to current customers; and  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a
reasonable method for customers to &#147;opt out&#148; of disclosures to nonaffiliated third
parties.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
privacy provisions will affect how customer information is transmitted through diversified
financial companies and conveyed to outside vendors. Management believes the privacy
positions will not have a material adverse effect on the Company&#146;s financial
condition or results of operations.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Safe
and Sound Banking Practices. </I>Bank holding companies are not permitted to engage in unsafe
and unsound banking practices. The Federal Reserve&#146;s Regulation Y, for example,
generally requires a holding company to give the Federal Reserve prior notice of any
redemption or repurchase of its own equity securities, if the consideration to be paid,
together with the consideration paid for any repurchases or redemptions in the preceding
year, is equal to 10% or more of the company&#146;s consolidated net worth. The Federal
Reserve may oppose the transaction if it believes that the transaction would constitute an
unsafe or unsound practice or would violate any law or regulation. Depending upon the
circumstances, the Federal Reserve could take the position that paying a dividend would
constitute an unsafe or unsound banking practice.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Federal Reserve has broad authority to prohibit activities of bank holding companies and
their non-banking subsidiaries which represent unsafe and unsound banking practices or
which constitute violations of laws or regulations, and can assess civil money penalties
for certain activities conducted on a knowing and reckless basis, if those activities
caused a substantial loss to a depository institution. The penalties can be as high as
$1.0 million for each day the activity continues.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Anti-Tying
Restrictions. </I>Bank holding companies and their affiliates are prohibited from tying the
provision of certain services, such as extensions of credit, to other services offered by
a holding company or its affiliates.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capital
Adequacy Requirements. </I>The Federal Reserve has adopted a system using risk-based capital
guidelines to evaluate the capital adequacy of bank holding companies. Under the
guidelines, specific categories of assets are assigned different risk weights, based
generally on the perceived credit risk of the asset. These risk weights are multiplied by
corresponding asset balances to determine a &#147;risk-weighted&#148; asset base. The
guidelines require a minimum total risk-based capital ratio of 8.0% (of which at least
4.0% is required to consist of Tier 1 capital elements). Total capital is the sum of Tier
1 and Tier 2 capital. As of December 31, 2002, the Company&#146;s ratio of Tier 1 capital
to total risk-weighted assets was 12.06% and its ratio of total capital to total
risk-weighted assets was 13.12%. <B>See &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&#148;.</B>  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;8&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the risk-based capital guidelines, the Federal Reserve uses a leverage ratio
as an additional tool to evaluate the capital adequacy of bank holding companies. The
leverage ratio is a company&#146;s Tier 1 capital divided by its average total
consolidated assets. Certain highly rated bank holding companies may maintain a minimum
leverage ratio of 3.0%, but other bank holding companies may be required to maintain a
leverage ratio of up to 200 basis points above the regulatory minimum. As of December 31,
2002, the Company&#146;s leverage ratio was 8.62%.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
federal banking agencies&#146; risk-based and leverage ratios are minimum supervisory
ratios generally applicable to banking organizations that meet certain specified criteria,
assuming that they have the highest regulatory rating. Banking organizations not meeting
these criteria are expected to operate with capital positions well above the minimum
ratios. The federal bank regulatory agencies may set capital requirements for a particular
banking organization that are higher than the minimum ratios when circumstances warrant.
Federal Reserve guidelines also provide that banking organizations experiencing internal
growth or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels, without significant reliance on
intangible assets.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Imposition
of Liability for Undercapitalized Subsidiaries. </I>Bank regulators are required to take
&#147;prompt corrective action&#148; to resolve problems associated with insured
depository institutions whose capital declines below certain levels. In the event an
institution becomes &#147;undercapitalized,&#148; it must submit a capital restoration
plan. The capital restoration plan will not be accepted by the regulators unless each
company having control of the undercapitalized institution guarantees the
subsidiary&#146;s compliance with the capital restoration plan up to a certain specified
amount. Any such guarantee from a depository institution&#146;s holding company is
entitled to a priority of payment in bankruptcy.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
aggregate liability of the holding company of an undercapitalized bank is limited to the
lesser of 5% of the institution&#146;s assets at the time it became undercapitalized or
the amount necessary to cause the institution to be &#147;adequately capitalized.&#148;
The bank regulators have greater power in situations where an institution becomes
&#147;significantly&#148; or &#147;critically&#148; undercapitalized or fails to submit a
capital restoration plan. For example, a bank holding company controlling such an
institution can be required to obtain prior Federal Reserve approval of proposed
dividends, or might be required to consent to a consolidation or to divest the troubled
institution or other affiliates.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Acquisitions
by Bank Holding Companies. </I>The BHC Act requires every bank holding company to obtain the
prior approval of the Federal Reserve before it may acquire all or substantially all of
the assets of any bank, or ownership or control of any voting shares of any bank, if after
such acquisition it would own or control, directly or indirectly, more than 5% of the
voting shares of such bank. In approving bank acquisitions by bank holding companies, the
Federal Reserve is required to consider the financial and managerial resources and future
prospects of the bank holding company and the banks concerned, the convenience and needs
of the communities to be served, and various competitive factors.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Control
Acquisitions. </I>The Change in Bank Control Act prohibits a person or group of persons from
acquiring &#147;control&#148; of a bank holding company unless the Federal Reserve has
been notified and has not objected to the transaction. Under a rebuttable presumption
established by the Federal Reserve, the acquisition of 10% or more of a class of voting
stock of a bank holding company with a class of securities registered under Section 12 of
the Exchange Act, such as the Company, would, under the circumstances set forth in the
presumption, constitute acquisition of control of the Company.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, any company is required to obtain the approval of the Federal Reserve under the
BHC Act before acquiring 25% (5% in the case of an acquirer that is a bank holding
company) or more of the outstanding Common Stock of the Company, or otherwise obtaining
control or a &#147;controlling influence&#148; over the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I><B>The
Bank</B></I>. The Bank is a Texas-chartered banking association, the deposits of which are insured
by the Bank Insurance Fund (&#147;BIF&#148;) of the FDIC. The Bank is not a member of the
Federal Reserve System; therefore, the Bank is subject to supervision and regulation by
the FDIC and the Texas Department of Banking (&#147;TDB&#148;). Such supervision and
regulation subjects the Bank to special restrictions, requirements, potential enforcement
actions and periodic examination by the FDIC and the TDB. Because the Federal Reserve
regulates the bank holding company parent of the Bank, the Federal Reserve also has
supervisory authority, which directly affects the Bank.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;9&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Equivalence
to National Bank Powers. </I>The Texas Constitution, as amended in 1986, provides that a
Texas-chartered bank has the same rights and privileges that are or may be granted to
national banks domiciled in Texas. To the extent that the Texas laws and regulations may
have allowed state-chartered banks to engage in a broader range of activities than
national banks, the FDICIA has operated to limit this authority. FDICIA provides that no
state bank or subsidiary thereof may engage as principal in any activity not permitted for
national banks, unless the institution complies with applicable capital requirements and
the FDIC determines that the activity poses no significant risk to the insurance fund. In
general, statutory restrictions on the activities of banks are aimed at protecting the
safety and soundness of depository institutions.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Modernization. </I>Under the Gramm-Leach-Bliley Act, a national bank may establish a financial
subsidiary and engage, subject to limitations on investment, in activities that are
financial in nature, other than insurance underwriting as principal, insurance company
portfolio investment, real estate development, real estate investment and annuity
issuance. To do so, a bank must be well capitalized, well managed and have a CRA rating of
satisfactory or better. Subsidiary banks of a financial holding company or national banks
with financial subsidiaries must remain well capitalized and well managed in order to
continue to engage in activities that are financial in nature without regulatory actions
or restrictions, which could include divestiture of the financial subsidiary or
subsidiaries. In addition, a financial holding company or a bank may not acquire a company
that is engaged in activities that are financial in nature unless each of the subsidiary
banks of the financial holding company or the bank has a CRA rating of satisfactory or
better.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
the powers of state-chartered banks with respect to engaging in financial activities are
not specifically addressed in the Gramm-Leach-Bliley Act, state banks, such as the Bank,
will have the same if not greater powers as national banks through the parity provision
contained in the Texas Constitution.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Branching.
</I>Texas law provides that a
Texas-chartered bank can establish a branch anywhere in Texas provided that the
branch is approved in advance by the TDB. The branch must also be approved by
the FDIC, which considers a number of factors, including financial history,
capital adequacy, earnings prospects, character of management, needs of the
community and consistency with corporate powers.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restrictions
on Transactions With Affiliates and Insiders. </I>Transactions between the Bank and its
nonbanking affiliates, including the Company, are subject to Section 23A of the Federal
Reserve Act. In general, Section 23A imposes limits on the amount of such transactions,
and also requires certain levels of collateral for loans to affiliated parties. It also
limits the amount of advances to third parties, which are collateralized by the securities
or obligations of the Company or its subsidiaries.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate
transactions are also subject to Section 23B of the Federal Reserve Act which generally
requires that certain transactions between the Bank and its affiliates be on terms
substantially the same, or at least as favorable to the Bank, as those prevailing at the
time for comparable transactions with or involving other nonaffiliated persons.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
restrictions on loans to directors, executive officers, principal shareholders and their
related interests (collectively referred to herein as &#147;insiders&#148;) contained in
the Federal Reserve Act and Regulation O apply to all insured institutions and their
subsidiaries and holding companies. These restrictions include limits on loans to one
borrower and conditions that must be met before such a loan can be made. There is also an
aggregate limitation on all loans to insiders and their related interests. These loans
cannot exceed the institution&#146;s total unimpaired capital and surplus, and the FDIC
may determine that a lesser amount is appropriate. Insiders are subject to enforcement
actions for knowingly accepting loans in violation of applicable restrictions.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restrictions
on Distribution of Subsidiary Bank Dividends and Assets. </I>Dividends paid by the Bank have
provided a substantial part of the Company&#146;s operating funds and it is anticipated
that dividends paid by the Bank to the Company will continue to be the Company&#146;s
principal source of operating funds. Capital adequacy requirements serve to limit the
amount of dividends that may be paid by the Bank. Under federal law, the Bank cannot pay a
dividend if, after paying the dividend, the Bank will be &#147;undercapitalized.&#148; The
FDIC may declare a dividend payment to be unsafe and unsound even though the Bank would
continue to meet its capital requirements after the dividend.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;10&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
the Company is a legal entity separate and distinct from its subsidiaries, its right to
participate in the distribution of assets of any subsidiary upon the subsidiary&#146;s
liquidation or reorganization will be subject to the prior claims of the subsidiary&#146;s
creditors. In the event of a liquidation or other resolution of an insured depository
institution, the claims of depositors and other general or subordinated creditors are
entitled to a priority of payment over the claims of holders of any obligation of the
institution to its shareholders, including any depository institution holding company
(such as the Company) or any shareholder or creditor thereof.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Examinations.</I> The
FDIC periodically examines and evaluates insured banks. Based upon such an
evaluation, the FDIC may revalue the assets of the institution and require that
it establish specific reserves to compensate for the difference between the
FDIC-determined value and the book value of such assets. The TDB also conducts
examinations of state banks but may accept the results of a federal examination
in lieu of conducting an independent examination.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit
Reports. </I>Insured institutions with total assets of $500 million or more must submit annual
audit reports prepared by independent auditors to federal and state regulators. In some
instances, the audit report of the institution&#146;s holding company can be used to
satisfy this requirement. Auditors must receive examination reports, supervisory
agreements and reports of enforcement actions. In addition, financial statements prepared
in accordance with generally accepted accounting principles in the United States of
America, management&#146;s certifications concerning responsibility for the financial
statements, internal controls and compliance with legal requirements designated by the
FDIC, and an attestation by the auditor regarding the statements of management relating to
the internal controls must be submitted. For institutions with total assets of more than
$3 billion, independent auditors may be required to review quarterly financial statements.
FDICIA requires that independent audit committees be formed, consisting of outside
directors only. The committees of such institutions must include members with experience
in banking or financial management, must have access to outside counsel, and must not
include representatives of large customers.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capital
Adequacy Requirements. </I>The FDIC has adopted regulations establishing minimum requirements
for the capital adequacy of insured institutions. The FDIC may establish higher minimum
requirements if, for example, a bank has previously received special attention or has a
high susceptibility to interest rate risk.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
FDIC&#146;s risk-based capital guidelines generally require state banks to have a minimum
ratio of Tier 1 capital to total risk-weighted assets of 4.0% and a ratio of total capital
to total risk-weighted assets of 8.0%. The capital categories have the same definitions
for the Bank as for the Company. As of December 31, 2002, the Bank&#146;s ratio of Tier 1
capital to total risk-weighted assets was 11.17% and its ratio of total capital to total
risk-weighted assets was 12.21%. <B>See &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&#148;.</B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
FDIC&#146;s leverage guidelines require state banks to maintain Tier 1 capital of no less
than 5.0% of average total assets, except in the case of certain highly rated banks for
which the requirement is 3.0% of average total assets. The TDB has issued a policy, which
generally requires state chartered banks to maintain a leverage ratio (defined in
accordance with federal capital guidelines) of 6.0%. As of December 31, 2002, the
Bank&#146;s ratio of Tier 1 capital to average total assets (leverage ratio) was 8.08%.
<B>See &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#148;.</B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Corrective
Measures for Capital Deficiencies. </I>The federal banking regulators are required to take
&#147;prompt corrective action&#148; with respect to capital-deficient institutions.
Agency regulations define, for each capital category, the levels at which institutions are
&#147;well capitalized,&#148; &#147;adequately capitalized,&#148; &#147;under
capitalized,&#148; &#147;significantly under capitalized&#148; and &#147;critically under
capitalized.&#148; A &#147;well capitalized&#148; bank has a total risk based capital
ratio of 10.0% or higher; a Tier 1 risk based capital ratio of 6.0% or higher; a leverage
ratio of 5.0% or higher; and is not subject to any written agreement, order or directive
requiring it to maintain a specific capital level for any capital measure. An
&#147;adequately capitalized&#148; bank has a total risk based capital ratio of 8.0% or
higher; a Tier 1 risk based capital ratio of 4.0% or higher; a leverage ratio of 4.0% or
higher (3.0% or higher if the bank was rated a composite 1 in its most recent examination
report and is not experiencing significant growth); and does not meet the criteria for a
well capitalized bank. A bank is &#147;under capitalized&#148; if it fails to meet any one
of the ratios required to be adequately capitalized.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;11&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to requiring undercapitalized institutions to submit a capital restoration plan,
agency regulations contain broad restrictions on certain activities of undercapitalized
institutions including asset growth, acquisitions, branch establishment, and expansion
into new lines of business. With certain exceptions, an insured depository institution is
prohibited from making capital distributions, including dividends, and is prohibited from
paying management fees to control persons if the institution would be undercapitalized
after any such distribution or payment.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
an institution&#146;s capital decreases, the FDIC&#146;s enforcement powers become more
severe. A significantly undercapitalized institution is subject to mandated capital
raising activities, restrictions on interest rates paid and transactions with affiliates,
removal of management, and other restrictions. The FDIC has only very limited discretion
in dealing with a critically undercapitalized institution and is virtually required to
appoint a receiver or conservator.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Banks
with risk-based capital and leverage ratios below the required minimums may also be
subject to certain administrative actions, including the termination of deposit insurance
upon notice and hearing, or a temporary suspension of insurance without a hearing in the
event the institution has no tangible capital.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
believes that the Company meets all capital adequacy requirements to which it is subject
at December 31, 2002. The Bank&#146;s capital ratios exceeded the minimum requirements for
&#147;well capitalized&#148; institutions under the regulatory framework for prompt
corrective action at December 31, 2002. As a result, the Company does not believe that
FDICIA&#146;s prompt corrective action regulations will have any material effect on the
activities or operations of the Bank. It should be noted, however, that a bank&#146;s
capital category is determined solely for the purpose of applying the FDIC&#146;s
&#147;prompt corrective action&#148; regulations and that the capital category may not
constitute an accurate representation of the Bank&#146;s overall financial condition or
prospects.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Deposit
Insurance Assessments. </I>The Bank must pay assessments to the FDIC for federal deposit
insurance protection. The FDIC has adopted a risk-based assessment system as required by
FDICIA. Under this system, FDIC-insured depository institutions pay insurance premiums at
rates based on their risk classification. Institutions assigned to higher-risk
classifications (that is, institutions that pose a greater risk of loss to their
respective deposit insurance funds) pay assessments at higher rates than institutions that
pose a lower risk. An institution&#146;s risk classification is assigned based on its
capital levels and the level of supervisory concern the institution poses to the
regulators. In addition, the FDIC can impose special assessments in certain instances. The
current range of BIF assessments is between 0% and 0.27% of deposits.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
FDIC established a process for raising or lowering all rates for insured institutions
semi-annually if conditions warrant a change. Under this new system, the FDIC has the
flexibility to adjust the assessment rate schedule twice a year without seeking prior
public comment, but only within a range of five cents per $100 above or below the premium
schedule adopted. Changes in the rate schedule outside the five-cent range above or below
the current schedule can be made by the FDIC only after a full rulemaking with opportunity
for public comment.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September 30, 1996, President Clinton signed into law an act that contained a
comprehensive approach to recapitalize the Savings Association Insurance Fund
(&#147;SAIF&#148;) and assure the payment of the Financing Corporation&#146;s
(&#147;FICO&#148;) bond obligations. Under this new act, banks insured under the BIF are
required to pay a portion of the interest due on bonds that were issued by FICO to help
shore up the ailing Federal Savings and Loan Insurance Corporation in 1987. The FDIC also
applies an assessment against BIF-assessable deposits to be paid to the Financing
Corporation (&#147;FICO&#148;) to assist in paying interest of FICO bonds, which financed
the resolution of the thrift industry crisis. The FICO assessment on BIF-insured deposits
was approximately 1.70 basis points for the fourth quarter 2002. The FICO assessment rate
is adjusted quarterly.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Enforcement
Powers. </I>The FDIC and the other federal banking agencies have broad enforcement powers,
including the power to terminate deposit insurance, impose substantial fines and other
civil and criminal penalties and appoint a conservator or receiver. Failure to comply with
applicable laws, regulations and supervisory agreements could subject the Company or its
banking subsidiaries, as well as officers, directors and other institution-affiliated
parties of these organizations, to administrative sanctions and potentially substantial
civil money penalties. The appropriate federal banking agency may appoint the FDIC as
conservator or receiver for a banking institution (or the FDIC may appoint itself, under
certain circumstances) if any one or more of a number of circumstances exist, including,
without limitation, the fact that the banking institution is undercapitalized and has no
reasonable prospect of becoming adequately capitalized; fails to become adequately
capitalized when required to do so; fails to submit a timely and acceptable capital
restoration plan; or materially fails to implement an accepted capital restoration plan.
The TDB also has broad enforcement powers over the Bank, including the power to impose
orders, remove officers and directors, impose fines and appoint supervisors and
conservators.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;12&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Brokered
Deposit Restrictions. </I>Adequately capitalized institutions cannot accept, renew or roll
over brokered deposits except with a waiver from the FDIC, and are subject to restrictions
on the interest rates that can be paid on such deposits. Undercapitalized institutions may
not accept, renew or roll over brokered deposits.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cross-Guarantee
Provisions. </I>The Financial Institutions Reform, Recovery and Enforcement Act of 1989
(&#147;FIRREA&#148;) contains a &#147;cross-guarantee&#148; provision which generally
makes commonly controlled insured depository institutions liable to the FDIC for any
losses incurred in connection with the failure of a commonly controlled depository
institution.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Community
Reinvestment Act. </I>The CRA and the regulations issued thereunder are intended to encourage
banks to help meet the credit needs of their service area, including low and moderate
income neighborhoods, consistent with the safe and sound operations of the banks. These
regulations also provide for regulatory assessment of a bank&#146;s record in meeting the
needs of its service area when considering applications to establish branches, merger
applications and applications to acquire the assets and assume the liabilities of another
bank. FIRREA requires federal banking agencies to make public a rating of a bank&#146;s
performance under the CRA. In the case of a bank holding company, the CRA performance
record of the banks involved in the transaction are reviewed in connection with the filing
of an application to acquire ownership or control of shares or assets of a bank or to
merge with any other bank holding company. An unsatisfactory record can substantially
delay or block the transaction.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Consumer
Laws and Regulations. </I>In addition to the laws and regulations discussed herein, the Bank
is also subject to certain consumer laws and regulations that are designed to protect
consumers in transactions with banks. While the list set forth herein is not exhaustive,
these laws and regulations include the Truth in Lending Act, the Truth in Savings Act, the
Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit
Opportunity Act, and the Fair Housing Act, among others. These laws and regulations
mandate certain disclosure requirements and regulate the manner in which financial
institutions must deal with customers when taking deposits or making loans to such
customers. The Bank must comply with the applicable provisions of these consumer
protection laws and regulations as part of their ongoing customer relations.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Instability
of Regulatory Structure. </I>Various legislation, such as the Gramm-Leach-Bliley Act, which
expanded the powers of banking institutions and bank holding companies, and proposals to
overhaul the bank regulatory system and limit the investments that a depository
institution may make with insured funds, is from time to time introduced in Congress. Such
legislation may change banking statutes and the operating environment of the Company and
the Bank in substantial and unpredictable ways. The Company cannot determine the ultimate
effect that the Gramm-Leach-Bliley Act will have or the effect that potential legislation,
if enacted, or implementing regulations with respect thereto, would have, upon the
financial condition or results of operations of the Company or its subsidiaries.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Expanding
Enforcement Authority. </I>One of the major additional burdens imposed on the banking industry
by FDICIA is the increased ability of banking regulators to monitor the activities of
banks and their holding companies. In addition, the Federal Reserve and FDIC possess
extensive authority to police unsafe or unsound practices and violations of applicable
laws and regulations by depository institutions and their holding companies. For example,
the FDIC may terminate the deposit insurance of any institution, which it determines has
engaged in an unsafe or unsound practice. The agencies can also assess civil money
penalties, issue cease and desist or removal orders, seek injunctions, and publicly
disclose such actions. FDICIA, FIRREA and other laws have expanded the agencies&#146;
authority in recent years, and the agencies have not yet fully tested the limits of their
powers.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect
on Economic Environment. </I>The policies of regulatory authorities, including the monetary
policy of the Federal Reserve, have a significant effect on the operating results of bank
holding companies and their subsidiaries. Among the means available to the Federal Reserve
to affect the money supply are open market operations in U.S. Government securities,
changes in the discount rate on member bank borrowings, and changes in reserve
requirements against member bank deposits. These means are used in varying combinations to
influence overall growth and distribution of bank loans, investments and deposits, and
their use may affect interest rates charged on loans or paid for deposits.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;13&nbsp;-  </FONT></P>

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<BR>

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<TD>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
Reserve monetary policies have materially affected the operating results of commercial
banks in the past and are expected to continue to do so in the future. The nature of
future monetary policies and the effect of such policies on the business and earnings of
the Company and the Bank cannot be predicted.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A002>Item 2.</A> <I>Properties</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company conducts business at eleven banking locations, with two located in Mount Pleasant,
eight located in the Northeast Texas communities of Bogata, Commerce, Deport, Paris,
Pittsburg, Sulphur Springs, Talco, Texarkana and one located in the West Texas community
of Fort Stockton. The Company&#146;s headquarters are located at 100 West Arkansas in
Mount Pleasant in a two-story office building. The Company owns all of its locations and
considers the properties to be suitable and adequate for the Company&#146;s present needs.
The following table sets forth specific information on each of the Company&#146;s
locations:  </FONT></P>


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<BR>

<table cellpadding="0" cellspacing="0" width="600" border="0">
  <tr valign="bottom">
    <th><font face="Times New Roman, Times, Serif" size="1"><br>
      Location </font> </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size="1"><br>
      Address </font> </th>
    <th>&nbsp;</th>
    <th colspan="2"><font face="Times New Roman, Times, Serif" size="1">Deposits
      at<br>
      December 31, 2002 </font> </th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="8">
      <hr size="1" noshade>
    </th>
  </tr>
  <tr valign="BOTTOM">
    <th colspan="2"><font face="Times New Roman, Times, Serif" size="1"> </font></th>
    <th colspan="2"><font face="Times New Roman, Times, Serif" size="1"> </font></th>
    <th colspan="4"><font face="Times New Roman, Times, Serif" size="1">(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign="BOTTOM">
    <td width="30%" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="2%" align="LEFT"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td width="49%" align="LEFT"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td width="2%" align="LEFT"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td width="14%" align="RIGHT"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td width="3%" align="LEFT"><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign="BOTTOM">
    <td width="30%" align="LEFT"><font face="Times New Roman, Times, serif" size="2">Bogata
      </font></td>
    <td width="2%" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width="49%" align="LEFT"><font face="Times New Roman, Times, serif" size="2">110
      Halesboro Street, Bogata, Texas 75417 </font></td>
    <td width="2%" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width="14%" align="RIGHT"><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;14,596
      </font></td>
    <td width="3%" align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Commerce
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">1108
      Park Street, Commerce, Texas 75429 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">30,171
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Deport
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">111 Main
      Street, Deport, Texas 75435 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">15,647
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Fort
      Stockton </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">#1 Spring
      Drive, Fort Stockton, Texas 75435 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">967
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;(1)
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Mount
      Pleasant-Downtown </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">100 West
      Arkansas, Mount Pleasant, Texas 75455 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">160,733
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Mount
      Pleasant-South </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">2317
      South Jefferson, Mount Pleasant, Texas 75455 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">5,420
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Paris
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">3250
      Lamar Avenue, Paris, Texas 75460 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">73,942
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Pittsburg
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">116 South
      Greer Blvd., Pittsburg, Texas 75686 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">21,387
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Sulphur
      Springs </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">919 Gilmer
      Street, Sulphur Springs, Texas 75482 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">64,202
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Talco
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">104 Broad
      Street, Talco, Texas 75487 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">14,284
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">Texarkana
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">2202
      St. Michael Drive, Texarkana, Texas 75503 </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">23,601
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
</table>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Location
offers loans and time deposits only.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A003>Item 3.</A> <I>Legal
Proceedings</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company faces ordinary routine litigation arising in the normal course of business. In the
opinion of management, liabilities (if any) arising from such claims will not have a
material adverse effect upon the business, results of operations or financial condition of
the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
March 2000, the Company filed an action in the District Court of Titus County, Texas
against Guaranty Federal Bank, F.S.B., (&#147;Guaranty Federal&#148;) a thrift
institution, after the Company discovered that Guaranty Federal was using the name,
&#147;Guaranty Bank&#148;, in its business dealings. The case sought a declaratory
judgment that the Company has the sole right to the name &#147;Guaranty Bank&#148;. In
November 2001, a settlement was reached. In exchange for $3.0 million, the Company dropped
the lawsuit against Guaranty Federal and the Company agreed to change its name by December
31, 2002. At December 31, 2001, the financial statements of the Company reflect the effect
of this settlement. In October 2002, the Bank officially changed its name to Guaranty Bond
Bank.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;14&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
November 1998, Guaranty Leasing was informed by the Internal Revenue Service (the
&#147;Service&#148;) that it has taken the position that certain losses taken by one of
the three Partnerships during 1994, 1995 and 1996 of $302,000, $410,000 and $447,000,
respectively, would be disallowed. In October 2001, Guaranty Leasing was informed by the
Service that it has taken the position that certain losses taken by that Partnership
during 1997 of $487,000 would also be disallowed. In September 2002, the Company received
from the Service a Notice of Final Partnership Administrative Adjustment
(&#147;FPAA&#148;) disallowing these deductions. Based upon the advice of counsel, the
Company believes that it has correctly reported these transactions for tax purposes and
that it has obtained appropriate legal, accounting and appraisal opinions and authority to
support its positions. However as of December 31, 2002, the Company has recorded and
expensed the tax affect of the disallowed deductions. On February 3, 2003, the Company
filed a petition to begin the process to litigate the matter in the United States District
Court for the Eastern District of Texas. Any final determination with respect to the
Partnership will be binding on the Company. Should the Service pursue an investigation of
and ultimately disallow the related tax deductions taken during the remaining years of the
above partnership as well as the other two partnership, the Company will be required to
recognize an additional maximum tax liability of approximately $3.9 million plus possible
penalty and interest. The Company is actively contesting the position of the Service in
connection with this matter, and will take appropriate steps necessary to protect its
legal position.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A004>Item 4.</A> <I>Submission of
Matters to a Vote of Security Holders</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
matters were submitted to a vote of security holders during the fourth quarter of 2002.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PART II </B>  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A005>Item 5.</A> <I>Market for
Registrant&#146;s Common Equity and Related Shareholder Matters</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Common Stock began trading on May 21, 1998 and is listed on the Nasdaq National Market
System (&#147;Nasdaq NMS&#148;) under the symbol &#147;GNTY&#148;. Prior to that date, the
Company&#146;s Common Stock was privately held and not listed on any public exchange or
actively traded. The Company had a total of 2,931,928 shares outstanding at December 31,
2002. As of December 31, 2002, there were 366 registered shareholders of record. The
number of beneficial shareholders is unknown to the Company at this time.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents the high and low Common Stock prices reported on the Nasdaq NMS
by quarter during the two years ended December 31, 2002:  </FONT></P>


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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="400">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">  </FONT></TH>
     <TH COLSPAN="4"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2002  </FONT><HR SIZE=1 NOSHADE WIDTH=90%></TH>
     <TH COLSPAN="4"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2001  </FONT><HR SIZE=1 NOSHADE WIDTH=90%></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">  </FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">High  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Low  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">High  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Low  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="26%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Fourth quarter  </FONT></TD>
     <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="12%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16  </FONT></TD>
        <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.25  </FONT></TD>
     <TD WIDTH="12%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14  </FONT></TD>
        <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.00  </FONT></TD>
     <TD WIDTH="12%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14  </FONT></TD>
        <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.10  </FONT></TD>
     <TD WIDTH="12%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11  </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.01  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Third quarter  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.00  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.07  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">14  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.10  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.05  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Second quarter  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.15  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.00  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.25  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.75  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">First quarter  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.25  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">12  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.26  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.19  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">.25  </FONT></TD></TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
of Common Stock are entitled to receive dividends when, as and if declared by the
Company&#146;s Board of Directors out of funds legally available therefore. While the
Company has declared dividends on its Common Stock since 1980, and paid semi-annual
dividends aggregating $0.32 per share per annum in 2002, there is no assurance that the
Company will continue to pay dividends in the future.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
principal source of cash revenues to the Company is dividends paid by the Bank with
respect to the Bank&#146;s capital stock. There are certain restrictions on the payment of
such dividends imposed by federal and state banking laws, regulations and authorities. <B>See
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#148; and &#147;Supervision and Regulation &#150; &#147;The Bank&#148;.</B>  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;15&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
cash dividends paid per share by quarter were as follows:  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="400">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">  </FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2002  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2001  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2000  </FONT><HR SIZE=1 NOSHADE WIDTH=75%></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="35%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Fourth quarter  </FONT></TD>
     <TD WIDTH="7%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="14%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;0.17  </FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="14%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;0.15  </FONT></TD>
     <TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="14%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;0.13  </FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Third quarter  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Second quarter  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.15  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.13  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.12  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">First quarter  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;  </FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Securities Authorized
for Issuance Under Equity Compensation Plans </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company currently has stock options outstanding. The options were granted under the
Company&#146;s 1998 Stock Incentive Plan which was approved by the Company&#146;s
shareholders. The following table provides information as of December 31, 2002 regarding
the Company&#146;s equity compensation plans under which the Company&#146;s equity
securities are authorized for issuance:  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=1>EQUITY COMPENSATION PLAN INFORMATION </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(a) </FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(b) </FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(c) </FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Plan category </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number of securites to<BR>
be issued upon exercise<BR>
of outstanding options<BR>
warrants and rights </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Weight-average<BR>
exercise price of<BR>
outstanding options </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=1><BR>Number of securities<BR>
remaining available for<BR>
future issurance under<BR>
equity compensation<BR>
plans (excluding securites<BR>
reflected in column (a) </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="35%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Equity compensation plans </FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH="17%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH="17%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH="17%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;approved by security holders </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>104,500 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.91 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>893,500 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Equity compensation plans not </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;approved by security holders </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>104,500 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.91 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>893,500 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=2></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE=2></TD><TD></TD>
     <TD ALIGN="RIGHT"><HR NOSHADE SIZE=2></TD><TD></TD></TR>
</TABLE>
<BR><BR>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A006>Item 6.</A> <I>Selected
Financial Data</I></B>  </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SELECTED CONSOLIDATED
FINANCIAL DATA OF THE COMPANY </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following selected consolidated financial data should be read in conjunction with the
Consolidated Financial Statements of the Company and the notes thereto, appearing
elsewhere in this Annual Report on Form 10-K, and the information contained in &#147;Item
7. Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations.&#148;  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;16&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents selected historical consolidated financial data as of and for the
five years ended December 31, 2002 and are derived from the Company&#146;s Consolidated
Financial Statements, which have been audited by independent certified public accountants.  </FONT></P>

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</TR>
</TABLE>
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<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=760>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=15><FONT FACE="Times New Roman, Times, Serif" SIZE=1>As of and for the Years Ended December 31 </FONT>
      <HR WIDTH=98% SIZE=1 NOSHADE>
    </TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2002 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2001 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2000 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>1999 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>1998 </FONT>
      <hr width=95% size=1 NOSHADE>
    </TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=15><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(Dollars in thousands, except per share data) </FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Income Statement Data:</B>  </FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest income </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      28,955 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      29,861 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      29,017 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      21,568 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      18,368 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12,272 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,363 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,742 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,506 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8,951 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16,683 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13,498 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12,275 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11,062 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9,417 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provision for loan losses </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,260 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,385 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>595 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>310 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>540 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision for loan losses </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15,423 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12,113 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11,680 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,752 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8,877 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Noninterest income </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,056 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,201 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,723 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,374 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,826 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Noninterest expense </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14,692 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13,519 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12,140 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,259 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8,488 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings before taxes </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,787 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,795 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,263 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,867 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,215 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provision for income tax expense </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,410 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,505 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>755 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>745 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>541 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,377 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,290 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,508 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,122 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,674 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Preferred stock dividend </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings available to common shareholders </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       4,377 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       3,290 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       2,508 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       3,122 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       2,637 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><BR>Common Share Data (1):</B>  </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net earnings (basic) (2) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        1.46 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        1.09 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        0.80 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        1.03 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>        0.95 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net earnings (diluted)  (2) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.45 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.09 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.80 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.03 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.95 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Book value </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.81 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.59 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.67 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.77 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.21 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tangible book value </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.01 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.82 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.85 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.81 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.14 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash dividends </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.32 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.28 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.25 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.25 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.24 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dividend payout ratio </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.73 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.56 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.70 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.58 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26.38 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Weighted average common shares outstanding-basic </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(in thousands) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,991 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,016 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,126 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,045 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,782 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Weighted average common shares outstanding-diluted </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(in thousands) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,013 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,027 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,133 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,045 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,782 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Period end shares outstanding (in thousands) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,932 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,004 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,044 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,232 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,898 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><BR>Balance Sheet Data:</B>  </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total assets </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     517,968 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     460,509 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     411,031 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     370,438 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     272,906 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>106,992 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>81,715 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>81,620 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>79,761 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>51,367 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Loans held for sale </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,727 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,634 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>172 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Loans </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>359,888 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>329,621 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>287,163 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>255,209 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>185,886 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Allowance for loan losses </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,692 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,346 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,578 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,491 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,512 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total deposits </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>424,950 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>383,279 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>358,265 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>328,637 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>242,325 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total common shareholders&#146; equity </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34,644 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31,827 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29,425 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28,496 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23,796 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
</TABLE>
<BR>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;17&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=760>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=15><FONT FACE="Times New Roman, Times, Serif" SIZE=1>As of and for the Years Ended December 31 </FONT>
      <HR WIDTH=98% SIZE=1 NOSHADE>
    </TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2002 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2001 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2000 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>1999 </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>1998 </FONT>
      <hr width=95% size=1 NOSHADE>
    </TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=15><FONT FACE="Times New Roman, Times, Serif" SIZE=1>(Dollars in thousands, except per share data) </FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Average Balance Sheet Data:</B>  </FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total assets </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     490,620 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     432,200 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     394,496 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     309,247 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     253,633 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>91,710 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>74,826 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>84,933 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>58,308 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>47,972 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Loans </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>342,823 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>302,656 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>267,996 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>213,737 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>169,754 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Allowance for loan losses </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,485 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,735 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,519 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,876 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,397 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total deposits </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>403,125 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>374,566 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>345,342 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>276,525 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>227,919 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total common shareholders&#146; equity </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>33,934 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30,629 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28,266 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25,989 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21,363 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>Performance Ratios:</B>  </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Return on average assets </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.89 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.76 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.64 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.01 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.05 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Return on average common equity </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.90 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.74 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.87 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.01 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.34 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net interest margin </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.73 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.46 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.44 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.93 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.07 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Efficiency ratio (3) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>68.79 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>70.10 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>75.72 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>71.12 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>69.33 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>Asset Quality Ratios(4):</B>  </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nonperforming assets to total loans and other real estate </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.18 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.87 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.73 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.43 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.67 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net loan charge-offs to average loans </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.27 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.20 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.19 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.08 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.09 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Allowance for loan losses to  total loans </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.01 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.01 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.90 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.98 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0.81 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Allowance for loan losses to nonperforming loans (5) </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>114.87 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>59.23 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>54.83 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>244.94 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>130.80 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>Capital Ratios (4):</B>  </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Leverage ratio </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.62 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.44 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.60 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.21 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.30 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>% </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Average shareholders&#146; equity to average total assets </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.92 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.09 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.17 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.40 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.59 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tier 1 risk-based capital ratio </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.06 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.52 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.79 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.86 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.29 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total risk-based capital ratio </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13.12 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.58 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.69 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.83 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13.08 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adjusted
for a seven for one stock split effective March 24, 1998.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net
earnings per share are based upon the weighted average number of common shares
outstanding during the period.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Calculated
by dividing total noninterest expenses by net interest income plus noninterest income,
excluding     securities losses or gains.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At
period end, except net loan charge-offs to average loans, and average shareholders&#146;
equity to average total assets which is for        periods ended at such date.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nonperforming
loans consist of nonaccrual loans, loans contractually past due 90 days or more and
restructured loans.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;18&nbsp;-  </FONT></P>

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</TD>
</TR>
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<BR>

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<TD>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A007>Item 7.</A> <I>Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
statements in this Annual Report on Form 10-K include forward-looking information within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, and are subject to the &#147;safe
harbor&#148; created by those sections. These forward-looking statements involve certain
risks and uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. Such risks and uncertainties include, but are not limited
to, the factors listed under &#147;Special Cautionary Notice Regarding Forward Looking
Information,&#148; included on page 3 of this report and those described in this
discussion and analysis. Management&#146;s Discussion and Analysis of Financial Condition
and Results of Operations analyzes the major elements of the Company&#146;s balance sheets
and statements of earnings. This section should be read in conjunction with the
Company&#146;s Consolidated Financial Statements and accompanying notes and other detailed
information appearing elsewhere in this Annual Report on Form 10-K.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Application of
Critical Accounting Policies And Accounting Estimates </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. While the Company bases its
estimates on historical experience, current information and other factors deemed to be
relevant, actual results could differ from those estimates.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company considers accounting estimates to be critical to its reported financial results if
(i) the accounting estimate requires management to make assumptions about matters that are
highly uncertain and (ii) different estimates that management reasonably could have used
for the accounting estimate in the current period, or changes in the accounting estimate
that are reasonably likely to occur from period to period, would have a material impact on
the Company&#146;s financial statements. Accounting polices related to allowance for loan
losses and loss contingencies are considered to be critical as these policies involve
considerable subjective judgment and estimation by management.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Critical
accounting policies, and the Company&#146;s procedures related to these policies, are
described in detail below. Also see Note 1 &#150; Summary of Significant Accounting
Policies in the accompanying Notes to Consolidated Financial Statements.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Allowance
for Loan Losses. </I>The allowance for loan losses is a reserve established through a
provision for loan losses charged to expense and represents management&#146;s best
estimate of probable losses that have been incurred within the existing portfolio of
loans. The allowance, in management&#146;s judgment, is necessary to reserve for estimated
loan losses and risks inherent in the loan portfolio. In estimating the allowance for loan
losses, management considers historical charge-off experience, loan delinquencies, the
credit worthiness of individual customers, economic conditions affecting specific customer
industries and general economic conditions, among other factors. Should any of these
factors change, the Company&#146;s estimate of probable loan losses could also change,
which could affect the level of the future provisions for loan losses. See additional
discussion under the sections captioned, &#147;Allowance for Loan Losses&#148; and
&#147;Provision for Loan Losses,&#148; included elsewhere in this Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations. Also see Note 3
&#150; Loans and Allowance for Loan Losses in the accompanying Notes to Consolidated
Financial Statements.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Loss
Contingencies. </I>There are times when non-recurring events occur that require management to
consider whether an accrual for a loss contingency is appropriate. Accruals for such loss
contingencies typically relate to legal proceedings and other claims and are recorded when
management believes the likelihood of an adverse outcome is probable and the amount of the
loss is reasonably estimable. Contingent liabilities are often resolved over long time
periods. Estimating probable losses requires analysis of multiple forecasts that often
depend on judgments about potential actions by third parties. While there can be no
assurance, the Company currently believes the outcome of current outstanding legal
proceedings will not have a material adverse effect on the Company&#146;s business,
financial condition or results of operations. The outcomes are inherently uncertain, and
it is possible that some of these matters may be resolved materially adversely to the
Company. The adverse resolution of any one or more of these matters could have a material
adverse effect on the Company&#146;s financial condition or results of operations.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;19&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Overview </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
earnings available to common shareholders were $4.4 million, $3.3 million and $2.5 million
for the years ended December 31, 2002, 2001 and 2000, respectively, and diluted net
earnings per share were $1.45, $1.09 and $0.80 for these same periods. The increase in
earnings from 2001 to 2002 resulted primarily from an increase in net interest income,
caused by a growth in interest-earning assets and a higher net interest margin and a
decrease in provision for loan losses and income taxes, partially offset by a decrease in
noninterest income and an increase in noninterest expense. Average interest-earning assets
increased from $390.3 million to $447.4 million, or 14.6% in 2002 while the net interest
margin was 3.46% in 2001 compared to 3.73% in 2002, an increase of 7.8%. The provision for
loan losses decreased from $1.4 million in 2001 to $1.3 million in 2002, while the
provision for income taxes decreased from $1.5 million to $1.4 million. Noninterest income
decreased $1.1 million, or 18.5%, from $6.2 million in 2001 to $5.1 million in 2002. This
decrease was primarily due to $3.0 million in nonrecurring gain recognized during 2001
from the settlement of the Guaranty Federal lawsuit. This nonrecurring gain, however, was
partially offset in 2001 by a $1.5 million impairment charge recognized on the
Company&#146;s investment in AFT. Noninterest expenses increased $1.2 million, or 8.7%
during 2002 compared to 2001 primarily due to increases in personnel related cost. The
increase in earnings from 2000 to 2001 resulted primarily from an increase in net interest
income, caused by a growth in interest-earning assets and a lower cost of funds, and an
increase in noninterest income offset by an increase in the provision for loan losses and
an increase in noninterest expense. The Company posted returns on average assets of 0.89%,
0.76% and 0.64 % and returns on average common equity of 12.90%, 10.74% and 8.87% in 2002,
2001 and 2000, respectively.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
assets at December 31, 2002 and 2001 were $518.0 million and $460.5 million, respectively.
Total deposits at December 31, 2002 and 2001 were $425.0 million and $383.3 million,
respectively. Deposits increased by $41.7 million, or 10.9% in 2002. The increase was
primarily attributable to internal growth in the Paris, Sulphur Springs, Commerce, Deport,
Pittsburg and Texarkana locations. At December 31, 2002 and 2001, securities totaled
$107.0 million and $81.7 million. The increase in securities in 2002 was primarily due to
the investment of funds generated from increases in deposits and Federal Home Loan Bank
advances in excess of loan growth. Common shareholders&#146; equity was $34.6 million and
$31.8 million at December 31, 2002 and 2001, respectively. The increase in common
shareholder&#146;s equity for the year ended December 31, 2002 reflects earnings retention
and an increase in the unrealized gain on securities available for sale, partially offset
by the purchase of treasury stock and payment of dividends.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Results of Operation </B>  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Net Interest Income </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
interest income represents the amount by which interest income on interest-earning assets,
which include securities, loans, and federal funds sold, exceeds interest expense incurred
on interest-bearing liabilities, which include deposits and other borrowed funds. Net
interest income is the principal source of the Company&#146;s earnings. Interest rate
fluctuations, as well as changes in the amount and type of earning assets and liabilities,
combine to affect net interest income.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>2002
versus 2001. </I>Net interest income increased from $13.5 million in 2001 to $16.7 million in
2002, an increase of $3.2 million, or 23.7%, primarily due to a decrease in interest
expense of $4.1 million, or 25.0%, partially offset by a decrease in interest income of
$906,000, or 3.0%. This resulted in net interest margins of 3.73% and 3.46% and net
interest spreads of 3.31% and 2.85% for the years ended December 31, 2002 and 2001,
respectively.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
increase in net interest income for 2002 was primarily due to the decrease in cost of
interest-bearing liabilities from 4.80% in 2001 to 3.16% in 2002. While the Company had an
increase in average loans of $40.2 million, or 13.3% and average securities of $16.8
million, or 22.4%, the impact of these increases were partially offset by lower yields on
interest-earning assets which decreased from 7.65% in 2001 to 6.47% in 2002. The lower
yields and lower costs of funds resulted from a decrease in prime rate during 2001 from
9.50% to 4.75% and a further reduction in 2002 from 4.75% to 4.50%.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;20&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>2001
versus 2000. </I>Net interest income increased from $12.3 million in 2000 to $13.5 million in
2001, an increase of $1.2 million, or 10.0% primarily due to a growth in interest income
of $844,000, or 2.9%, and a decrease in interest expense of $379,000, or 2.3%. This
resulted in net interest margins of 3.46% and 3.44% and net interest spreads of 2.85% and
2.72% for the years ended December 31, 2001 and 2000, respectively.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
increase in total interest income for 2001 was primarily due to growth in average loans of
$34.7 million, or 12.9% and growth in federal funds sold of $9.3 million, or 270.4%, which
contributed an additional $1.4 million and $367,000, respectively, to total interest
income. Total interest income was negatively affected by a reduction in average securities
of $10.1 million, or 11.9% as well as lower yields on loans, securities, and federal funds
sold. The decrease in total interest expense was primarily due to a decrease in the cost
of funds from 5.42% in 2000 to 4.80% in 2001, which offset increases in average
interest-bearing liabilities of $32.3 million, or 10.5%.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;21&nbsp;-  </FONT></P>

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<TD>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents for the periods indicated the total dollar amount of interest
income from average interest-earning assets and the resultant yields, as well as the
interest expense on average interest-bearing liabilities, expressed both in dollars and
rates. No tax equivalent adjustments were made and all average balances are derived from
average daily balances. Nonaccruing loans have been included in the tables as loans
carrying a zero yield.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

<table cellpadding="0" cellspacing="0" width="600">
  <tr valign=Bottom>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=26><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font> </th>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap colspan="27">
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap>&nbsp;</td>
    <td colspan="8"><b><font face="Times New Roman, Times, Serif" size=1>2002</font></b></td>
    <td>&nbsp;</td>
    <td colspan="8"><b><font face="Times New Roman, Times, Serif" size=1>2001</font></b></td>
    <td>&nbsp;</td>
    <td colspan="8"><b><font face="Times New Roman, Times, Serif" size=1>2000</font></b></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap>&nbsp;</td>
    <td colspan="8">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="8">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="8">
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Average<br>
      Outstanding<br>
      Balance </font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1">Interest<br>
      Earned/<br>
      Paid </font> </b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Average<br>
      Yield/<br>
      Rate </font> </b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Average<br>
      Outstanding<br>
      Balance </font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Interest<br>
      Earned/<br>
      Paid </font> </b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Average<br>
      Yield/<br>
      Rate </font> </b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Average<br>
      Outstanding<br>
      Balance </font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Interest<br>
      Earned/<br>
      Paid </font> </b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Average<br>
      Yield/<br>
      Rate </font> </b></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=26><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap width="100%"><font face="Times New Roman, Times, serif" size="1"><b>Assets</b>
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Interest-earning
      assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 342,823
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 24,119
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">7.04
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">%</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 302,656
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 24,591
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">8.13
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">%</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 267,996
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 23,218
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">8.66
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">91,710
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4,629
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5.05
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">74,826
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4,693
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">6.27
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">84,933
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5,589
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">6.58
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
      funds sold and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;interest-bearing
      deposits </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,821
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">207
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">1.61
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,804
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">577
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4.51
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3,457
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">210
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">6.07
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-earning assets &nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">447,354
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">28,955
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">6.47
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">390,286
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">29,861
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">7.65
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">356,386
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">29,017
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">8.14
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Less
      allowance for loan losses </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">(3,485
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">(2,735
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">(2,519
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-earning </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;assets,
      net of allowance </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">443,869
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">387,551
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">353,867
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Non-earning
      assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
      and due from banks </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">14,640
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,508
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,083
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premises
      and equipment </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">13,442
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">13,569
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">13,187
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
      receivable and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
      assets </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">17,437
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">17,975
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">15,066
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
      real estate owned </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">1,232
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">597
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">293
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      assets </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 490,620
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 432,200
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 394,496
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1"><b>Liabilities
      and</b> </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;<b>shareholders&#146;
      equity</b> </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Interest-bearing
      liabilities: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
      savings, and money </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;market
      accounts </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 108,664
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 1,507
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">1.39
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 104,600
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 2,704
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">2.59
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 97,328
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 4,039
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4.15
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time
      deposits </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">231,196
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">8,330
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3.60
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">213,839
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,132
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5.67
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">193,475
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">11,291
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5.84
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-bearing </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;deposits
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">339,860
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">9,837
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">2.89
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">318,439
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">14,836
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4.66
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">290,803
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">15,330
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5.27
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FHLB
      advances and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;federal
      funds purchased </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">40,827
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">1,639
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4.02
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">15,636
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">755
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4.83
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,529
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">812
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">6.48
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">7,750
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">796
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">10.27
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">7,000
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">772
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">11.03
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5,423
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">600
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">11.06
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-bearing </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liabilities
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">388,437
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">12,272
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3.16
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">341,075
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">16,363
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4.80
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">308,755
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">16,742
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">5.42
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Noninterest-bearing
      liabilities: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand
      deposits </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">63,265
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">56,127
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">54,539
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
      interest, taxes and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
      liabilities </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4,984
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">4,369
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">2,936
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      liabilities </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">456,686
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">401,571
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">366,230
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Shareholders&#146;
      equity </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">33,934
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">30,629
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">28,266
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      liabilities and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shareholders&#146;
      equity </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 490,620
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 432,200
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 394,496
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom align="center">
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan="2"><font face="Times New Roman, Times, serif" size="1"></font>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Net
      interest income </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">$&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">16,683
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 13,498
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> 12,275
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Net
      interest spread </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3.31
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">2.85
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">2.72
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="1">Net
      interest margin </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3.73
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3.46
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">3.44
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">% </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=4><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
</table>
<BR>


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<TR VALIGN=TOP>
<TD>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;22&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following schedule presents the dollar amount of changes in interest income and interest
expense for the major components of interest-earning assets and interest-bearing
liabilities and distinguishes between the changes in interest income and interest expense
related to changes in average outstanding balances and the volatility of interest rates.
For purposes of this table, changes attributable to both rate and volume, which can be
segregated, have been allocated proportionately to changes due to rate and changes due to
volume.  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>

<table cellpadding="0" cellspacing="0" width="600">
  <tr valign="BOTTOM">
    <th><font face="Times New Roman, Times, Serif" size="1"> </font></th>
    <th colspan="12"><font face="Times New Roman, Times, Serif" size="1">Years
      Ended December 31, </font> </th>
  </tr>
  <tr valign="BOTTOM">
    <th>&nbsp;</th>
    <th colspan="12">
      <hr NOSHADE color="Black" size="1">
    </th>
  </tr>
  <tr valign="BOTTOM" align="center">
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">2002
      vs. 2001</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">2001
      vs. 2000</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
  </tr>
  <tr valign="BOTTOM" align="center">
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="5">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="5">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
  </tr>
  <tr valign="BOTTOM" align="center">
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="3"><b><font face="Times New Roman, Times, serif" size="1">Increase
      (Decrease) Due To </font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="3"><b><font face="Times New Roman, Times, serif" size="1">Increase
      (Decrease) Due To</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
  </tr>
  <tr valign="BOTTOM" align="center">
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="3">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan="3">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
  </tr>
  <tr valign="BOTTOM" align="center">
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1">Volume</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1">Rate</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1">Total</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1">Volume</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1">Rate</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1">Total</font></b></td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
  </tr>
  <tr>
    <td></td>
    <td align="RIGHT">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td></td>
    <td align="RIGHT">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td></td>
    <td align="RIGHT">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td></td>
    <td align="RIGHT">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td></td>
    <td align="RIGHT">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td></td>
    <td align="RIGHT">
      <hr NOSHADE color="Black" size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="BOTTOM">
    <th><font face="Times New Roman, Times, Serif" size="1"> </font></th>
    <th colspan="12"><font face="Times New Roman, Times, Serif" size="1">(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><b>Interest-earnings
      assets:</b> </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap width="100%"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;3,266
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$(3,738
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;(472
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;3,001
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp; </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;(1,628
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;1,373
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">1,056
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(1,120
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(64
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(642
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(254
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(896
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
      funds sold and interest <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; bearing deposits </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">1
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(371
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(370
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">422
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">55
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">367
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap>
      <p><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
        increase (decrease) in<br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        interest income </font></p>
    </td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4,323
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(5,229
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(906
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">2,781
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(1,937
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">844
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2"><b>Interest-bearing
      liabilities:</b> </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
      savings and money market<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; accounts </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">106
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(1,303
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(1,197
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">302
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(1,637
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(1,335
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time
      deposits </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">984
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(4,786
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(3,802
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">1,189
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(348
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">841
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FHLB
      advances and federal funds <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; purchased </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">1,216
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(332
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">884
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">201
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(258
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(57
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">83
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(59
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">24
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">172
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">172
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      increase (decrease) in <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      interest expense </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">2,389
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(6,480
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(4,091
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">1,864
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(2,243
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">(379
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">)
      </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="1">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign="BOTTOM">
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase
      in net interest income </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;1,934
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;1,251
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;3,185
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;&nbsp;&nbsp;917
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;&nbsp;&nbsp;306
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">$&nbsp;1,223
      </font></td>
    <td align="LEFT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="2">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="2">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="2">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="2">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="2">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align="RIGHT" nowrap>
      <hr NOSHADE color="Black" size="2">
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
</table>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Provision for Loan
Losses </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s provision for loan losses is established through charges to operating
income in the form of the provision in order to bring the total allowance for loan losses
to a level deemed appropriate by management of the Company based on such factors as
historical experience, the volume and type of lending conducted by the Company, the amount
of nonperforming assets, regulatory policies, generally accepted accounting principles,
general economic conditions, and other factors related to the collectability of loans in
the Company&#146;s portfolio as discussed under &#147;Allowance for Loan Losses&#148;. In
2001, the Company made significant enhancements to the allowance for loan loss methodology
to better quantify the risk associated with these internal and external factors.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s provision for loan losses for 2002 was $1.3 million compared with $1.4
million for 2001. The decrease in the provision was due primarily to a decrease in total
nonperforming loans of $2.4 million, or 43.1%. Average loans outstanding increased from
$302.7 million for 2001 to $342.8 million for 2002, an increase of $40.1 million, or
13.2%. Total classified loans decreased from $13.0 million at December 31, 2001 to $9.9
million at December 31, 2002, a decrease of $3.1 million, or 23.8%. Management believes
the Company has maintained good asset quality is still as net charge-offs remain at
manageable levels totaling $914,000, or 0.27% of average loans in 2002 compared with
$617,000, or 0.20% of average loans in 2001. The Company&#146;s provision for loan losses
increased from $595,000 in 2000 to $1.4 million in 2001 primarily due to loan growth, an
increase in classified loans, and the national economic conditions.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Noninterest Income </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest
income is an important source of revenue for financial institutions. The Company&#146;s
primary sources of noninterest income are service charges on deposit accounts and other
banking service related fees. Noninterest income for the year ended December 31, 2002 was
$5.1 million, a decrease of $1.1 million from $6.2 million in 2001 but up from $3.7
million in 2000. The decrease is primarily due to a nonrecurring gain of $3.0 million in
2001 in connection with the settlement of the Guaranty Federal lawsuit. This gain
represents the amount received in January 2002 in connection with the November 2001
settlement and concurrent transfer of the Company&#146;s rights to certain intangible
assets. This income was partially offset by a nonrecurring impairment charge during 2001
of $1.5 million associated with the AFT lease transaction.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;23&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2000, Guaranty Leasing, acquired a 2.5% ownership interest in AFT for approximately $2.8
million. The AFT ownership interest is classified as an Other Asset on the Company&#146;s
balance sheet. As of December 31, 2002 and 2001, the book value of the AFT ownership was
$1.6 million. During the fourth quarter of 2001, on belief that the Company&#146;s
investment in AFT was impaired by declines in air travel and reduced demand for commercial
aircraft, an impairment charge of $1.5 million was recorded and the carrying amount of the
investment was reduced to $1.6 million. During the third quarter of 2001, AFT recorded an
impairment charge of $18.2 million related to two airplanes. In addition, management
received indications the apprised value of AFT&#146;s fleet of airplanes had declined
approximately 9% from their value the past year. Based on these factors, the limited
marketability of the investment, the uncertainty surrounding the air transport industry
and general economic conditions, management believed that the value of its investment in
AFT was permanently impaired.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Excluding
the gain on settlement of litigation and the impairment charge of the AFT, recurring
noninterest income for 2001 totaled $4.6 million. Excluding these items in 2001,
noninterest income for 2002 reflects an increase of $495,000, or 10.9%, over 2001. The
year ended December 31, 2002 reflected an increase in service charge income of $279,000
over the same period in 2001 and $561,000 over the same period in 2000, representing a
10.4% and a 23.4% increase, respectively. Securities gains decreased $36,000, from
$416,000 in 2001 to $380,000 in 2002. As to normal and recurring noninterest income, the
Company experienced a 10.9% increase to $5.1 million for the twelve months ended December
31, 2002 and a 22.5% increase to $4.6 million for the same period in 2001.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents for the periods indicated the major categories of noninterest
income:  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding="0" cellspacing="0" width="600">
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=9><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr align="center">
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan=2><b><font face="Times New Roman, Times, serif" size="1">2002
      </font> </b>
      <hr width=95% size=1 NOSHADE>
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan=2><b><font face="Times New Roman, Times, serif" size="1">2001
      </font> </b>
      <hr width=95% size=1 NOSHADE>
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
    <td colspan=2><b><font face="Times New Roman, Times, serif" size="1">2000
      </font> </b>
      <hr width=95% size=1 NOSHADE>
    </td>
    <td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=9><font face="Times New Roman, Times, Serif" size=1>(Dollars in
      thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><br>
      Service charges </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> 2,957
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> 2,678
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">$ </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> 2,396
      </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="100%"><font face="Times New Roman, Times, serif" size="2">Securities
      gains, net </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">380 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">416 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(34 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Fee income
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">863 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">668 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">663 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Fiduciary
      income </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">163 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">136 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">109 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Earnings
      from key-man life insurance </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">236 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">204 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">234 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Gain on
      sale of loans </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">272 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">98 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Gain on
      sale of assets </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">97 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">38 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Gain on
      sale of ORE </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">176 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">21 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
      from lease transactions </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">19 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
      from investment in AFT </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">140 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">145</font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Impairment
      of investment in AFT </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(1,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Gain on
      settlement of litigation </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,000
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Other noninterest
      income </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">76 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">149 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">132 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      noninterest income </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 5,056
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 6,201
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 3,723
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
</table>
<BR>


<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>




<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
increase in noninterest income in both 2002 to 2001, excluding the gain on settlement of
litigation and the impairment charge taken in AFT, resulted primarily from service charges
and fee income due to an increase in the number of deposit accounts. Additionally, the
Company continued to emphasize fee-based services resulting in greater income from check
cashing, ATM fees, appraisal fees and wire transfer fees.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Noninterest Expense </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the years ended December 31, 2002, 2001 and 2000, noninterest expense totaled $14.7
million, $13.5 million and $12.1 million, respectively. The $1.2 million, or 8.9%,
increase in 2002 was primarily the result of increases in employee compensation and
benefits. Employee compensation and benefits increased from $7.6 million in 2001 to $8.7
million in 2002, an increase of $1.1 million, or 14.5%. This increase was due to an
increase in full time equivalent employees from 199 at December 31, 2001 to 212 at
December 31, 2002, normal salary adjustments, increased bonus incentives, profit sharing
contributions, and payroll taxes.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;24&nbsp;-  </FONT></P>

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<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
increase in total noninterest expense for 2001 over 2000 of $1.4 million, or 11.4%, was
primarily the result of increases in employee compensation and benefits, fixed asset
expense, and increased litigation expense. Employee compensation and benefits increased
from $6.8 million in 2000 to $7.6 million in 2001, an increase of $801,000, or 11.8%. This
increase was due to an increase in full time equivalent employees from 192 at December 31,
2000 to 199 at December 31, 2001, an increase in incentive compensation, and normal salary
adjustments. Legal and professional fees increased $218,000 or 33.7% primarily due to
litigation involving the lawsuit with Guaranty Federal.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s efficiency ratios, calculated by dividing total noninterest expense
(excluding securities gains and losses) by net interest income plus noninterest income,
were 68.79% in 2002, 70.10% in 2001, and 75.72% in 2000.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents for the periods indicated the major categories of noninterest
expense:  </FONT></P>


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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>(Dollars in
      thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=56% align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Employee compensation and benefits </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=10% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;8,711
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=10% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;7,592
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=10% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;6,791
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Non-staff
      expenses: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Occupancy
      expenses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,992 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,901 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,758 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Legal
      and professional fees </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>933 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>864 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>646 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Director
      and committee fees </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>534 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>412 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>389 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Advertising
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>310 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>278 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>357 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;ATM
      and debit card expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>317 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>279 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>230 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Office
      and computer supplies </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>265 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>429 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>357 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Postage
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>187 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>180 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>156 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Phone
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>194 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>188 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>185 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Other
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,249 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,396 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,271 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      non-staff expenses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,981 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,927 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,349 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      noninterest expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$14,692
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$13,519
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$12,140
      </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>




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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Income Taxes </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
income tax is reported as income tax expense and is influenced by the amount of taxable
income, the amount of tax-exempt income, the amount of non-deductible interest expense and
the amount of other non-deductible expense. The Company utilized tax benefits on leveraged
lease transactions in the amounts of $960,000, $763,000 and $650,000 for 2002, 2001 and
2000, respectively. The effective tax rates for 2002, 2001 and 2000 were 24.37%, 31.39%
and 23.14%, respectively. Income taxes for financial purposes in the consolidated
statements of earnings differ from the amount computed by applying the statutory income
tax rate of 34% to earnings before income taxes. The difference in the statutory rate is
primarily due to the tax benefits on the leveraged lease transactions and non-taxable
income.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally,
the State of Texas imposes a Texas franchise tax. Taxable income for the income tax
component of the Texas franchise tax is the federal pre-tax income, plus certain
officers&#146; salaries, less interest income from federal securities. Total franchise tax
expense was $41,000 in 2002, $50,000 in 2001 and $56,000 in 2000. Such expense was
included as a part of other noninterest expense.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Impact of Inflation </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effects of inflation on the local economy and on the Company&#146;s operating results have
been relatively modest for the past several years. Since substantially all of the
Company&#146;s assets and liabilities are monetary in nature, such as cash, securities,
loans and deposits, their values are less sensitive to the effects of inflation than to
changing interest rates, which do not necessarily change in accordance with inflation
rates. The Company tries to control the impact of interest rate fluctuations by managing
the relationship between its interest rate sensitive assets and liabilities. <B>See
&#147;Quantitative and Qualitative Disclosures About Market Risk&#148; below.</B>  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;25&nbsp;-  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Financial Condition </B>  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Loan Portfolio
(including loans held for sale) </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company provides a broad range of commercial, real estate and consumer loan products to
small and medium-sized businesses and individuals in its market areas. The Company
aggressively pursues qualified lending customers in both the commercial and consumer
sectors, providing customers with direct access to lending personnel and prompt,
professional service. The 86.0% gross loan to deposit ratio as of December 31, 2002,
reflects the Company&#146;s commitment as an active lender in the local communities it
serves. Total loans were $365.6 million at December 31, 2002, an increase of $34.3
million, or 10.4% compared with $331.3 million at December 31, 2001. In 2001, total loans
increased by $43.9 million, or 15.3% to $331.3 million from $287.3 million at December 31,
2000. In 2000, total loans increased by $32.1 million, or 12.6% from $255.2 million at
December 31, 1999. The growth in loans reflects the stable local economy, an aggressive
advertising campaign, the Company&#146;s pro-lending reputation and the solicitation of
new companies and individuals entering the Company&#146;s market areas.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the loan portfolio (including loans held for sale) of the
Company by type of loan as of the dates indicated:  </FONT></P>

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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=19><font face="Times New Roman, Times, Serif" size=1>December
      31, </font>
      <hr width=99% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>1999 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1>1998 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percent </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percent </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percent </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percent </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percent </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=20><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1><br>
      Commercial and industrial </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$&nbsp;&nbsp;58,661
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; &nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>16.05 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$&nbsp;&nbsp;66,641
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; &nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>20.12 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$&nbsp;&nbsp;66,616
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; &nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>23.18 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$&nbsp;&nbsp;61,153
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; &nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>23.96 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$&nbsp;&nbsp;51,589
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; &nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>27.75 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>Agriculture
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9,989 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.73 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>8,589 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.59 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>8,318 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.89 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9,102 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>3.57 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>7,652 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>4.11 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>Real estate:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;Construction
      and land </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;development
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>14,017 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>3.83 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9,492 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.87 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>7,316 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.55 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>7,926 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>3.11 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>3,130 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>1.68 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1-4
      family residential </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>139,156
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>38.06 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>124,480
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>37.58 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>102,442
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>35.65 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>83,777 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>32.83 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>48,376 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>26.02 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
      held for sale </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>5,727 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>1.57 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>1,634 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>0.49 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>172 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>0.06 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Farmland
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>14,765 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>4.04 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9,794 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.96 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>7,716 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.69 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>7,976 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>3.13 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>7,258 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>3.90 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>81,649 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>22.33 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>68,165 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>20.58 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>61,224 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>21.31 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>52,303 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>20.49 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>47,977 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>25.81 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multi-family
      residential </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9,289 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.54 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9,333 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.81 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>4,946 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>1.72 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>6,239 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>2.44 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>844 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>0.45 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>Consumer,
      net of unearned discounts </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>32,362 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>8.85 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>33,126 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>10.00 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>28,585 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>9.95 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>26,733 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>10.47 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>19,060 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>10.28 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
  </tr>
  <tr>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      loans </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$365,615
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>100.00 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$331,254
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>100.00 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$287,335
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>100.00 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$255,209
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>100.00 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>$185,886
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=1>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=1>100.00 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=1>%
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td colspan=2></td>
  </tr>
</table>
<BR>




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<TD>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary lending focus of the Company is on loans to small and medium-sized businesses and
one-to-four family residential mortgage loans. The Company&#146;s commercial lending
products include business loans, commercial real estate loans, equipment loans, working
capital loans, term loans, revolving lines of credit and letters of credit. Most
commercial loans are collateralized and on payment programs. The purpose of a particular
loan generally determines its structure. In almost all cases, the Company requires
personal guarantees on commercial loans to help assure repayment.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Commercial </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s commercial loans are primarily made within its market area and are
underwritten on the basis of the borrower&#146;s ability to service such debt from income.
As a general practice, the Company takes as collateral a lien on any available real
estate, equipment, or other assets obtained owned by the borrower and obtains a personal
guaranty of the borrower. In general, commercial loans involve more credit risk than
residential mortgage loans and commercial mortgage loans and, therefore, usually yield a
higher return. The increased risk for commercial loans is due to the type of collateral
securing these loans. The increased risk also derives from the expectation that commercial
loans generally will be serviced principally from the business&#146; operations, and those
operations may not be successful. As a result of these additional complexities, variables
and risks, commercial loans require more thorough underwriting and servicing than other
types of loans.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;26&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to commercial loans secured by real estate, the Company makes commercial mortgage
loans to finance the purchase of real property, which generally consists of real estate
with completed structures. Commercial mortgage lending typically involves higher loan
principal amounts and the repayment of loans is dependent, in large part, on sufficient
income from the properties securing the loans to cover operating expenses and debt
service. As a general practice, the Company requires its commercial mortgage loans to be
secured by well-managed income producing property with adequate margins and to be
guaranteed by responsible parties. The Company&#146;s commercial mortgage loans are
generally secured by first liens on real estate. Loans with fixed interest rates typically
amortize over a 10 to 15 year period with balloon payments due at the end of one to five
years. In underwriting commercial mortgage loans, consideration is given to the
property&#146;s operating history, future operating projections, current and projected
occupancy, location and physical condition. The underwriting analysis also includes credit
checks, appraisals and a review of the financial condition of the borrower and guarantor.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Construction </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company makes loans to finance the construction of residential and, to a limited extent,
nonresidential properties. Construction loans generally are secured by first liens on real
estate. The Company conducts periodic inspections, either directly or through an agent,
prior to approval of periodic draws on these loans. Construction loans involve additional
risks attributable to the fact that loan funds are advanced upon the security of a project
under construction, and the project is of uncertain value prior to its completion. Because
of uncertainties inherent in estimating construction costs, the market value of the
completed project and the effects of governmental regulation on real property, it can be
difficult to accurately evaluate the total funds required to complete a project and the
related loan to value ratio. As a result of these uncertainties, construction lending
often involves the disbursement of substantial funds with repayment dependent, in part, on
the success of the ultimate project rather than the ability of a borrower or guarantor to
repay the loan. If the Company is forced to foreclose on a project prior to completion,
there is no assurance that it will be able to recover all of the unpaid portion of the
loan. In addition, the Company may be required to fund additional amounts to complete a
project and may have to hold the property for an indeterminate period of time.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>1-4 Family Residential </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company offers a variety of mortgage loan products. The Company&#146;s loans
collateralized by one-to-four family residential real estate generally are originated in
amounts of no more than 90% of the lower of cost or appraised value. The Company generally
requires mortgage title insurance and hazard insurance in the amount of the loan. Of the
mortgages originated, the Company generally retains mortgage loans with short terms or
variable rates and sells longer-term fixed-rate loans that do not meet the Company&#146;s
credit underwriting standards. Prior to the acquisition of First American in September
1999, the Company sold such loans to Texas Independent Bank Mortgage Company; however,
since the First American acquisition, the Company sells these loans directly into the
secondary market.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December 31, 2002, the Company&#146;s one-to-four family residential real estate loan
portfolio (including loans held for sale) was $144.9 million. Of this amount, $45.1
million is repriceable in one year or less and an additional $80.0 million is repriceable
from one year to five years. These high percentages in short-term real estate loans
reflect the Company&#146;s commitment to reducing interest rate risk.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Consumer </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company provides a wide variety of consumer loans including motor vehicle, watercraft,
education loans, personal loans (collateralized and uncollateralized) and deposit account
collateralized loans. The terms of these loans typically range from 12 to 60 months and
vary based upon the nature of collateral and size of loan. As of December 31, 2002, the
Company had no indirect consumer loans, indicating a preference to maintain personal
banking relationships and strict underwriting standards. Consumer loans entail greater
risk than do residential mortgage loans, particularly in the case of consumer loans that
are unsecured or secured by rapidly depreciating assets such as automobiles. In such
cases, any repossessed collateral for a defaulted consumer loan may not provide an
adequate source of repayment for the outstanding loan balance. The remaining deficiency
often does not warrant further substantial collection efforts against the borrower beyond
obtaining a deficiency judgment. In addition, consumer loan collections are dependent on
the borrower&#146;s continuing financial stability, and thus are more likely to be
adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the
application of various federal and state laws may limit the amount which can be recovered
on such loans. During the last several years, management has placed tighter controls on
consumer credit due to record high personal bankruptcy filings nationwide.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;27&nbsp;-  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Agriculture </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company provides agricultural loans for short-term crop production, including cotton, milo
and corn, farm equipment, cattle and agricultural real estate financing. The Company
evaluates agricultural borrowers primarily based on their historical profitability, level
of experience in their particular agricultural industry, overall financial capacity and
the availability of secondary collateral to withstand economic and natural variations
common to the industry. Because agricultural loans present a higher level of risk
associated with events caused by nature, and the volatility of the world market prices on
commodities, the Company routinely makes on-site visits, inspections, and utilize
government guaranteed programs in order to monitor, identify and manage such risks.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company rarely makes loans at its legal lending limit. Lending officers are assigned
various levels of loan approval authority based upon their respective levels of experience
and expertise. All loans above $700,000 are evaluated and acted upon by the Executive
Committee, which meets weekly. All new and renewed loans greater than $100,000 are
reported monthly to the Board of Directors. All new and renewed loans of $400,000 or less
are reported weekly to the Executive Committee. The Company&#146;s strategy for approving
or disapproving loans is to follow conservative loan policies and underwriting practices
which include: (i) granting loans on a sound and collectible basis; (ii) investing funds
properly for the benefit of shareholders and the protection of depositors; (iii) serving
the legitimate needs of the community and the Company&#146;s general market area while
obtaining a balance between maximum yield and minimum risk; (iv) ensuring that primary and
secondary sources of repayment are adequate in relation to the amount of the loan; (v)
developing and maintaining adequate diversification of the loan portfolio as a whole and
of the loans within each category; and (vi) ensuring that each loan is properly documented
and, if appropriate, insurance coverage is adequate. The Company&#146;s loan review and
compliance personnel interact daily with commercial and consumer lenders to identify
potential underwriting or technical exception variances. In addition, the Company has
placed increased emphasis on the early identification of problem loans to aggressively
seek resolution of the situations and thereby keep loan losses at a minimum.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
contractual maturity ranges of the commercial, industrial, agriculture, commercial real
estate, and real estate construction loan portfolio and the amount of such loans with
predetermined interest rates in each maturity range as of December 31, 2002, are
summarized in the following table:  </FONT></P>


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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>December 31,
      2002 </font>
      <hr width=100% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>One Year<br>
      or Less </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>After One<br>
      Through<br>
      Five Years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>After<br>
      Five Years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Total </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>(Dollars in
      thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=50% align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Commercial and industrial </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$30,502
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$24,429
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;3,730
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;58,661
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Agriculture
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,712 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,831 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>446 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9,989 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Real estate
      construction </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,022 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>544 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>451 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>14,017 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Commercial
      real estate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>22,302 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34,779 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>24,568 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>81,649 </font></td>
  </tr>
  <tr>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$72,538
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$62,583
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$29,195
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$164,316
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Loans with a predetermined interest rate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$45,754
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$49,353
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$11,431
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$106,538
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Loans with
      a floating interest rate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>26,784 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,230 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>17,764 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>57,778 </font></td>
  </tr>
  <tr>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$72,538
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$62,583
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$29,195
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$164,316
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;28&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Nonperforming Assets </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has several procedures in place to assist it in maintaining the overall quality of
its loan portfolio. The Company has established underwriting guidelines to be followed by
its officers and also monitors its delinquency levels for any negative or adverse trends.
There can be no assurance, however, that the Company&#146;s loan portfolio will not become
subject to increasing pressures from deteriorating borrower credit due to general economic
conditions.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nonperforming
assets at December 31, 2002, decreased $1.9 million, or 30.4%, to $4.3 million compared
with $6.2 million at December 31, 2001. This decrease reflects a reduction in nonaccrual
loans primarily attributed to transferring the collateral on two large lines of credit
into other real estate. The reduction in past due loans is the result of the
Company&#146;s continued aggressive collection efforts and the balance of reductions were
a result of liquidation of collateral and loan payoffs. Nonperforming assets were $5.0
million at December 31, 2000. This resulted in ratios of nonperforming assets to total
loans plus other real estate of 1.18%, 1.87% and 1.73% for the years ended December 31,
2002, 2001 and 2000, respectively.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company generally places a loan on nonaccrual status and ceases to accrue interest when
loan payment performance is deemed unsatisfactory. Loans where the interest payments
jeopardize the collection of principal are placed on nonaccrual status, unless the loan is
both well secured and in the process of collection. Cash payments received while a loan is
classified as nonaccrual are recorded as a reduction of principal as long as doubt exists
as to collection. If interest on nonaccrual loans had been accrued, such income would have
been approximately $106,000 and $251,000 for 2002 and 2001, respectively. The Company is
sometimes required to revise a loan&#146;s interest rate or repayment terms in a troubled
debt restructuring; however, the Company had no restructured loans or additional
nonperforming interest-earning assets at December 31, 2002, 2001, 2000, 1999 or 1998. In
addition to an internal loan review, the Company retains IBS on a semi-annual basis to
evaluate the loan portfolio.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company maintains current appraisals on loans secured by real estate, particularly those
categorized as nonperforming loans and potential problem loans. In instances where updated
appraisals reflect reduced collateral values, an evaluation of the borrower&#146;s overall
financial condition is made to determine the need, if any, for possible write-downs or
appropriate additions to the allowance for loan losses. The Company records other real
estate at the lower of its fair market value, minus estimated costs to sell the property,
or the recorded investment in the loan on the date of transfer.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents information regarding nonperforming assets at the dates
indicated:  </FONT></P>


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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=14><font face="Times New Roman, Times, Serif" size=1>December
      31, </font>
      <hr width=100% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>1999 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>1998 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=15><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2"><br>
      Nonaccrual loans </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      2,810 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      3,737 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      1,214 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      443 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      290 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Accruing
      loans past due 90 days or more </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">404
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1,912
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3,488
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">574
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">866
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Other real
      estate </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1,111
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">562
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">274
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">79
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">97
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      nonperforming assets </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      4,325 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      6,211 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      4,976 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      1,096 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      1,253 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2"><br>
      Nonperforming assets to total loans and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;other
      real estate </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.18
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.87
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.73
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">0.43
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">0.67
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
</table>
<BR>


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<TR VALIGN=TOP>
<TD>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company considers a loan to be impaired based on current information and events, if it is
probable that the Company will be unable to collect the scheduled payments of principal or
interest when due according to the contractual terms of the loan agreement. The
measurement of impaired loans is based on the present value of expected future cash flows
discounted at the loan&#146;s effective interest rate or the loan&#146;s observable market
price or based on the fair value of the collateral if the loan is collateral-dependent.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;29&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>



<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Allowance for Loan
Losses </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
allowance for loan losses is a reserve established through charges to earnings in the form
of a provision for loan losses. Management has established an allowance for loan losses,
which it believes, is adequate for estimated losses in the Company&#146;s loan portfolio.
Based on an evaluation of the loan portfolio, management presents a quarterly review of
the adequacy of the allowance for loan losses to the Company&#146;s Board of Directors. In
making its evaluation, management considers the diversification by industry of the
Company&#146;s commercial loan portfolio, the effect of changes in the local real estate
market on collateral values, the results of recent regulatory examinations, the effects on
the loan portfolio of current economic indicators and their probable impact on borrowers,
the amount of charge-offs for the period, the amount of nonperforming loans and related
collateral security, the results of management&#146;s internal loan review, the evaluation
of its loan portfolio through a semi-annual external loan review conducted by IBS and the
annual examination of the Company&#146;s financial statements by its independent auditors.
Charge-offs occur when loans are deemed to be uncollectible.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company follows an internal loan review program to evaluate the credit risk in the loan
portfolio. Through the loan review process, the Company maintains an internally classified
loan list, which, along with the delinquency list of loans, helps management assess the
overall quality of the loan portfolio and the adequacy of the allowance for loan losses.
Loans internally classified as &#147;substandard&#148; or in the more severe categories of
&#147;doubtful&#148; or &#147;loss&#148; are those loans that, at a minimum, have clear
and defined weaknesses such as a highly-leveraged position, unfavorable financial ratios,
uncertain repayment sources or poor financial condition, which may jeopardize
recoverability of the debt. At December 31, 2002, the Company had $9.9 million of such
loans compared with $13.0 million at December&nbsp;31, 2001, a decrease of $3.1 million,
or 23.8%. This decrease is primarily due to the improvement, workout, or foreclosure of
nine large loan relationships between $270,000 and $1.4 million, partially offset by the
classification of five new relationships, ranging from $252,000 to $443,000. Specific
reserves have been established for these new lines based on the estimated exposure on
these lines.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the internally classified loan list and delinquency list of loans, the Company
maintains a separate &#147;watch list&#148; which further aids the Company in monitoring
loan portfolios. Watch list loans show warning elements where the present status portrays
one or more deficiencies that require attention in the short term or where pertinent
ratios of the loan account have weakened to a point where more frequent monitoring is
warranted. These loans do not have all of the characteristics of a classified loan
(substandard or doubtful) but do show weakened elements as compared with those of a
satisfactory credit. The Company reviews these loans to assist in assessing the adequacy
of the allowance for loan losses. At December 31, 2002, the Company had $7.1 million of
such loans compared with $2.3 million at December 31, 2001, an increase of $4.8 million,
or 208.7%. This increase is primarily due to the addition of three relationships totaling
$4.4 million. All of the loans associated with these relationships are well secured and
appropriately structured. With the exception of one small loan, all of these borrowers are
current with their payments.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to determine the adequacy of the allowance for loan losses, the Company establishes
both specific and general reserves. The Company establishes specific allocations for the
majority of problem loans based on the estimated exposure in each individual loan. The
exposure is generally identified by determining the present value of estimated future cash
flows or the fair value of collateral if repayment is expected solely from the collateral.
The Company establishes general reserves for non-problem loans primarily based on its
historical charge-off experience. Consideration is also given to the level and trend of
delinquent loans, loan growth, underwriting standards, economic conditions, and other
qualitative factors based on management&#146;s judgment.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
are charged-off against the allowance for loan losses when appropriate. Although
management believes it uses the best information available to make determinations with
respect to the allowance for loan losses, future adjustments may be necessary if economic
conditions differ from the assumptions used in making the initial determinations.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2002, net loan charge-offs totaled $914,000, or 0.27% of average loans outstanding for the
period, compared with $617,000 in net loan charge-offs or 0.20% of average loans for the
year ended December 31, 2001. During 2002, the Company recorded a provision for loan
losses of $1.3 million compared with $1.4 million for 2001. The decrease in provision for
2002 is due primarily to a decrease in classified loans. The Company made a provision for
loan losses of $595,000 for 2000. The increase in provision from 2000 to 2001 is due
primarily to loan growth, an increase in classified loans, and general economic
uncertainty. At December 31, 2002, the allowance for loan losses totaled $3.7 million, or
1.01% of total gross loans. At December 31, 2001, the allowance for loan losses totaled
$3.3 million or 1.01% of gross loans.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;30&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents, for the periods indicated, an analysis of the allowance for loan
losses and other related data:  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=14><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font>
      <hr width=100% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>1999 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>1998 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=15><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>


  <tr valign=Bottom>
    <td align=LEFT width="100%"><font face="Times New Roman, Times, Serif" size=2>Average
       loans outstanding </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      342,823 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      302,656 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      267,996 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      213,737 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      169,754 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>

<tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="100%"><font face="Times New Roman, Times, Serif" size=2>Gross
      loans outstanding at end of period </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      365,615 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      331,255 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      287,335 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      255,209 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      185,886 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Allowance
      for loan losses at beginning </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
      period </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      3,346 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      2,578 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      2,491 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      1,512 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      1,129 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for loan losses </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>1,260
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>1,385
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>595
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>310
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>540
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance acquired
      with First American<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; acquisition </font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=LEFT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=LEFT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=LEFT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>846</font></td>
    <td align=LEFT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=RIGHT nowrap>&nbsp;</td>
    <td align=LEFT nowrap>&nbsp;</td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Charge-offs:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial
      and industrial </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(279
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(462
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(360
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(64
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(113
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real
      estate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(375
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(162
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(146
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(2
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(14
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumer
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(418
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(211
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(172
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(267
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(149
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Recoveries:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial
      and industrial </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>28
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>30
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>80
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>65
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>33
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real
      estate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>57
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>124
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>11
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>42
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>26
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumer
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>73
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>64
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>79
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>49
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>60
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net loan
      charge-offs </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(914
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(617
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(508
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(177
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>(157
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Allowance
      for loan losses at end of period </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      3,692 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      3,346 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      2,578 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      2,491 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      1,512 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Ratio of allowance to end of </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;period
      loans </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>1.01
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>1.01
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.90
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.98
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.81
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Ratio of
      net loan charge-offs to </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;average
      loans </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.27
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.20
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.19
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.08
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>0.09
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Ratio of
      allowance to end of period </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;nonperforming
      loans </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>114.87
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>59.23
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>54.83
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>244.94
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>130.80
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
  </tr>
</table>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;31&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following tables describe the allocation of the allowance for loan losses among various
categories of loans and certain other information for the dates indicated. The allocation
is made for analytical purposes and is not necessarily indicative of the categories in
which future losses may occur. The total allowance is available to absorb losses from any
segment of loans.  </FONT></P>

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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=9><font face="Times New Roman, Times, Serif" size=1>December
      31, </font>
      <hr width=98% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Amount
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Percent of<br>
      Loans to<br>
      Total Loans </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Amount
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Percent of<br>
      Loans to<br>
      Total Loans </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=10><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=100% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance
      of allowance for loan losses applicable to: </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Commercial,
      industrial and agriculture </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      1,892 </font></td>
    <td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>18.78
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      1,792 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>22.71
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Real
      estate: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction
      and land development </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>3.83
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>2.87
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1-4
      family residential (1) </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>138
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>39.63
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>117
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>38.07
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial
      mortgage </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>173
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>22.33
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>138
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>20.58
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Farmland
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>4.04
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>2.96
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multi-family
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>2.54
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>2.81
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Consumer
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>320
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>8.85
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>333
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>10.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Unallocated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>1,169
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>966
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      allowance for loan losses </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      3,692 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>100.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>
      3,346 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, Serif" size=2>100.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap></td>
  </tr>
</table>
<BR>

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</TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
percentage of loans to total loans includes loans held for sale.  </FONT></TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=15><font face="Times New Roman, Times, Serif" size=1>December
      31, </font>
      <hr width=98% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>1999 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>1998 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Amount
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Percent of<br>
      Loans to<br>
      Total Loans </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Amount
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Percent of<br>
      Loans to<br>
      Total Loans </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Amount
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Percent
      of<br>
      Loans to<br>
      Total Loans </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=16><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2">Balance
      of allowance for loan losses </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;applicable
      to: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Commercial,
      industrial and agriculture </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      1,430 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">26.07
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      1,543 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">27.53
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      932 </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">31.86
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Real estate:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Construction
      and land development </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.55
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3.11
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.68
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;1-4
      family residential (1) </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">139
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">35.71
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">110
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">32.83
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">67
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">26.02
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Commercial
      mortgage </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">193
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">21.31
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">176
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">20.49
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">145
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">25.81
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Farmland
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.69
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3.13
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3.90
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Multi-family
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.72
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.44
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">0.45
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Consumer
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">289
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">9.95
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">262
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">10.47
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">166
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">10.28
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Unallocated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">527
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">400
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">202
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      allowance for loan losses </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      2,578 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">100.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      2,491 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">100.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      1,512 </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">100.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
</table>
<BR>

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<TD>

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<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

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</TD>
</TR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
percentage of loans to total loans for 2000 includes loans held for sale.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;32&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD>
<BR>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Securities Available-
for-Sale </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company uses its securities portfolio to ensure liquidity for cash requirements, to manage
interest rate risk, to provide a source of income, to ensure collateral is available for
municipal pledging requirements and to manage asset quality. At December 31, 2002,
investment securities totaled $107.0 million, an increase of $25.3 million from $81.7
million at December 31, 2001. The increase was primarily attributable to $95.9 million in
securities purchases in 2002, partially offset by $71.0 million in securities sold and in
principal repayments. Generally, the growth in securities was funded by increases in
deposits and Federal Home Loan Bank advances in excess of loan growth. The December 31,
2001 net unrealized gain was $1.3 million compared to the December 31, 2002 net unrealized
gain of $2.0 million. At December 31, 2002, securities represented 20.7% of total assets
compared to 17.7% of total assets at December 31, 2001. The yield on the securities
portfolio for 2002 was 5.05% compared to a yield of 6.27% for 2001 and 6.07% for 2000.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2002, the securities portfolio mix changed within various categories. U.S. Government
securities increased from $4.5 million at December 31, 2001 to $14.1 million at December
31, 2002. The Company continues to hold collateralized mortgage obligations
(&#147;CMO&#146;s&#148;) in its securities portfolio. A CMO is collateralized directly by
mortgages or by mortgage-backed securities issued by government agencies. The
Company&#146;s investment in CMO&#146;s decreased from $34.4 million at December 31, 2001
to $25.3 million at December 31, 2002, a decrease of $9.1 million or 26.5%. The Company
also had an increase of $29.1 million in mortgage-backed securities from $34.0 million at
December 31, 2001 to $63.1 million at December 31, 2002. Investments in obligations of
state and political subdivisions decreased from $6.8 million at December 31, 2001 to $1.3
million at December 31, 2002 as securities that were called or sold or matured were not
reinvested in the same category.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the fair value of securities available for sale held by the
Company as of the dates shown:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=8><font face="Times New Roman, Times, Serif" size=1>December 31,
      </font>
      <hr width=100% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=8><font face="Times New Roman, Times, Serif" size=1>(Dollars in
      thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2"><br>
      U.S. government agency securities </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;14,127
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;4,494
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">26,184
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Mortgage-backed
      securities </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">63,148
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">33,952
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">26,602
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Collaterized
      mortgage obligations </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">25,280
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">34,390
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">18,042
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Equity
      securities </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,165
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,112
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,705
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Obligations
      of state and political subdivisions </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,272
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,767
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,087
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      securities </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">106,992
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">81,715
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">81,620
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;33&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the contractual maturity of securities available for sale based
on fair value and their weighted average yields as of December 31, 2002:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding="0" cellspacing="0" width="600">
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=25><font face="Times New Roman, Times, Serif" size=1>December
      31, 2002 </font>
      <hr width=100% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=4 nowrap><font face="Times New Roman, Times, Serif" size=1>Within<br>
      One Year </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4 nowrap><font face="Times New Roman, Times, Serif" size=1>After
      One<br>
      Year but Within<br>
      Five Years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4 nowrap><font face="Times New Roman, Times, Serif" size=1>After
      Five<br>
      Years but Within<br>
      Ten Years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4 nowrap><font face="Times New Roman, Times, Serif" size=1>After
      Ten Years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4 nowrap><font face="Times New Roman, Times, Serif" size=1>Total
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Yield </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Yield </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Yield </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Yield </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Yield </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=25><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width="100%" align="LEFT"><font face="Times New Roman, Times, serif" size="1">U.S.
      Government </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;securities
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      &#151; </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      14,127 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">3.90
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      &#151; </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      &#151; </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      14,127 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">3.90
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%</font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Mortgage-backed
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;securities
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">231
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">5.86
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">5,760
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.72
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">24,857
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.75
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">32,300
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.61
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">63,148
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.70
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">CMOs </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">3,441
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">3.13
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">21,839
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.20
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">25,280
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.07
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Equity
      securities </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">3,165
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">2.36
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">3,165
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">2.36
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">State and
      municipal </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;securities
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">15
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">6.17
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">422
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.32
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">800
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.95
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">35
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">6.75
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">1,272
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">6.91
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Totals
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      246 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">5.86
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      20,309 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.14
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      29,098 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.56
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      57,339 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.33
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      106,992 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">4.40
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td nowrap align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
</table>
<BR>



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<TR VALIGN=TOP>
<TD>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company classifies debt and equity securities at the date of purchase into one of two
categories: held-to-maturity, or available-for-sale. At each reporting date, the
appropriateness of the classification is reassessed. Investments in debt securities are
classified as held-to-maturity and measured at amortized cost in the financial statements
only if management has the positive intent and ability to hold those securities to
maturity. Investments not classified as held-to-maturity are classified as
available-for-sale and measured at fair value in the financial statements with unrealized
gains and losses reported, net of tax, in a separate component of shareholders&#146;
equity until realized. The Company had no securities classified as held to maturity at
December 31, 2002, 2001 or 2000.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed
securities and CMO&#146;s are securities, which have been developed by pooling a number of
real estate mortgages and are principally issued by or guaranteed by federal agencies such
as the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation. These securities are deemed to have high credit ratings and regular monthly
cash flows of principal and interest, which are guaranteed by the issuing agencies. All
the Company&#146;s mortgage-backed securities at December 31, 2002 were agency-issued
collateral obligations.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December 31, 2002, 61.3% of the mortgage-backed and CMO securities held by the Company had
final maturities of more than 10 years. However, unlike U.S. Treasury and U.S. Government
agency securities, which have a lump sum payment at maturity, mortgage-backed and CMO
securities provide cash flows from regular principal and interest payments and principal
prepayments throughout the lives of the securities. Therefore, the average life, or the
average amount of time until the Company receives the total amount invested, of the
mortgage-backed or CMO security will be shorter than the contractual maturity. The Company
estimates the remaining average life of the fixed-rate mortgage-backed and CMO security
portfolio to be less than three years. These securities, when purchased at a premium, will
generally suffer decreasing net yields as interest rates drop because homeowners tend to
refinance their mortgages. Thus, the premium paid must be amortized over a shorter period.
Therefore, securities when purchased at a discount will obtain higher net yields in a
decreasing interest rate environment. As interest rates rise, the opposite will generally
be true. During a period of increasing interest rates, fixed rate mortgage-backed and CMO
securities do not tend to experience heavy prepayments of principal and consequently, the
average lives of these securities will not be unduly shortened.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;34&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 34; page: 34" -->

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<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Premises and Equipment </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premises
and equipment totaled $13.6 million at December 31, 2002 and $13.6 million at December 31,
2001. The net change reflects a decrease of $51,000, or 0.4% in fixed assets. The decrease
is primarily due to the purchase of furniture and computer hardware for the Company offset
by depreciation recorded for the year.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Other Assets </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company owns single premium insurance policies insuring the lives of certain key senior
officers. The net cash surrender value of these polices totaled $5.9 million at December
31, 2002 and $5.1 million at December 31, 2001. At December 31, 2001 the Company also had
recorded a receivable of $3.0 million reflecting the settlement of its lawsuit against
Guaranty Federal. The Company received the $3.0 million in January 2002.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Deposits </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company offers a variety of deposit accounts having a wide range of interest rates and
terms. The Company&#146;s deposit accounts consist of demand, savings, money market and
time accounts. The Company relies primarily on competitive pricing policies and customer
service to attract and retain these deposits. The Company does not have or accept any
brokered deposits.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
deposits increased to $425.0 million at December 31, 2002, from $383.3 million at December
31, 2001, an increase of $41.7 million, or 10.9%. Noninterest-bearing deposits increased
from $63.7 million at December 31, 2001 to $68.5 million at December 31, 2002, an increase
of $4.8 million, or 7.5%. Certificates of deposit increased from $213.5 million at
December 31 2001, to $241.3 million at December 31, 2002, an increase of $27.8 million, or
13.0%. Other interest-bearing deposits increased from $106.0 million at December 31, 2001
to $115.1 million at December 31, 2002, an increase of $9.1 million, or 8.6%. The increase
in deposits is primarily due to a generally increasing customer base across most of the
Company&#146;s market areas. The Paris and Sulphur Springs locations reflected the largest
increases in deposits by dollar volume, combining for a $19.3 million, or 16.3% increase.
Deport, Commerce, Pittsburg, and Texarkana combined for an $21.0 million, or 30.1%
increase, while the remaining locations showed more modest gains. Two locations showed
slight declines in deposits. Management feels that the majority of the locations will
continue to gain market shares as the Company continues to become better known in its
respective market areas. The Company&#146;s ratio of average noninterest-bearing demand
deposits to average total deposits for years ended December 31, 2002, 2001, and 2000, were
15.7%, 15.0%, and 15.8%, respectively.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;35&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
daily average balances and weighted-average rates paid on deposits for each of the years
ended December 31, 2002, 2001 and 2000 are presented below:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=17><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font>
      <hr size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=94% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=18><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Rate </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Rate </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Rate </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width=100%><font face="Times New Roman, Times, serif" size="2"><br>
      Regular savings </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      11,774 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.44
      </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">%
      &nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      10,084 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.97
      </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
      9,497 </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.50
      </font></td>
    <td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">NOW accounts
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">35,740
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.04
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">33,992
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.09
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">31,678
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.96
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Money market
      checking </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">61,150
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">1.58
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">60,524
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.96
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">56,153
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">5.10
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Time deposits
      less than $100,000 </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">132,800
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3.53
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">125,236
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">5.62
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">115,198
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">5.74
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Time deposits
      $100,000 and over </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">98,396
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3.70
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">88,603
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">5.75
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">78,277
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">5.98
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-bearing deposits </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      339,860 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.89
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      318,439 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">4.66
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      290,803 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">5.27
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Noninterest-bearing
      deposits </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">63,265
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">56,127
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">54,539
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      deposits </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      403,125 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">2.44
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      374,566 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3.96
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
      345,342 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">4.44
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
  </tr>
</table>
<BR><BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the amount of the Company&#146;s certificates of deposits by
time remaining until maturity:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> </FONT></TH>
    <TH ALIGN="CENTER" colspan="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">2002
      </FONT>
      <HR WIDTH=100% SIZE=1 NOSHADE>
    </TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD WIDTH="293" ALIGN="LEFT" height="11"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2003
      </FONT></TD>
    <TD WIDTH="140" ALIGN="LEFT" height="11"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD WIDTH="9" ALIGN="left" height="11"><font face="Times New Roman, Times, Serif" size="2">$</font></TD>
    <TD WIDTH="55" ALIGN="RIGHT" height="11"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
      191,478 </FONT></TD>
    <TD WIDTH="101" ALIGN="LEFT" height="11"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="293"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2004
      </FONT></TD>
    <TD ALIGN="LEFT" width="140"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="left" width="9">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="55"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">32,392
      </FONT></TD>
    <TD ALIGN="LEFT" width="101"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="293"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2005
      </FONT></TD>
    <TD ALIGN="LEFT" width="140"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="left" width="9">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="55"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,858
      </FONT></TD>
    <TD ALIGN="LEFT" width="101"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="293"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2006
      </FONT></TD>
    <TD ALIGN="LEFT" width="140"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="left" width="9">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="55"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,927
      </FONT></TD>
    <TD ALIGN="LEFT" width="101"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="293"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2007
      </FONT></TD>
    <TD ALIGN="LEFT" width="140"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="left" width="9">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="55"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8,669
      </FONT></TD>
    <TD ALIGN="LEFT" width="101"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="293"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Thereafter
      </FONT></TD>
    <TD ALIGN="LEFT" width="140"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="left" width="9">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="55"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;
      </FONT></TD>
    <TD ALIGN="LEFT" width="101"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN="2"></TD>
    <TD ALIGN="left" colspan="2">
      <HR NOSHADE SIZE="1" WIDTH="100%">
    </TD>
    <TD width="101"></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="293"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="LEFT" width="140"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
    <TD ALIGN="left" width="9"><font face="Times New Roman, Times, Serif" size="2">$</font></TD>
    <TD ALIGN="RIGHT" width="55"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
      241,323 </FONT></TD>
    <TD ALIGN="LEFT" width="101"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;
      </FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN="2"></TD>
    <TD ALIGN="RIGHT" colspan="2">
      <HR NOSHADE SIZE="2" WIDTH="100%">
    </TD>
    <TD width="101"></TD>
  </TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>





<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Other Borrowings </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
Home Loan Bank (&#147;FHLB&#148;) advances may be utilized from time to time as either a
short-term funding source or a longer-term funding source. FHLB advances can be
particularly attractive as a longer-term funding source to balance interest rate
sensitivity and reduce interest rate risk. The Company is eligible for two borrowing
programs through the FHLB. The first, called &#147;Short Term Fixed,&#148; requires
delivery of eligible securities for collateral. Maturities under this program range from
1-35 days. The Company does not currently have any borrowings under this program. As of
December 31, 2002, the Company does not have any of its investment securities in
safekeeping at the FHLB.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
second borrowing program, the &#147;Blanket Borrowing Program,&#148; is under a borrowing
agreement which does not require the delivery of specific collateral. Borrowings are
limited by the level of qualified, pledgable real estate loans held and FHLB stock owned.
At December 31, 2002, the Company had approximately $42.8 million borrowed of a potential
$169.9 million available under this program, leaving approximately $127.1 million in
available borrowings.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March 23, 2000, the Company, in a private placement, issued $7.0 million (7,000 shares
with a liquidation amount of $1,000 per security) of 10.875% Fixed Rate Capital Trust
Pass-through Securities (&#147;TruPS&#148;) through a newly formed, wholly-owned
subsidiary, Guaranty (TX) Capital Trust I (the &#147;Trust&#148;). The Trust invested the
total proceeds from the sale of the TruPS in 10.875% Junior Subordinated Deferrable
Interest Debentures (the &#147;Debentures&#148;) issued by the Company. The net proceeds
from the sale of the Debentures were used to repurchase shares of the Company&#146;s
stock, provide a $1.5&nbsp;million additional capital contribution to Guaranty Bond Bank
and provide for additional working capital to support growth.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;36&nbsp;-  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 36; page: 36" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
certain exceptions, the amount of the principal and any accrued and unpaid interest on the
Debentures are subordinated in right of payment to the prior payment in full of all senior
indebtedness of the Company. The terms of the Debentures are such that they qualify as
Tier I capital under the Federal Reserve Board&#146;s regulatory capital guidelines
applicable to bank holding companies. Interest on the Debentures is payable semi-annually
on March 8 and September 8 of each year, commencing September 8, 2000. The interest is
deferrable on a cumulative basis for up to five consecutive years following a suspension
of dividend payments on all other capital stock. No principal payments are due until
maturity on March 8, 2030.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
any March 8 or September 8 on or after March 8, 2010 and prior to maturity, the Debenture
are redeemable for cash at the option of the Company, on at least 30 but not more than 60
days notice, in whole or in part, at the redemption prices set forth in the table below,
plus accrued interest to the date of redemption:  </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">If Redeemed During<BR>12 Months Beginning<BR>March 8,  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Percentage of<BR>Principal<BR>Amount  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">If Redeemed During<BR>12 Months Beginning<BR>March 8,  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="1"></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Percentage of<BR>Principal<BR>Amount  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="1"></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="22%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2010  </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="22%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">105.44%  </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="22%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2016  </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="22%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">102.18%  </FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2011  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">104.89%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2017  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">101.63%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2012  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">104.35%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2018  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">101.09%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2013  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">103.81%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2019  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">100.54%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2014  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">103.26%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2020 and after  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">100.00%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2015  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">102.72%  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">  </FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon the occurrence of certain
special events, the Company will have the right to call the securities at par at any time
with the permission of the Federal Reserve. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October 30, 2002, the Company, in a private placement, issued an additional $3.0 million
(3,000 shares with a liquidation amount of $1,000 per security) of Capital Trust
Pass-through Securities (&#147;TruPS II&#148;) through a newly formed, wholly-owned
subsidiary, Guaranty (TX) Capital Trust II (the&#147;Trust II&#148;). The Trust II
invested the total proceeds from the sale of the TruPS II in Junior Subordinated
Deferrable Interest Debentures (the &#147;Debentures II&#148;) issued by the Company. The
Debentures II bear a fixed rate of interest of 7.94% for 10 years; thereafter, until the
maturity, the interest rate will float at 3.35% above the 3 month LIBOR. The net proceeds
from the sale of the Debentures II are being used to repurchase shares of the
Company&#146;s stock and provide for additional working capital to support growth.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
certain exceptions, the amount of the principal and any accrued and unpaid interest on the
Debentures II are subordinated in right of payment to the prior payment in full of all
senior indebtedness of the Company. The terms of the Debentures II are such that they
qualify as Tier 1 capital under the Federal Reserve Board&#146;s regulatory capital
guidelines applicable to bank holding companies. Interest on the Debenture II is payable
quarterly on January 30, April 30, July 30, and October 30 of each year at a fixed rate
per annum equal to 7.94% until October 2012 and a variable rate per annum, reset
quarterly, equal to LIBOR plus 3.35%, thereafter. The interest is deferrable on a
cumulative basis for up to five consecutive years following a suspension of dividend
payments on all other capital stock. No principal payments are due until maturity on
October 30, 2032.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
any interest payment date on or after October 30, 2012 and prior to maturity date, the
Debentures II are redeemable for cash at the option of the Company, on at least 30 but not
more than 60 days notice, in whole or in part, at a redemption price equal to 100% of the
principal amount to be redeemed, plus accrued interest to the date of redemption.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;37&nbsp;-  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 37; page: 37" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Left Italics-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Capital Resources and
Liquidity </I>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital
management consists of providing equity to support both current and future operations. The
Company is subject to capital adequacy requirements imposed by the Federal Reserve and the
Bank is subject to capital adequacy requirements imposed by the FDIC and the TDB. Both the
Federal Reserve and the FDIC have adopted risk-based capital requirements for assessing
bank holding company and bank capital adequacy. These standards define capital and
establish minimum capital requirements in relation to assets and off-balance sheet
exposure, adjusted for credit risk. The risk-based capital standards currently in effect
are designed to make regulatory capital requirements more sensitive to differences in risk
profiles among bank holding companies and banks, to account for off-balance sheet exposure
and to minimize disincentives for holding liquid assets. Assets and off-balance sheet
items are assigned to broad risk categories, each with appropriate relative risk weights.
The resulting capital ratios represent capital as a percentage of total risk-weighted
assets and off-balance sheet items.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
risk-based capital standards issued by the Federal Reserve require all bank holding
companies to have &#147;Tier 1 capital&#148; of at least 4.0% and &#147;total
risk-based&#148; capital (Tier 1 and Tier 2) of at least 8.0% of total risk-adjusted
assets. &#147;Tier 1 capital&#148; generally includes common shareholders&#146; equity and
qualifying perpetual preferred stock together with related surpluses and retained
earnings, less deductions for goodwill and various other intangibles. &#147;Tier 2
capital&#148; may consist of a limited amount of intermediate-term preferred stock, a
limited amount of term subordinated debt, certain hybrid capital instruments and other
debt securities, perpetual preferred stock not qualifying as Tier 1 capital, and a limited
amount of the general valuation allowance for loan losses. The sum of Tier 1 capital and
Tier 2 capital is &#147;total risk-based capital&#148;.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Federal Reserve has also adopted guidelines which supplement the risk-based capital
guidelines with a minimum ratio of Tier 1 capital to average total consolidated assets
(&#147;leverage ratio&#148;) of 3.0% for certain institutions with well diversified risk,
including no undue interest rate exposure; excellent asset quality; high liquidity; good
earnings; and that are generally considered to be strong banking organizations, rated
composite 1 under applicable federal guidelines, and that are not experiencing or
anticipating significant growth. Other banking organizations are required to maintain a
leverage ratio of at least 4.0% to 5.0%. These rules further provide that banking
organizations experiencing internal growth or making acquisitions will be expected to
maintain capital positions substantially above the minimum supervisory levels and
comparable to peer group averages, without significant reliance on intangible assets.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to FDICIA, each federal banking agency revised its risk-based capital standards to ensure
that those standards take adequate account of interest rate risk, concentration of credit
risk and the risks of nontraditional activities, as well as reflect the actual performance
and expected risk of loss on multifamily mortgages. The Bank is subject to capital
adequacy guidelines of the FDIC that are substantially similar to the Federal
Reserve&#146;s guidelines. Also pursuant to FDICIA, the FDIC has promulgated regulations
setting the levels at which an insured institution such as the Bank would be considered
&#147;well capitalized,&#148; &#147;adequately capitalized,&#148;
&#147;undercapitalized,&#148; &#147;significantly undercapitalized&#148; and
&#147;critically undercapitalized.&#148; The Bank is classified &#147;well
capitalized&#148; for purposes of the FDIC&#146;s prompt corrective action regulations.
<B>See &#147;Supervision and Regulation &#150; The Company&#148; and &#147;&#150; The Bank&#148;.</B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders&#146;
equity increased to $34.6 million at December 31, 2002, from $31.8 million at December 31,
2001, an increase of $2.8 million, or 8.8%. This increase was primarily the result of net
earnings of $4.4 million and the net change in unrealized gain on available-for-sale
securities of $490,000, offset by the payment of common stock dividends of $951,000 and
the purchase of treasury stock of $1.2 million.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;38&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides a comparison of the Company&#146;s and the Bank&#146;s leverage
and risk-weighted capital ratios as of December 31, 2002 to the minimum and
well-capitalized regulatory standards:  </FONT></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">  </FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Minimum Required  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">To Be Well Capitalized Under<BR>Prompt Corrective Action Provisions  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Actual Ratio at<BR>December 31, 2002<BR>  </FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="28%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>The Company</B>  </FONT>  </FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="14%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">  </FONT></TD>
     <TD WIDTH="9%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="13%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">  </FONT></TD>
     <TD WIDTH="14%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">  </FONT></TD>
     <TD WIDTH="8%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Leverage ratio  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%(1)  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">N/A  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.62  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Tier 1 risk-based capital ratio  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">N/A  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">12.06  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Risk-based capital ratio  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">N/A  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13.12  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD></TR>
<TR VALIGN=BOTTOM>
     <TD ALIGN=RIGHT>&nbsp;</TD></TR>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>The Bank</B>  </FONT>  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Leverage ratio  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%(2)  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.08  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Tier 1 risk-based capital ratio  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11.17  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;Risk-based capital ratio  </FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.00  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">12.21  </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">%  </FONT></TD></TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Federal Reserve may require the Company to maintain a leverage ratio above the required
minimum.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
FDIC may require the Bank to maintain a leverage ratio above the required minimum.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December 31, 2002, the Company&#146;s capital ratios exceeded the minimums required by
regulatory guidelines. The Company intends to maintain an optimal capital and leverage
mix. Liquidity involves the Company&#146;s ability to raise funds to support asset growth
or reduce assets to meet deposit withdrawals and other payment obligations, to maintain
reserve requirements and otherwise to operate the Company on an ongoing basis. The
Company&#146;s liquidity needs are met primarily by financing activities, which consisted
mainly of growth in core deposits, supplemented by investment securities and earnings
through operating activities. Access to purchased funds from correspondent banks is
available and has been utilized on occasion to take advantage of investment opportunities.
The cash and federal funds sold position, supplemented by amortizing investments along
with payments and maturities within the loan portfolio, have historically created an
adequate liquidity position.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s liquidity management objective is to meet maturing debt obligations, fund
loan commitments and deposit withdrawals, and manage operations on a cost effective basis.
Management believes that sufficient resources are available to meet the Company&#146;s
liquidity objective through its debt maturity structure, holdings of liquid assets, and
access to the capital markets through a variety of funding vehicles. Proper liquidity
management is crucial to ensure that the Company is able to take advantage of new business
opportunities as well as meet the demands of its customers.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank&#146;s traditional funding sources consist primarily of core deposits, established
federal funds and other borrowing lines with major banks, proceeds from matured
investments, contracts to repurchase investment securities and principal and interest
repayments on loans.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
is not aware of any events that are reasonably likely to have a material adverse effect on
the Company&#146;s liquidity, capital resources or operations. In addition, management is
not aware of any regulatory recommendations regarding liquidity, which if implemented,
would have a material adverse effect on the Company.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Industry Segments </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
principal business of the Company is overseeing the business of the Bank. The Company has
no significant assets other than its investment in the Bank, therefore, the banking
operation is the Company&#146;s only reportable segment.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;39&nbsp;-  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Recent Accounting
Pronouncements </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Statement
of Financial Accounting Standards (SFAS) No.&nbsp;145, &#147;Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.&#148;
</I>SFAS 145 clarifies and simplifies existing accounting pronouncements related to gains and
losses from debt extinguishments and certain lease modifications and eliminates certain
transitional accounting standards that are no longer necessary. This statement also makes
minor technical corrections to various other existing pronouncements. Certain provisions
of this statement will become effective for the Company on January&nbsp;1, 2003, while
other provisions became effective for transactions occurring and financial statements
issued after May&nbsp;15, 2002. Adoption of the provisions of this statement that were
effective after May&nbsp;15, 2002 did not have a significant impact on the Company&#146;s
financial statements. Furthermore, adoption of the remaining provisions of this statement
on January&nbsp;1, 2003 is not expected to have a significant impact on the Company&#146;s
financial statements.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>SFAS
No. 147, &#147;Acquisitions of Certain Financial Institutions, an Amendment of FASB
Statements No. 72 and 144 and FASB Interpretation No. 9.&#148; </I>SFAS&nbsp;147 removes
acquisitions of financial institutions from the scope of both SFAS&nbsp;72,
<I>&#147;Accounting for Certain Acquisitions of Banking or Thrift Institutions,&#148; </I>and
FASB Interpretation (FIN) No. 9, <I>&#147;Applying APB Opinions No. 16 and 17 When a Savings
and Loan Association or a Similar Institution Is Acquired in a Business Combination
Accounted for by the Purchase Method,&#148; </I>and requires such transactions be accounted
for in accordance with SFAS&nbsp;141, <I>&#147;Business Combinations,&#148; </I>and
SFAS&nbsp;142, <I>&#147;Goodwill and Other Intangible Assets.&#148; </I>In addition,
SFAS&nbsp;147 amends SFAS&nbsp;144, <I>&#147;Accounting for the Impairment or Disposal of
Long-Lived Assets,&#148; </I>to include in its scope long-term customer-relationship
intangible assets of financial institutions such as depositor- and borrower-relationship
intangible assets and credit cardholder intangible assets. The provisions of SFAS&nbsp;147
became effective on October 1, 2002. Adoption of this statement did not have a significant
impact on the Company&#146;s financial statements.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>SFAS
No. 148, &#147;Accounting for Stock-Based Compensation &#150; Transition and Disclosure,
an Amendment of FASB Statement No. 123.&#148; </I>Effective for financial statements issued
for fiscal years ending after December&nbsp;15, 2002, SFAS&nbsp;148 amends SFAS&nbsp;123,
<I>&#147;Accounting for Stock-Based Compensation,&#148; </I>to provide alternative methods of
transition for a voluntary change to the fair value method of accounting for stock-based
employee compensation. SFAS&nbsp;148 also amends the disclosure requirements of
SFAS&nbsp;123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company transitioned to the fair value
method of accounting for stock-based compensation during 2002 using the modified
prospective method prescribed by this standard.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Accounting Standards Board Interpretation (FIN) No. 45, <I>&#147;Guarantor&#146;s Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others &#150; an Interpretation of FASB Statements No. 5, 57 and 107 and Rescission of
FASB Interpretation No. 34.&#148; </I>FIN 45 elaborates on the disclosures to be made by
a guarantor in its interim and annual financial statements about its obligations under
certain guarantees that it has issued. &nbsp;It also clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. &nbsp;The initial recognition and
measurement provisions of FIN 45 are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. &nbsp;Implementation of these provisions of
FIN 45 is not expected to have a material impact on the Company&#146;s financial
statements. &nbsp;The disclosure requirements of FIN 45 are effective for financial
statements of interim or annual periods ending after December 15, 2002, and have been
adopted in the Company&#146;s financial statements for December 31, 2002.  </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A007A>Item 7A.</a> <I>Quantitative
and Qualitative Disclosures About Market Risk.</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Asset Liability and Funds Management Policy provides management with the
necessary guidelines for effective funds management, and the Company has established a
measurement system for monitoring its net interest rate sensitivity position. The Company
manages its sensitivity position within established guidelines.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;40&nbsp;-  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
rate risk is managed by the Asset Liability Committee (&#147;ALCO&#148;), which is
composed of senior officers of the Company, in accordance with policies approved by the
Company&#146;s Board of Directors. The ALCO formulates strategies based on appropriate
levels in interest rate risk. In determining the appropriate level of interest rate risk,
the ALCO considers the impact on earnings and capital based on the current outlook on
interest rates, potential changes in interest rates, regional economies, liquidity,
business strategies, and other factors. The ALCO meets regularly to review, among other
things, the sensitivity of assets and liabilities to interest rate changes, the book and
market values of assets and liabilities, unrealized gains and losses, purchase and sale
activity, commitments to originate loans, and the maturities of investments and
borrowings. Additionally, the ALCO reviews liquidity, cash flow flexibility, maturities of
deposits and consumer and commercial deposit activity. Management uses two methodologies
to manage interest rate risk: (i) an analysis of relationships between interest-earning
assets and interest-bearing liabilities; and (ii) interest rate shock simulation models.
The Company has traditionally managed its business to reduce its overall exposure to
changes in interest rates, however, under current policies of the Company&#146;s Board of
Directors, management has been given some latitude to increase the Company&#146;s interest
rate sensitivity position within certain limits if, in management&#146;s judgment, it will
enhance profitability. As a result, changes in market interest rates may have a greater
impact on the Company&#146;s financial performance in the future than they have had
historically.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
effectively measure and manage interest rate risk, the Company uses interest rate shock
simulation models to determine the impact on net interest income under various interest
rate scenarios, balance sheet trends and strategies. From these simulations, interest rate
risk is quantified and appropriate strategies are developed and implemented. Additionally,
duration and market value sensitivity measures are utilized when they provide added value
to the overall interest rate risk management process. The overall interest rate risk
position and strategies are reviewed by the Company&#146;s Board of Directors on an
ongoing basis. The Company manages its exposure to interest rates by structuring its
balance sheet in the ordinary course of business. The Company does not currently enter
into instruments such as leveraged derivatives, structured notes, interest rate swaps,
caps, floors, financial options, financial futures contracts or forward delivery contracts
for the purpose of reducing interest rate risk.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
impact on future net earnings based on interest sensitive assets and liabilities held at
December 31, 2002 using the interest rate shock simulation is as follows:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600">
<TR VALIGN=Bottom>
     <TH COLSPAN="2" WIDTH="14%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change in<BR>
Interest Rates </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Net<BR>
Earnings </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Change in<BR>
Net Earnings </FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="18%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>+ 300 </FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH="14%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$5,949 </FONT></TD>
        <TD WIDTH="8%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH="14%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$&nbsp;&nbsp;&nbsp;&nbsp;251 </FONT></TD>
        <TD WIDTH="11%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD WIDTH="29%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER" WIDTH="14%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;+200 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,196 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>498 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER" WIDTH="14%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;+100 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,239 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>541 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER" WIDTH="14%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Base </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,698 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER" WIDTH="14%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 100 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,051 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(647 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>) </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER" WIDTH="14%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 200 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,303 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1,395 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>) </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER" WIDTH="14%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 300 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,425 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2,273 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>) </FONT></TD></TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>





<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
interest rate sensitive asset or liability is one that, within a defined time period,
either matures or experiences an interest rate change in line with general market interest
rates. The management of interest rate risk is performed by analyzing the maturity and
repricing relationships between interest-earning assets and interest-bearing liabilities
at specific points in time (&#147;GAP&#148;) and by analyzing the effects of interest rate
changes on net interest income over specific periods of time by projecting the performance
of the mix of assets and liabilities in varied interest rate environments. Interest rate
sensitivity reflects the potential effect on net interest income of a movement in interest
rates. A company is considered to be asset sensitive, or having a positive GAP, when the
amount of its interest-earning assets maturing or repricing within a given period exceeds
the amount of its interest-bearing liabilities also maturing or repricing within that time
period. Conversely, a company is considered to be liability sensitive, or having a
negative GAP, when the amount of its interest-bearing liabilities maturing or repricing
within a given period exceeds the amount of its interest-earning assets also maturing or
repricing within that time period. During a period of rising interest rates, a negative
GAP would tend to affect net interest income adversely, while a positive GAP would tend to
result in an increase in net interest income. During a period of falling interest rates, a
negative GAP would tend to result in an increase in net interest income, while a positive
GAP would tend to affect net interest income adversely. However, it is management&#146;s
intent to achieve a proper balance so that incorrect rate forecasts should not have a
significant impact on earnings.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;41&nbsp;-  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 41; page: 41" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth an interest rate sensitivity analysis for the Company at
December 31, 2002:  </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=20><font face="Times New Roman, Times, Serif" size=1>Volumes Subject
      to Repricing Within </font>
      <hr width=100% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>0-30<br>
      days </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>31-180<br>
      days </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>181-365<br>
      days </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>1-3<br>
      years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>3-5<br>
      years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Greater
      than<br>
      5 years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Total
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=20><font face="Times New Roman, Times, Serif" size=1>(Dollars
      in thousands) </font></th>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Interest-earning
      assets: </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      4,058 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      23,211 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      30,993 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      42,537 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      200 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      5,993 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      106,992 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">74,244
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">71,944
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">56,467
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">124,771
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">30,893
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">7,296
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">365,615
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
      funds sold </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">1,530
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">1,530
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-earning assets </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">79,832
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">95,155
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">87,460
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">167,308
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">31,093
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">13,289
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">474,137
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Interest-bearing
      liabilities: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
      money market and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;savings
      deposits </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">115,113
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">115,113
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificates
      of deposit and </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
      time deposits </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">21,515
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">80,191
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">89,574
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">38,294
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">11,626
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">123
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">241,323
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowed
      funds </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">28
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">2,641
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">2,674
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">12,092
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">24,584
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">744
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">42,763
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">10,000
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">10,000
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest-bearing </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liabilities
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">136,656
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">82,832
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">92,248
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">50,386
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">36,210
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">10,867
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">409,199
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;Period
      GAP </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      (56,824 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      12,323 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      (4,788 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      116,922 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      (5,117 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      2,422 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      64,938 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;Cumulative
      GAP </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      (56,824 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      (44,501 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      (49,289 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      67,633 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      62,516 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">$
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">
      64,938 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Period
      GAP to total assets </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">(10.97
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">2.38
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">(0.92)
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">22.57
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">(0.99
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">0.47
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Cumulative
      GAP to total assets </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">(10.97
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">(8.59
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">(9.52
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">)%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">13.06
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">12.07
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">12.54
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Cumulative
      interest-earning assets </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
      cumulative interest-bearing </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liabilities
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">58.42
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">79.73
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">84.19
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">118.68
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">115.69
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="1">115.87
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="1">%
      </font></td>
  </tr>
</table>
<BR>


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<TD>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s one-year cumulative GAP position at December 31, 2002, was negative $49.3
million or 9.52% of assets. This is a one-day position that is continually changing and is
not indicative of the Company&#146;s position at any other time. While the GAP position is
a useful tool in measuring interest rate risk and contributes toward effective asset and
liability management, it is difficult to predict the effect of changing interest rates
solely on that measure, without accounting for alterations in the maturity or repricing
characteristics of the balance sheet that occur during changes in market interest rates.
For example, the GAP position reflects only the prepayment assumptions pertaining to the
current rate environment. Assets tend to prepay more rapidly during periods of declining
interest rates than during periods of rising interest rates. Because of this and other
risk factors not contemplated by the GAP position, an institution could have a matched GAP
position in the current rate environment and still have its net interest income exposed to
increased rate risk. To better qualify and account for the variables not incorporated into
GAP analysis, the Company utilizes an interest rate simulation model as discussed
previously. The Company maintains a Rate Committee and the ALCO that reviews the
Company&#146;s interest rate risk position on a weekly or monthly basis, respectively.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;42&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>



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<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A008>Item 8.</a> <I>Financial
Statements and Supplementary Data</I></B>  </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
financial statements, the reports thereon, the notes thereto and supplementary data
commence at page F-1 of this Annual Report on Form 10-K.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed
quarterly results of operations for the years ended December 31, 2002 and 2001 were as
follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>QUARTER ENDED
      2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>(unaudited)
      </font></th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1><br>
      Dec. 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Sept. 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>June 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>March 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>(Dollars in
      thousands, except per share data) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=62% align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Interest income </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,324
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,357
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,194
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,080
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Interest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,972 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,061 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,099 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,140 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,352 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,296 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,095 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,940 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>225 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>335 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>450 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>250 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income after provision for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,127 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,961 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,645 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,690 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,320 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,227 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,475 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,034 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,945 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,683 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,574 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,490 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      before taxes </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,502 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,505 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,546 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,234 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for income tax expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>292 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>413 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>453 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>252 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net earnings
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$1,210 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$1,092 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$1,093 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;982
      </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      per common share: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Basic
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.41
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.36
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.36
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.33
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Diluted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.40
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.36
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.36
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.33
      </font></td>
  </tr>
</table>
<BR>

<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>QUARTER ENDED
      2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>(unaudited)
      </font></th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1><br>
      Dec. 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Sept. 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>June 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>March 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=7><font face="Times New Roman, Times, Serif" size=1>(Dollars in
      thousands, except per share data) </font></th>
  </tr>
  <tr valign=Bottom>
    <td width=62% align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Interest income </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,230
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,522
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,493
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$7,616
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Interest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,566 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,024 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,273 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,500 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,664 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,498 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,220 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,116 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>704 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>341 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>185 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>155 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income after provision for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,960 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,157 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,035 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,961 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,604 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,247 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,092 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,258 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,701 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,346 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,207 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,265 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      before taxes </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,863 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,058 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>920 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>954 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for income tax expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>853 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>239 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>197 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>216 </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net earnings
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$1,010 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;819
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;723
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;738
      </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      per common share: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Basic
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.34
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.27
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.24
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.24
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Diluted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.34
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.27
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.24
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;0.24
      </font></td>
  </tr>
</table>
<BR>





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<TD>



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;43&nbsp;-  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A009>Item 9.</A> <I>Changes in
and Disagreements with Accountants on Accounting and Financial Disclosure</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PART III </B>  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A010>Item 10.</A> <I>Directors
and Executive Officers of the Registrant</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information under the captions &#147;Election of Directors,&#148; &#147;Continuing
Directors and Executive Officers&#148; and &#147;Section&nbsp;16(a) Beneficial Ownership
Reporting Compliance&#148; in the Company&#146;s definitive Proxy Statement relating to
its 2003 Annual Meeting of Shareholders (the "2003 Proxy Statement&#148;), which will
be filed within 120 days after December 31, 2002, is incorporated herein by reference in
response to this item.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A011>Item 11.</a> <I>Executive
Compensation</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information under the caption &#147;Executive Compensation and Other Matters&#148; in the
2003 Proxy Statement, which will be filed within 120 days after December 31, 2002, is
incorporated herein by reference in response to this item.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A012>Item 12.</a> <I>Security
Ownership of Certain Beneficial Owners and Management</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information under the caption &#147;Beneficial Ownership of Common Stock by Management of
the Company and Principal Shareholders&#148; in the 2003 Proxy Statement, which will be
filed within 120 days after December 31, 2002, is incorporated herein by reference in
response to this item.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A013>Item 13.</A> <I>Certain
Relationships and Related Transactions</I></B>  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information under the caption &#147;Interests of Management and Others in Certain
Transactions&#148; in the 2003 Proxy Statement, which will be filed within 120 days after
December 31, 2002, is incorporated herein by reference in response to this item.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A014>Item 14.</a> <I>Controls and
Procedures</I></B>  </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Evaluation of
Disclosure Controls and Procedures </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s chief executive officer and chief financial officer, after evaluating the
effectiveness of the Company&#146;s disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of a date (the
&#147;Evaluation Date&#148;) within 90&nbsp;days before the filing date of this annual
report on Form 10-K, have concluded that as of the Evaluation Date, the Company&#146;s
disclosure controls and procedures were adequate and designed to ensure that material
information relating to the Company and its consolidated subsidiaries would be made known
to them by others within those entities.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Changes in Internal
Controls </I>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
were no significant changes in the Company&#146;s internal controls or, to the knowledge
of the Company&#146;s chief executive officer and chief financial officer, in other
factors that could significantly affect the Company&#146;s disclosure controls and
procedures subsequent to the Evaluation Date.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;44&nbsp;-  </FONT></P>

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</TABLE>
<BR>

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<TD><BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PART IV </B>  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A Name=A015>Item 15.</A> <I>Exhibits,
Financial Statement Schedules, and Reports on Form 8-K</I></B>  </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Consolidated Financial
Statements and Schedules </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference
is made to the Financial Statements, the reports thereon, the notes thereto and
supplementary data commencing at page F-1 of this Annual Report on Form 10-K. Set forth
below is a list of such Financial Statements:  </FONT></P>

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</TD>
</TR>
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<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Independent
Auditor&#146;s Reports<BR><BR>Consolidated Balance Sheets as of December 31, 2002 and 2001<BR><BR>
Consolidated Statements of Earnings for the Years Ended December 31, 2002, 2001 and 2000<BR><BR>
Consolidated Statements of Changes in Shareholders&#146; Equity for the Years Ended
December 31, 2002, 2001 and 2000<BR><BR>Consolidated Statements of Cash Flows for the Years
Ended December 31, 2002, 2001 and 2000<BR><BR>Notes to Consolidated Financial Statements   </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Financial Statement
Schedules </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
supplemental schedules are omitted as inapplicable or because the required information is
included in the Consolidated Financial Statements or notes thereto.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Exhibits </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
exhibit marked with an asterisk is filed with this Annual Report on Form&nbsp;10-K.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

<table width=600 cellpadding=0 cellspacing=0 border=0>
  <tr valign="bottom" align="CENTER">
    <td width="15%"><font face="Times New Roman, Times, Serif" size="2"><b>Exhibit<BR>
      Number</b> </font> </td>
    <td width="85%"><font face="Times New Roman, Times, Serif" size="2"><b>Description</b>
      </font> </td>
  </tr>
  <tr valign="TOP" align="CENTER">
    <td width="15%">
      <hr noshade size="1">
    </td>
    <td width="85%">
      <hr noshade size="1" width="70">
    </td>
  </tr>
</table>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Agreement
and Plan of Reorganization dated as of April 23, 1999 between First American &nbsp;Financial
Corporation and Guaranty Bancshares, Inc. (incorporated herein by reference to Exhibit
2.1 to the Company&#146;s Registration Statement on Form S-4 (Registration No.
333-81881)).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>First
Amendment to the Agreement and Plan of Reorganization between First American &nbsp;Financial
Corporation and Guaranty Bancshares, Inc. (incorporated herein by reference to Exhibit
2.2 to the Company&#146;s Registration Statement on Form S-4 (Registration No.
333-81881)).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Second
Amendment to the Agreement and Plan of Reorganization between First American &nbsp;Financial
Corporation and Guaranty Bancshares, Inc. (incorporated herein by reference to Exhibit
2.3 to the Company&#146;s Registration Statement on Form S-4 (Registration No.
333-81881).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amended
Articles of Incorporation of the Company (incorporated herein by reference to Exhibit&nbsp;3.1
to the Company&#146;s Registration Statement on Form&nbsp;S-1 (Registration No.&nbsp;333-48959)
(the &#147;Registration Statement&#148;).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amended
and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to
the Registration Statement).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Specimen
form of certificate evidencing the Common Stock (incorporated herein by reference to
Exhibit&nbsp;4 to the Registration Statement).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;45&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amended
and Restated Declaration of Trust &#150; Guaranty (TX) Trust I &#150; Dated as of March
23, 2000 (incorporated herein by reference to Exhibit 10 to the Company&#146;s quarterly
report Form 10-Q for the quarter ended March 31, 2000 filed on May 15, 2000).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.2**   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Junior
Subordinated Indenture between Guaranty Bancshares, Inc. and The Bank of New York, as
trustee, dated as of October 30, 2002.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1+   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Guaranty
Bancshares, Inc. 1998 Stock Incentive Plan (incorporated herein by reference to Exhibit
10.1 to the Registration Statement).  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.2   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amended
and Restated Guaranty Bancshares, Inc. Employee Stock Ownership Plan with 401(k)
Provisions dated December 18, 2001 (incorporated herein by reference to Exhibit 10.2 to
the Company&#146;s Annual Report on Form 10-K for year ended December 31, 2001).   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21*   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subsidiaries
of Guaranty Bancshares, Inc.   </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23*   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consent
of McGladrey &amp; Pullen, LLP   </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>99.1*   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002   </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>99.2*   </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
*
Filed herewith  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
**
This exhibit is not filed herewith because it meets the exclusion set forth in Section
601(b)(4)(iii)(A) of Regulation S-K and the Company hereby agrees to furnish a copy
thereof to the Commission upon request.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
+
Management contract or compensatory plan or arrangement   </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Reports on Form 8-K </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
reports on Form 8-K were filed during the fourth quarter 2002.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;46&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 46; page: 46" -->

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<TR VALIGN=TOP>
<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES   </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, Guaranty Bancshares, Inc., has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Mount Pleasant and the State
of Texas on March 12, 2003.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  </FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2">GUARANTY BANCSHARES, INC.<BR><BR>
<BR>By: <B>/s/ ARTHUR B. SCHARLACH, JR.</B><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arthur B. Scharlach, Jr.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>President &amp; Chief Executive Officer</I>  </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report or
amendment thereto has been signed by the following persons in the indicated capacities on
March 12, 2003.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


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<table width=600 cellspacing=0 cellpadding=0 border=0>
  <tr valign=TOP>
    <td width=5%><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td width="45%" align="CENTER"><font face="Times New Roman, Times, Serif" size="2"><b>Signature</b>
      </font> </td>
    <td width="30%" align="CENTER"><font face="Times New Roman, Times, Serif" size="2"><b>Positions</b>
      </font> </td>
    <td width=20% align=CENTER><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=TOP>
    <td width=5%>&nbsp;</td>
    <td width="45%" align="CENTER">
      <hr noshade size="1" width="65">
    </td>
    <td width="30%" align="CENTER">
      <hr noshade size="1" width="65">
    </td>
    <td width=20% align=CENTER>&nbsp;</td>
  </tr>
</table>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ BILL G. JONES
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Bill G. Jones  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chairman of the Board  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ ARTHUR B. SCHARLACH, JR.
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Arthur B. Scharlach, Jr.  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>President and Chief Executive
Officer and Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ CLIFTON A. PAYNE
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Clifton A. Payne  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Senior Vice President, Secretary &amp; Chief
Financial Officer and
Director (principal
financial officer and
principal accounting
officer)  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ TYSON T. ABSTON
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Tyson T. Abston  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Senior Vice President and Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ JOHN A. CONROY
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
John A. Conroy  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ JONICE CRANE
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Jonice Crane  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ C. A. HINTON, SR.
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
C. A. Hinton, Sr.  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ WELDON MILLER
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Weldon Miller  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ BILL PRIEFERT
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Bill Priefert  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ GENE WATSON
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Gene Watson  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;  </FONT></TD>
<TD WIDTH="45%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>/s/ D. R. ZACHRY, JR.
</B><BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
D. R. Zachry, Jr.  </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director  </FONT></TD>
<TD WIDTH=10% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD></TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;47&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>


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<TD><BR>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Certifications </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Arthur B. Scharlach, Jr. certify
that:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I have reviewed this annual report on
Form 10-K of Guaranty Bancshares, Inc.;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based on my knowledge, this annual
report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this
annual report;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based on my knowledge, the financial
statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The registrant&#146;s other
certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>designed such disclosure controls and
procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>evaluated the effectiveness of the
registrant&#146;s disclosure controls and procedures as of a date within 90&nbsp;days
prior to the filing date of this annual report (the &#147;Evaluation Date&#148;); and  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>presented in this annual report our
conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The registrant&#146;s other
certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors
(or persons performing the equivalent function):  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all significant deficiencies in the
design or operation of internal controls which could adversely affect the
registrant&#146;s ability to record, process, summarize and report financial data and have
identified for the registrant&#146;s auditors any material weaknesses in internal
controls; and  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant&#146;s internal controls; and  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The registrant&#146;s other
certifying officers and I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material weaknesses.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>Dated:  March 12, 2003  </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>By: /s/ Arthur B. Scharlach, Jr.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Arthur B. Scharlach, Jr.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: President and Chief Executive Officer </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;48&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Clifton A. Payne certify that:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I have reviewed this annual report on
Form 10-K of Guaranty Bancshares, Inc.;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based on my knowledge, this annual
report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this
annual report;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based on my knowledge, the financial
statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The registrant&#146;s other
certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>designed such disclosure controls and
procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>evaluated the effectiveness of the
registrant&#146;s disclosure controls and procedures as of a date within 90&nbsp;days
prior to the filing date of this annual report (the &#147;Evaluation Date&#148;); and  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>presented in this annual report our
conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The registrant&#146;s other
certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors
(or persons performing the equivalent function):  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all significant deficiencies in the
design or operation of internal controls which could adversely affect the
registrant&#146;s ability to record, process, summarize and report financial data and have
identified for the registrant&#146;s auditors any material weaknesses in internal
controls; and  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant&#146;s internal controls; and  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The registrant&#146;s other
certifying officers and I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material weaknesses.  </FONT></P>
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>Dated:  March 12, 2003  </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>By: /s/ Clifton A. Payne<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Clifton A. Payne<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Senior Vice President, and Chief<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Officer </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Page Number Center Dashes" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>-&nbsp;49&nbsp;-  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>



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<TD>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>(This page
intentionally left blank)   </FONT></P>
<BR><BR>

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</TD>
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<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC.   </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consolidated Financial
Statements<BR>
December 31, 2002  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Table of Contents   </FONT></H1>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Page </FONT><HR SIZE=1 NOSHADE WIDTH="65%"></TH></TR>
<TR VALIGN="BOTTOM">
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="95%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Independent Auditors&#146; Reports </FONT></TD>
     <TD WIDTH="5%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">F-2&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Consolidated Balance Sheets </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">F-4&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Consolidated Statements of Earnings </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">F-5&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Consolidated Statements of Changes in Shareholders&#146; Equity </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">F-6&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Consolidated Statements of Cash Flows </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">F-7&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp; </FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Notes to Consolidated Financial Statements </FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">F-8&nbsp; </FONT></TD></TR>
</TABLE><BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR> F-1  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><A Name=A016>Independent Auditor&#146;s
Report</a></I>   </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of Directors
and Stockholders<BR>Guaranty Bancshares, Inc.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have audited the accompanying
consolidated balance sheets of Guaranty Bancshares, Inc. (the Company) as of December 31,
2002 and 2001 and the related consolidated statements of earnings, changes in
shareholders&#146; equity and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these consolidated financial statements based
on our audits. The financial statements for the year ended December 31, 2000 were audited
by Fisk &amp; Robinson, P .C. whose partners and employees merged with McG1adrey &amp;
Pullen, LLP on October 1, 2001 and whose report dated February 9, 2001, expressed an
unqualified opinion on those statements.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conducted our audit in accordance
with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated 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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Guaranty Bancshares, Inc. as of December 31, 2002 and
2001, and the results of its consolidated operations and its consolidated cash flows for
the years then ended, in conformity with accounting principles generally accepted in the
United States of America.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As discussed in Note 1, the Company
changed its method of accounting for stock-based compensation in connection with the
adoption of a new accounting standard.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>/s/ MCGLADREY &amp;
PULLEN, LLP  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dallas, Texas<BR>
January 10, 2003  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-2  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>The report that appears below is a
copy of the report issued by Fisk &amp; Robinson, P.C., the previous independent auditor
of Guaranty Bancshares, Inc. That firm has discontinued performing auditing and accounting
services.</I>  </FONT> </P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Independent Auditor&#146;s
Report</I>   </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of Directors
and Stockholders<BR>
Guaranty Bancshares, Inc.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have audited the accompanying
consolidated balance sheet of Guaranty Bancshares, Inc. (the Company) as of December 31,
2000 and the related consolidated statement of earnings, changes in shareholders&#146;
equity and cash flows for the year then ended. These consolidated financial statements are
the responsibility of the Company&#146;s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. The 1999 and 1998
consolidated financial statements of Guaranty Bancshares, Inc. were audited by other
auditors whose report dated January 26, 2000, expressed an unqualified opinion on those
statements.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conducted our audit in accordance
with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated 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 audit provides a reasonable
basis for our opinion.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Guaranty Bancshares, Inc. as of December 31, 2000, and
the results of their operations and their consolidated cash flows for the year then ended,
in conformity with accounting principles generally accepted in the United States of
America.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>/s/ FISK &amp; ROBINSON,
P .C.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dallas, Texas<BR>
February 9,
2001  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-3  </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC.<BR>
CONSOLIDATED BALANCE SHEETS<BR>
 December
31, 2002 and 2001<BR>
 (Dollars in thousands, except par value)  </FONT></H1>

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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=73% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Assets</b>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Cash and
      due from banks </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;18,244
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;15,410
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Federal funds
      sold </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,530 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,395 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Securities
      available-for-sale </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>106,992
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>81,715 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Loans held
      for sale </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,727 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,634 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Loans, net
      of allowance for loan losses of $3,692 and $3,346 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>356,196
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>326,275
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Premises
      and equipment, net </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,565 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,616 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Other real
      estate </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,111 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>562 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Accrued interest
      receivable </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,002 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,167 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Goodwill
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,338 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,338 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Other assets
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9,263 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>11,397 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;517,968
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;460,509
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Liabilities and Shareholders&#146; Equity</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Liabilities:
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Deposits:
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;68,514
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;63,726
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>356,436
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>319,553
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      deposits </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>424,950
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>383,279
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Federal
      Home Loan Bank advances </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>42,763 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>33,092 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Accrued
      interest and other liabilities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,611 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,311 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      liabilities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>483,324
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>428,682
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Shareholders&#146; equity: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Preferred
      stock, $5.00 par value, 15,000,000 shares authorized, </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;no
      shares issued </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Common
      stock, $1.00 par value, 50,000,000 shares authorized, </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;3,252,016
      and 3,250,016 shares issued </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,252 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,250 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Additional
      paid-in capital </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,725 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,659 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Retained
      earnings </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>21,149 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>17,723 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Treasury
      stock, 320,088 and 245,588 shares at cost </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,820 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,653 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Accumulated
      other comprehensive income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,338 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>848 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      shareholders&#146; equity </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34,644 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>31,827 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;517,968
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;460,509
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>




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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes
to consolidated financial statements.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-4  </FONT></P>

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<A Name=A018></a>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC.<BR>
CONSOLIDATED STATEMENTS OF EARNINGS<BR>
 Years Ended December 31,
2002, 2001 and 2000<BR>
 (Dollars in thousands, except per share amounts)  </FONT></H1>


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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=62% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Interest
      income</b> </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Loans,
      including fees </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$24,119
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$24,591
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;23,218
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Securities
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Taxable
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,470 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,280 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,218 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Nontaxable
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>159 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>413 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>371 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Federal
      funds sold and interest-bearing deposits </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>207 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>577 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>210 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>28,955 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>29,861 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>29,017 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Interest
      expense</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Deposits
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9,837 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>14,836 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>15,330 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;FHLB
      advances and federal funds purchased </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,639 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>755 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>812 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>796 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>772 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>600 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      interest expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,272 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>16,363 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>16,742 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b><br>
      Net interest income</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>16,683 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,498 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,275 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Provision
      for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,260 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,385 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>595 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Net
      interest income after provision for loan losses</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>15,423 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,113 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>11,680 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Noninterest income</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Service
      charges </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,957 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,678 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,396 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Net
      realized gain (loss) on securities transactions </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>380 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>416 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(34 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Other
      operating income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,719 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,107 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,361 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      noninterest income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,056 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,201 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,723 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Noninterest expense</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Employee
      compensation and benefits </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>8,711 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,592 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,791 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Occupancy
      expenses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,992 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,901 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,758 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Other
      operating expenses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,989 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,026 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,591 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      noninterest expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>14,692 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,519 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,140 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings
      before provision for income taxes </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,787 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,795 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,263 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Provision for income taxes</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Current
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,065 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,191 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>423 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Deferred
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>345 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>314 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>332 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      provision for income taxes </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,410 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,505 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>755 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Net
      Earnings</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;4,377
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;3,290
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;2,508
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Basic
      earnings per common share</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;1.46
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;1.09
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.80
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Diluted
      earnings per common share</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;1.45
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;1.09
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.80
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>





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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes
to consolidated financial statements.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-5  </FONT></P>

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</TD>
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<BR>

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<A Name=A019></A>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC.<BR>
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS&#146; EQUITY<BR>
 Years Ended December 31,
2002, 2001, and 2000<BR>
 (Dollars in thousands, except per share amounts)  </FONT></H1>


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<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Preferred<br>
      Stock </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Common<br>
      Stock </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Additional<br>
      Capital </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Retained<br>
      Earnings </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Accumulated<br>
      Other<br>
      Comprehensive<br>
      Income </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Treasury<br>
      Stock </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Total<br>
      Shareholders&#146;<br>
      Equity<br>
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1"><br>
      Balance at January 1, 2000 </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 3,250
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 12,659
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 13,535
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> (774)
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> (174)
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 28,496
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="100%"><font face="Times New Roman, Times, serif" size="1">Comprehensive
      Income: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Net
      earnings </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">2,508
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">2,508
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Change
      in net unrealized gain (loss) on </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;securities
      available for sale, net of </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reclassification
      and tax effects </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">1,236
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">1,236
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      comprehensive income </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">3,744
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Purchase
      of treasury stock </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,046
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,046
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Dividends:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Common
      - $0.25 per share </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(769 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(769 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
      at December 31, 2000 </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">3,250
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">12,659
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">15,274
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">462 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,220
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">29,425
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Comprehensive
      Income: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Net
      earnings </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">3,290
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">3,290
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Change
      in net unrealized gain (loss) on </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;securities
      available for sale, net of </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reclassification
      and tax effects </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">386 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">386 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      comprehensive income </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">3,676
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Purchase
      of treasury stock </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(433 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(433 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Dividends:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Common
      - $0.28 per share </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(841 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(841 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
      at December 31, 2001 </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">3,250
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">12,659
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">17,723
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">848 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,653
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">31,827
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Comprehensive
      Income: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Net
      earnings </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">4,377
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">4,377
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Change
      in net unrealized gain (loss) on </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;securities
      available for sale, net of </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reclassification
      and tax effects </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">490 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">490 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=3><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      comprehensive income </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">4,867
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Stock-based
      compensation expense </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">49 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">49 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Exercise
      of stock options </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">2 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">17 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">19 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Purchase
      of treasury stock </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,167
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,167
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Dividends:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;Common
      - $0.32 per share </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(951 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(951 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
      at December 31, 2002 </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> &#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 3,252
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 12,725
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 21,149
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 1,338
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> (3,820
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">) </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="1">$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 34,644
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="1"></font></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes
to consolidated financial statements.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-6  </FONT></P>

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<A Name=A020></A>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES,
INC.<BR>
 CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
 Years Ended December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=69% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      flows from operating activities</b> </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      earnings </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 4,377 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,290 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,508 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments
      to reconcile net earnings to net cash from operating </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;activities:
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
      and amortization </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,129 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,134 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>854 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      securities amortization (accretion) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>809 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(67 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(42 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      realized (gain) loss on securities transactions </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(380 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(416 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain
      on loans held for sale </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(272 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(98 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision
      for loan losses </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,260 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,385 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>595 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      increase in loans held for sale </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,821 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,364 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(172 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-down
      of other real estate and repossessed assets </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>37 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      loss (gain) on sale of premises, equipment and other real estate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>64 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(212 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(59 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss
      on impairment of investment in Aircraft Finance Trust </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,500 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      change in accrued interest receivable and other assets </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,100 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,480 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,768 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      change in accrued interest and other liabilities </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>47 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,174 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>695 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
      compensation expense </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>49 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash provided by operating activities </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,399 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,846 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>645 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      flows from investing activities</b> </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
      available for sale: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(95,863
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(49,321
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(16,416
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds
      from sales and principal repayments </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>70,962 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>50,294 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>16,491 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases
      of premises and equipment </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(940 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,183 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,745 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds
      from sale of premises, equipment and other real estate </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,338 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,541 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>152 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      increase in loans </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(35,170
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(45,008
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(32,729
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      change in federal funds sold </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,865 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>600 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,855 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash used in investing activities </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(54,808
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(43,077
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(39,102
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      flows from financing activities</b> </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      change in deposits </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>41,671 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>25,014 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>29,628 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds
      from FHLB advances </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>20,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>30,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment
      of FHLB advances </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(10,329
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(9,311 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(296 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds
      from long-term debt </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
      of treasury stock </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,167 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(433 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,046 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise
      of stock options </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>19 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
      dividends paid </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(951 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(841 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(769 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash provided by financing activities </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>52,243 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>44,429 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>35,517 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Net
      change in cash and cash equivalents</b> </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,834 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,198 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,940 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      and cash equivalents at beginning of year</b> </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>15,410 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,212 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>13,152 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      and cash equivalents at end of year</b> </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 18,244
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 15,410
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 10,212
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>



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<TD>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See accompanying notes
to consolidated financial statements.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-7  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

<A Name=A021></A>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following is a summary of the significant accounting policies followed in the preparation
of the consolidated financial statements. The policies conform to accounting principles
generally accepted in the United States of America and to general practices within the
banking industry.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Principles of
Consolidation </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
consolidated financial statements include the accounts of Guaranty Bancshares, Inc and its
wholly-owned subsidiaries Guaranty (TX) Capital Trust I, Guaranty (TX) Capital Trust II,
and Guaranty Financial Corp., Inc. which wholly owns Guaranty Bond Bank, formally Guaranty
Bank (Bank) and one non-bank subsidiary, Guaranty Company. Guaranty Bond Bank has two
wholly-owned non-bank subsidiaries, Guaranty Leasing Company, and GB Com, Inc. All
entities combined are collectively referred to as the &#147;Company.&#148; All significant
intercompany balances and transactions have been eliminated in consolidation.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Nature of Operations </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company operates ten locations in Northeast Texas and one location in Fort Stockton,
Texas. The Company&#146;s main sources of income are derived from granting loans primarily
in Northeast Texas and investing in securities issued by the U.S. Treasury, U.S.
government agencies and state and political subdivisions. A variety of financial products
and services are provided to individual and corporate customers. The primary deposit
products are checking accounts, money market accounts, and certificates of deposit. The
primary lending products are real estate, commercial, and consumer loans. Although the
Company has a diversified loan portfolio, a substantial portion of its debtors&#146;
abilities to honor contracts is dependent on the economy of the area.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Use of Estimates </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
prepare financial statements in conformity with accounting principles generally accepted
in the United States of America, management makes estimates and assumptions based on
available information. These estimates and assumptions affect the amounts reported in the
financial statements and the disclosures provided, and actual future results could differ.
The allowance for loan losses, fair values of financial instruments, the status of
contingencies, and the value of the Company&#146;s recorded investment in the Aircraft
Finance Trust (&#147;AFT&#148;) are particularly subject to change.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Cash Equivalents and
Supplemental Cash Flow Information </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
and cash equivalents include cash, due from banks and interest-bearing deposits with other
banks, which have initial maturities under 90 days. Net cash flows are reported for loan
and deposit transactions, and short-term borrowings with initial maturities under 90 days.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2002, 2001 and 2000, cash paid for interest totaled $12,505, $15,974, and $15,929 and cash
paid for income taxes totaled $1,320, $104, and $250. Significant noncash transactions
included transfers from loans to other real estate and repossessed assets of $3,988,
$2,157, and $903 in 2002, 2001 and 2000.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Securities </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
are classified as held to maturity and carried at amortized cost when management has the
positive intent and ability to hold them to maturity. Securities are classified as
available for sale when they might be sold before maturity. Securities available for sale
are carried at fair value, with unrealized holding gains and losses reported in other
comprehensive income. Management determines the appropriate classification of securities
at the time of purchase. Restricted securities such as stock in the Independent Bankers
Financial Corporation, the Federal Reserve Bank, the Federal Home Loan Bank and
Independent Bankers Capital Fund, L.P. are carried at cost.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-8  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> (Continued)  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
income includes amortization of purchase premiums and discounts. Gains and losses on sales
are based on the amortized cost of the security sold. Securities are written down to fair
value when a decline in fair value is not temporary.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Loans Held For Sale </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
residential mortgage loans are originated for sale in the secondary mortgage-loan market.
These loans are carried at the lower of cost or estimated fair value in the aggregate. Net
unrealized losses are recognized through a valuation allowance by charges to income. To
mitigate the interest rate risk, fixed commitments may be obtained at the time loans are
originated or identified for sale.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Loans </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
are reported at the principal amount outstanding, net of charge-offs, unearned discounts,
purchase discounts and an allowance for loan losses. Unearned discounts on installment
loans are recognized using a method that approximates a level yield over the term of the
loans. Interest on other loans is reported on the level yield interest method and includes
amortization of net deferred loan fees and costs over the loan term.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
income is not reported when full loan repayment is in doubt, typically when the loan is
impaired or payments are past due 90 days or more. Payments received on such loans are
reported as principal reductions.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Allowance for Loan
Losses </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
allowance for loan losses is a reserve established through a provision for loan losses
charged to expense, which represents management&#146;s best estimate of probable losses
that have been incurred within the existing portfolio of loans. The allowance, in the
judgment of management, is necessary to reserve for estimated loan losses and risks
inherent in the loan portfolio. While management utilizes its best judgment and
information available, the ultimate adequacy of the allowance is dependent upon a variety
of factors, including the performance of the bank&#146;s loan portfolio, the economy,
changes in real estate values and interest rates and the view of the regulatory
authorities toward loan classifications.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
estimates the allowance balance required, in part, by review of the loan portfolio to
evaluate potential problem loans. Potential problem loans are classified and separately
monitored by management. Loans classified as &#147;special mention&#148; are those that
contain a weakness that, if left unattended, could develop into a problem affecting the
ultimate collectibility of the loan. Loans classified as &#147;substandard&#148; are those
loans with clear and defined weaknesses such as highly leveraged positions, unfavorable
financial ratios, uncertain repayment sources or poor financial condition, which may
jeopardize recoverability of the loan. Loans classified as &#147;doubtful&#148; are those
loans that have characteristics similar to substandard loans, but also have an increased
risk that a loss may occur or at least a portion of the loan may require a charge-off if
liquidated at present. Although loans classified as substandard do not duplicate loans
classified as doubtful, both substandard and doubtful loans may include some loans that
are past due at least 90 days, are on nonaccrual status or have been restructured. Loans
classified as &#147;loss&#148; are those loans that are in the process of being charged
off.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan
impairment is reported when full payment under the loan terms is not expected. Loans are
evaluated for impairment when payments are delayed, typically 90 days or more, or when
analysis of a borrower&#146;s operating results and financial condition indicates the
borrower&#146;s underlying cash flows are not adequate to meet debt service requirements
and it is probable that not all principal and interest amounts will be collected according
to the original terms of the loan. Impairment is evaluated in total for smaller-balance
loans of similar nature such as residential mortgage and consumer loans and on an
individual loan basis for other loans. If a loan is impaired, a portion of the allowance
is allocated so that the loan is reported, net, at the present value of estimated future
cash flows using the loan&#146;s existing rate or at the fair value of collateral if
repayment is expected solely from the collateral. Impaired loans, or portions thereof, are
charged off when deemed uncollectible.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-9  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
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<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> (Continued)  </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to allocations made for specific classified loans, general reserve allocations
are made after consideration of such factors as past loan loss experience, general
prevailing economic conditions, the nature, composition and volume of the loan portfolio,
and other qualitative factors based on management&#146;s judgment.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
portions of allowance may be allocated for specific credits, the entire allowance is
available for any credit that, in management&#146;s judgment, should be charged-off.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Premises and Equipment </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premises
and equipment are stated at cost, less accumulated depreciation. Depreciation is provided
on the straight-line method over the estimated useful lives of the related assets.
Maintenance, repairs and minor improvements are charged to noninterest expense as
incurred.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Other Real Estate </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets
acquired through, or in lieu of, foreclosure are initially recorded at fair value when
acquired, establishing a new cost basis. If fair value declines, a valuation allowance is
recorded through expense. Costs after acquisition are expensed.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Goodwill </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
January&nbsp;1, 2002, the Company stopped amortizing goodwill and adopted a new policy for
measuring goodwill for impairment. No impairment of goodwill was recognized in connection
with the adoption of this new policy. Under the new policy, goodwill is assigned to
reporting units. The Company currently operates as a single reporting unit and all of the
reported goodwill is associated with the entire Company. Goodwill is then tested for
impairment at least annually, or on an interim basis if an event occurs or circumstances
change that would more-likely-than-not reduce the fair value of the reporting unit below
its carrying value. Goodwill is tested for impairment using a two-step approach. The first
step is to compare the fair value of the reporting unit to its carrying amount, including
goodwill. If the fair value of the reporting unit is greater than its carrying amount,
goodwill is not considered impaired and the second step is not required. If the fair value
of the reporting unit is less than its carrying amount, the second step of the impairment
test measures the amount of the impairment loss, if any. The second step of the impairment
test is to compare the implied fair value of goodwill to its carrying amount. If the
carrying amount of goodwill exceeds its implied fair value, an impairment loss is
recognized equal to that excess. The implied fair value of goodwill is calculated in the
same manner that goodwill is calculated in a business combination, whereby the fair value
of the reporting unit is allocated to all of the assets and liabilities of that unit
(including any unrecognized intangible assets) as if the reporting unit had been acquired
in a business combination and the fair value of the reporting unit was the purchase price.
The excess &#147;purchase price&#148; over the amounts assigned to assets and liabilities
would be the implied fair value of goodwill.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-10  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 60; page: 60" -->

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> (Continued)  </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to January 1, 2002, goodwill had been amortized over a 20 year period. The following table
presents reported net income and earnings per common share for the years ended December
31, 2001 and 2000 adjusted to exclude goodwill amortization expense.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Reported
      net income </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,290
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,508
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Add back
      amortization of goodwill </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">150 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">175 </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Adjusted
      net income </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,440
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,683
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Reported
      earnings per share - basic and diluted </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.09
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.80
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Add back
      goodwill amortization </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.05 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.06 </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">Adjusted
      earnings per share - basic and diluted </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
    <td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.86
      </font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT colspan="2">
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Intangible Assets and
Other Long-Lived Assets </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible
assets with definite useful lives are amortized on a straight-line basis over their
estimated useful life. Intangible assets, premises and equipment and other long-lived
assets are tested for impairment whenever events or changes in circumstances indicate the
carrying amount of the assets may not be recoverable from future undiscounted cash flows.
If impaired, the assets are recorded at fair value.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Income Taxes </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
tax expense is the total of the current year income tax due or refundable and the change
in deferred tax assets and liabilities. Deferred tax assets and liabilities are the
expected future tax amounts for the temporary differences between carrying amounts and tax
bases of assets and liabilities, computed using enacted tax rates. A valuation allowance,
if needed, reduces deferred tax assets to the expected amount to be realized.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Stock Compensation </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with a new accounting standard, SFAS No. 148, <I>&#147;Accounting for Stock-Based
Compensation &#150; Transition and Disclosure, an Amendment of FASB Statement No.
123,&#148; </I>the Company transitioned to the fair value method of accounting for stock-based
compensation during 2002 using the modified prospective method prescribed by the standard.
Under the modified prospective method, the Company began recognizing stock-based employee
compensation expense from the beginning of 2002 as if the fair value method had been used
to account for all employee awards granted, modified, or settled in fiscal years beginning
after December 15, 1994. The fair value of options granted is determined using the
Black-Scholes option valuation model. Stock-based employee compensation expense totaled
approximately $49 in 2002. Under the modified prospective method, no stock-based employee
compensation expense is recognized for prior periods.  </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to 2002, stock-based compensation expense under stock option plans was reported only if
options were granted below market price at grant date in accordance with the intrinsic
value method of Accounting Principles Board (APB) Opinion No.&nbsp;25.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-11  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<!-- MARKER PAGE="sheet: 61; page: 61" -->

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> (Continued)   </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Fair Values of
Financial Instruments </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair
values of financial instruments are estimated using relevant market information and other
assumptions. Fair value estimates involve uncertainties and matters of significant
judgment regarding interest rates, credit risk, prepayments, and other factors, especially
in the absence of broad markets for particular items. Changes in assumptions or in market
conditions could significantly affect the estimates. The fair value estimates of existing
on and off balance sheet financial instruments do not include the value of anticipated
future business or the value of assets and liabilities not considered financial
instruments.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Loss Contingencies </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss
contingencies, including claims and legal actions arising in the ordinary course of
business, are recorded as liabilities when the likelihood of loss is probable and an
amount or range of loss can be reasonably estimated.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Dividend Restriction </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Banking
regulations require the maintenance of certain capital and net income levels that may
limit the amount of dividends that may be paid. Regulatory capital requirements are more
fully disclosed in a separate note.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Restrictions on Cash </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company was required to have $1,907 and $705 of cash on hand or on deposit with the
Federal Reserve Bank to meet regulatory reserve and clearing requirements at December 31,
2002 and 2001, respectively. Deposits with the Federal Reserve Bank do not earn interest.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Earnings Per Common
Share </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic
earnings per share (&#147;EPS&#148;) is based on net earnings divided by the
weighted-average number of shares outstanding during the period. Diluted EPS includes the
dilutive effect of stock options granted using the treasury stock method.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings
per common share is computed by dividing net earnings available to common shareholders by
the weighted-average number of common shares outstanding for the year. The earnings
available to common shareholders and the weighted-average number of common shares
outstanding for basic and diluted earnings per share computations were as follows:  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-12  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD><BR>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands, except share amounts)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> (Continued)   </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=56% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Weighted-average
      shares outstanding &#150; Basic </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,991,453
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,016,406
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,125,656
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Effect of
      stock options </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>21,253 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,915 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,864 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Weighted-average
      shares outstanding &#150; Diluted </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,012,706
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,027,321
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,132,520
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>



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<TR VALIGN=TOP>
<TD>




<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Comprehensive Income </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
income is reported for all periods. Comprehensive income includes both net income and
other comprehensive income. Other comprehensive income components and related taxes were
as follows.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=63% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Unrealized
      gain on available-for-sale securities </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;arising
      during the period </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;1,122
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;1,001
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;1,839
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Reclassification
      adjustment for amounts realized on </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;securities
      sales included in net earnings </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(380 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(416 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      unrealized gain </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>742 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>585 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,873 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax
      effect </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(252 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(199 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(637 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      other comprehensive income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;490
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;386
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;1,236
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<TR VALIGN=TOP>
<TD>



<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Recent Accounting
Pronouncements </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Statement
of Financial Accounting Standards (SFAS) No.&nbsp;145, &#147;Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.&#148;
</I>SFAS 145 clarifies and simplifies existing accounting pronouncements related to gains and
losses from debt extinguishments and certain lease modifications and eliminates certain
transitional accounting standards that are no longer necessary. This statement also makes
minor technical corrections to various other existing pronouncements. Certain provisions
of this statement will become effective for the Company on January&nbsp;1, 2003, while
other provisions became effective for transactions occurring and financial statements
issued after May&nbsp;15, 2002. Adoption of the provisions of this statement that were
effective after May&nbsp;15, 2002 did not have a significant impact on the Company&#146;s
financial statements. Furthermore, adoption of the remaining provisions of this statement
on January&nbsp;1, 2003 is not expected to have a significant impact on the Company&#146;s
financial statements.  </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>SFAS
No. 147, &#147;Acquisitions of Certain Financial Institutions, an Amendment of FASB
Statements No. 72 and 144 and FASB Interpretation No. 9.&#148; </I>SFAS&nbsp;147 removes
acquisitions of financial institutions from the scope of both SFAS&nbsp;72,
<I>&#147;Accounting for Certain Acquisitions of Banking or Thrift Institutions,&#148; </I>and
FASB Interpretation (FIN) No. 9, <I>&#147;Applying APB Opinions No. 16 and 17 When a Savings
and Loan Association or a Similar Institution Is Acquired in a Business Combination
Accounted for by the Purchase Method,&#148; </I>and requires such transactions be accounted
for in accordance with SFAS&nbsp;141, <I>&#147;Business Combinations,&#148; </I>and
SFAS&nbsp;142, <I>&#147;Goodwill and Other Intangible Assets.&#148; </I>In addition,
SFAS&nbsp;147 amends SFAS&nbsp;144, <I>&#147;Accounting for the Impairment or Disposal of
Long-Lived Assets,&#148; </I>to include in its scope long-term customer-relationship
intangible assets of financial institutions such as depositor- and borrower-relationship
intangible assets and credit cardholder intangible assets. The provisions of SFAS&nbsp;147
became effective on October 1, 2002. Adoption of this statement did not have a significant
impact on financial statements.  </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-13  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 &#151; SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</B> (Continued)   </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>SFAS
No. 148, &#147;Accounting for Stock-Based Compensation &#150; Transition and Disclosure,
an Amendment of FASB Statement No. 123.&#148; </I>Effective for financial statements issued
for fiscal years ending after December&nbsp;15, 2002, SFAS&nbsp;148 amends SFAS&nbsp;123,
<I>&#147;Accounting for Stock-Based Compensation,&#148; </I>to provide alternative methods of
transition for a voluntary change to the fair value method of accounting for stock-based
employee compensation. SFAS&nbsp;148 also amends the disclosure requirements of
SFAS&nbsp;123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. As discussed above, the Company
transitioned to the fair value method of accounting for stock-based compensation during
2002 using the modified prospective method prescribed by this standard.  </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Accounting Standards Board Interpretation (FIN) No. 45, &#147;Guarantor&#146;s Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others &#150; an Interpretation of FASB Statements No. 5, 57 and 107 and Rescission of
FASB Interpretation No. 34.&#148; </I>FIN 45 elaborates on the disclosures to be made by
a guarantor in its interim and annual financial statements about its obligations under
certain guarantees that it has issued. It also clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The initial recognition and
measurement provisions of FIN 45 are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. Implementation of these provisions of
FIN 45 is not expected to have a material impact on the Company&#146;s financial
statements. The disclosure requirements of FIN 45 are effective for financial
statements of interim or annual periods ending after December 15, 2002, and have been
adopted in the Company&#146;s financial statements for December 31, 2002.  </FONT> </P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Reclassifications </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some
items in prior financial statements have been reclassified to conform with the current
presentation.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-14  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 2 &#151; SECURITIES
AVAILABLE-FOR-SALE </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Year-end securities available for sale were as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Amortized<br>
      Cost </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Gross<br>
      Unrealized<br>
      Gains </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Gross<br>
      Unrealized<br>
      Losses </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Estimated<br>
      Fair<br>
      Value </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=54% align=LEFT><font face="Times New Roman, Times, Serif" size=2>December
      31, 2002: </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.
      S. government agency securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;13,728
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;399
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;14,127
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed
      securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>61,808 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,341 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>63,148 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collateralized
      mortgage obligations </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>25,039 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>281 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>40 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>25,280 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity
      securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,165 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,165 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obligations
      of state and political subdivisions </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,225 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>47 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,272 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$104,965
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$2,068 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$106,992
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      &nbsp;December 31, 2001: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.
      S. government agency securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;4,208
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;286
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;4,494
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed
      securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>33,600 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>374 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>22 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>33,952 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collateralized
      mortgage obligations </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>33,920 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>494 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>24 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34,390 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity
      securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,112 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,112 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obligations
      of state and political subdivisions </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,590 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>177 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,767 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;80,430
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$1,331 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;46
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;81,715
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<TR VALIGN=TOP>
<TD>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed
securities and collateralized mortgage obligations are backed by pools of mortgages that
are insured or guaranteed by the Federal Home Loan Mortgage Corporation (FHLMC), the
Federal National Mortgage Association (FNMA) or the Government National Mortgage
Corporation (GNMA). Equity securities include stock holdings in Independent Bankers
Financial Corporation, the Federal Reserve Bank, the Federal Home Loan Bank, and
Independent Bankers Capital Fund, L.P.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
year-end 2002, there were no holdings of securities of any one issuer, other than the U.S.
government and its agencies, in an amount greater than 10% of shareholders&#146; equity.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
with a fair value of approximately $57,682 and $50,141 at December 31, 2002, and 2001,
respectively, were pledged to secure public deposits and for other purposes as required or
permitted by law.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-15  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 2 &#151; SECURITIES
AVAILABLE-FOR-SALE</B> (Continued)  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
amortized cost and estimated fair value of securities at year-end 2002, by contractual
maturity, are shown below. Equity securities are shown separately since they do not have a
maturity date. Expected maturities may differ from contractual maturities because
borrowers and/or issuers may have the right to call or prepay their obligation with or
without call or prepayment penalties.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amortized<br>
      Cost </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Estimated<br>
      Fair<br>
      Value </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=62% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Due
      within one year </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=12% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      245 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=12% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      246 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Due after
      one year through five years </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>19,785 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>20,309 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Due after
      five years through ten years </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>28,513 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>29,098 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Due after
      ten years </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>53,257 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>54,174 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Equity securities
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,165 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,165 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 104,965
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 106,992
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<TD>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
of securities available for sale were as follows:  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=56% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Proceeds
      from the sale of securities </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      31,973 </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      50,294 </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      5,314 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Gross realized
      gains </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>427 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>441 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Gross realized
      losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>47 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>25 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>35 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
</table>
<BR>

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<TD>




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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-16  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 3 &#151; LOANS
AND ALLOWANCE FOR LOAN LOSSES </B>  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th width="57">&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width=326 align=LEFT><font face="Times New Roman, Times, Serif" size=2>Commercial
      </font></td>
    <td width=11 align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=50 align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=13 align=left><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=61 align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      58,661 </font></td>
    <td width=57 align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=13 align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=69 align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      66,642 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>Agriculture
      </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>9,989
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>8,589
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>Real
      estate </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Construction
      </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>14,017
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>9,492
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;1-4
      family residential </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>139,156
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>124,480
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Farmland
      </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>14,765
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>9,794
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Commercial
      </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>81,649
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>68,165
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Multi-family
      residential </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>9,289
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>9,333
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>Consumer
      </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>32,429
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>33,204
      </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=left>
      <hr NOSHADE size=1>
    </td>
    <td width="57"></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      gross loans </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>359,955
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>329,699
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>Less:
      </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Unearned
      discounts </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>67
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>78
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Allowance
      for loan losses </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>3,692
      </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>3,346
      </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=left>
      <hr NOSHADE size=1>
    </td>
    <td width="57"></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT width="326"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      net loans </font></td>
    <td align=LEFT width="11"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="50"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=left width="13"><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT width="61"><font face="Times New Roman, Times, Serif" size=2>
      356,196 </font></td>
    <td align=LEFT width="57"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13"><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td align=RIGHT width="69"><font face="Times New Roman, Times, Serif" size=2>
      326,275 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td width="57"></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Loans to executive officers, directors, principal shareholders and their affiliates were as follows:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH></TR>
<TR VALIGN=Bottom>

    <TD WIDTH=275 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Beginning
      balance </FONT></TD>

    <TD WIDTH=16 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD WIDTH=95 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD WIDTH=16 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$
      </FONT></TD>
    <TD WIDTH=58 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
      14,674 </FONT></TD>

    <TD WIDTH=57 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD WIDTH=12 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$
      </FONT></TD>
    <TD WIDTH=61 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
      12,499 </FONT></TD>

    <TD WIDTH=10 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
  </TR>
<TR VALIGN=Bottom>

    <TD ALIGN=LEFT width="275"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>New
      loans </FONT></TD>
    <TD ALIGN=LEFT width="16"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=LEFT width="95"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD ALIGN=left width="16"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=RIGHT width="58"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,881
      </FONT></TD>

    <TD ALIGN=LEFT width="57"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD ALIGN=left width="12"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=RIGHT width="61"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14,806
      </FONT></TD>

    <TD ALIGN=LEFT width="10"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
  </TR>
<TR VALIGN=Bottom>

    <TD ALIGN=LEFT width="275"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Repayments
      </FONT></TD>
    <TD ALIGN=LEFT width="16"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=LEFT width="95"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD ALIGN=left width="16"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=RIGHT width="58"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7,114
      </FONT></TD>

    <TD ALIGN=LEFT width="57"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)
      </FONT></TD>

    <TD ALIGN=left width="12"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=RIGHT width="61"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(12,631
      </FONT></TD>

    <TD ALIGN=LEFT width="10"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)
      </FONT></TD>
  </TR>
<TR>
     <TD COLSPAN=3></TD>

    <TD COLSPAN=2 ALIGN=left>
<HR NOSHADE SIZE=1></TD>
    <TD width="57"></TD>

    <TD COLSPAN=2 ALIGN=left>
<HR NOSHADE SIZE=1></TD>
    <TD width="10"></TD>
  </TR>
<TR VALIGN=Bottom>

    <TD ALIGN=LEFT width="275"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ending
      balance </FONT></TD>
    <TD ALIGN=LEFT width="16"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD ALIGN=LEFT width="95"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD ALIGN=left width="16"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$
      </FONT></TD>
    <TD ALIGN=RIGHT width="58"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
      13,441 </FONT></TD>

    <TD ALIGN=LEFT width="57"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>

    <TD ALIGN=left width="12"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$
      </FONT></TD>
    <TD ALIGN=RIGHT width="61"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
      14,674 </FONT></TD>

    <TD ALIGN=LEFT width="10"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
  </TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD width="57"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE SIZE=2></TD>
    <TD width="10"></TD>
  </TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Changes in the allowance for loan losses were as follows:  </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=57% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Beginning
      balance </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      3,346 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      2,578 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      2,491 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,260 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,385 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>595 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Charge-offs
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,072 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(835 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(678 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Recoveries
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>158 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>218 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>170 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Ending balance
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,692 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,346 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,578 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>



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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impaired
loans were as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
  <TR VALIGN=Bottom>
    <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1> </FONT></TH>
    <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2002 </FONT>
      <HR WIDTH=95% SIZE=1 NOSHADE>
    </TH>
    <TH>&nbsp;</TH>
    <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>2001 </FONT>
      <hr width=95% size=1 NOSHADE>
    </TH>
    <TH>&nbsp;</TH>
  </TR>
  <TR VALIGN=Bottom>
    <TD WIDTH=68% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Year-end
      loans with allowance allocated </FONT></TD>
    <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$
      </FONT></TD>
    <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
      2,810 </FONT></TD>
    <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
    <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$
      </FONT></TD>
    <TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
      3,737 </FONT></TD>
    <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;
      </FONT></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Year-end
      loans with no allowance allocated </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN=3></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>
      <HR NOSHADE SIZE=1>
    </TD>
    <TD></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>
      <HR NOSHADE SIZE=1>
    </TD>
    <TD></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Impaired
      loans </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,810 </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,737 </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN=3></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>
      <HR NOSHADE SIZE=2>
    </TD>
    <TD></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>
      <HR NOSHADE SIZE=2>
    </TD>
    <TD></TD>
  </TR>
  <TR VALIGN=Bottom>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amount of
      the allowance allocated </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 913 </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$ </FONT></TD>
    <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 508 </FONT></TD>
    <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
  </TR>
  <TR>
    <TD COLSPAN=3></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>
      <HR NOSHADE SIZE=2>
    </TD>
    <TD></TD>
    <TD COLSPAN=2 ALIGN=RIGHT>
      <HR NOSHADE SIZE=2>
    </TD>
    <TD></TD>
  </TR>
</TABLE>
<BR>



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<TR VALIGN=TOP>
<TD>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-17  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 65; page: 65" -->

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<TR VALIGN=TOP>
<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 3 &#151; LOANS AND
ALLOWANCE FOR LOAN LOSSES</B> (Continued)  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
average balance of impaired loans was $3,265 in 2002, $2,973 in 2001 and $1,121 in 2000.
No interest income was recognized on these impaired loans during 2002, 2001 or 2000. There
were no commitments
to lend additional funds to borrowers whose loans were classified as impaired.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents information regarding nonperforming assets at the dates
indicated:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>December 31,
      </font></th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=76% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Nonaccrual
      loans </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      2,810 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      3,737 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Accruing
      loans past due 90 days or more </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>404 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,912 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Other real
      estate </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,111 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>562 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      nonperforming assets </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 4,325 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 6,211 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Nonperforming
      assets to total loans and other real estate </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1.18 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>% </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1.87 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>% </font></td>
  </tr>
</table>
<BR>


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<TR VALIGN=TOP>
<TD>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
interest on nonaccrual loans had been accrued, such income would have been approximately
$106 in 2002, $251 in 2001 and $113 in 2000.   </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-18  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 66; page: 66" -->

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<TR VALIGN=TOP>
<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 4 &#151; PREMISES
AND EQUIPMENT </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year-end
premises and equipment were as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=62% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Land
      </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=12% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      2,604 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=12% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      2,369 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Building
      and improvements </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,736 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,482 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Furniture,
      fixtures and equipment </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,687 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,255 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Automobiles
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>110 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>175 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>20,137 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>19,281 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Less accumulated
      depreciation </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,572 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,665 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 13,565
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 13,616
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
expense totaled $992 in 2002, $984 in 2001 and $846 in 2000.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 5 &#151; INTEREST-BEARING
DEPOSITS </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year-end
 interest-bearing deposits were as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=66% align=LEFT><font face="Times New Roman, Times, Serif" size=2>NOW
      accounts </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      39,368 </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      33,816 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Savings and
      money market accounts </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>75,745 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>72,217 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Certificates
      of deposit less than $100,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>136,483
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>124,931
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Certificates
      of deposit of $100,000 or more </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>104,840
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>88,589 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 356,436
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 319,553
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year-end
scheduled maturities of certificates of deposit were as follows:  </FONT></P>

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<BR>
<table cellpadding="0" cellspacing="0" width="600">
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size="2">
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" colspan="2">
      <div align="center"><font face="Times New Roman, Times, Serif" size=1><b>2002</b>
        </font> </div>
      <hr width=95% size=1 NOSHADE>
    </td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td width="24%" align="CENTER"><font face="Times New Roman, Times, Serif" size=2>2003
      </font></td>
    <td width="1%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="26%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="1%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>$</font></td>
    <td width="9%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>
      &nbsp;191,478 </font></td>
    <td width="39%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size=2>2004
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="9%"><font face="Times New Roman, Times, Serif" size=2>
      32,391</font></td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size=2>2005
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="9%"><font face="Times New Roman, Times, Serif" size=2>
      5,858</font></td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size=2>2006
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="9%"><font face="Times New Roman, Times, Serif" size=2>
      2,927</font></td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size=2>2007
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="9%"><font face="Times New Roman, Times, Serif" size=2>
      8,669</font></td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size=2>Thereafter
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="9%"><font face="Times New Roman, Times, Serif" size=2>&#151;</font></td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size="2">
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" colspan="2">
      <hr NOSHADE size=1>
    </td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" width="1%"><font face="Times New Roman, Times, Serif" size=2>$</font></td>
    <td align="RIGHT" width="9%"><font face="Times New Roman, Times, Serif" size=2>
      &nbsp; 241,323 </font></td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="CENTER" width="24%"><font face="Times New Roman, Times, Serif" size="2">
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="26%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="RIGHT" colspan="2">
      <hr NOSHADE size=2>
    </td>
    <td align="LEFT" width="39%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
</table>
<BR>

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<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits
of executive officers, directors and significant shareholders totaled $10,954 and $11,034
at December 31, 2002 and 2001, respectively.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-19  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 67; page: 67" -->

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<TR VALIGN=TOP>
<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 6 &#151; FEDERAL
HOME LOAN BANK ADVANCES </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
Home Loan Bank (FHLB) advances were as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th align="RIGHT" width="49%"><font face="Times New Roman, Times, Serif" size=1>
      </font></th>
    <th align="RIGHT" width="8%">&nbsp;</th>
    <th nowrap width="5%"><font face="Times New Roman, Times, Serif" size=1>Current<br>
      Weighted<br>
      Average<br>
      Rate </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th width="1%">&nbsp;</th>
    <th width="8%">&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th width="8%">&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" width="49%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="8%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="5%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="8%">&nbsp;</td>
    <td align=RIGHT width="1%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="5%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT width="8%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="2%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=RIGHT width="13%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="left" colspan="3"><font face="Times New Roman, Times, Serif" size=2>Fixed-rate
      advances, with monthly interest payments, principal due in: </font></td>
    <td align=LEFT nowrap width="1%">&nbsp;</td>
    <td align=LEFT nowrap width="8%">&nbsp;</td>
    <td align=left nowrap width="1%">&nbsp;</td>
    <td align=RIGHT nowrap width="5%">&nbsp;</td>
    <td align=LEFT nowrap width="8%">&nbsp;</td>
    <td align=left nowrap width="2%">&nbsp;</td>
    <td align=RIGHT nowrap width="13%">&nbsp;</td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2"><br>
      2002 </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">3.95
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">
      &#151; </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=left nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">10,000
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2003
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">2.92
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5,000
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2004
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">3.82
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5,000
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2005
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">3.09
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">6,000
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2006
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">4.64
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">20,000
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">20,000
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2007
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">3.97
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">4,000
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">Thereafter
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">&#151;
      </font></td>
  </tr>
  <tr>
    <td colspan="2" align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=3 nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=left nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">
      40,000 </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">
      30,000 </font></td>
  </tr>
  <tr>
    <td colspan="2" align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=3 nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="left" colspan="5"><font face="Times New Roman, Times, Serif" size=2>Fixed-rate
      advances, with monthly principal and interest payments, principal due in:
      </font></td>
    <td align=left nowrap width="1%">&nbsp;</td>
    <td align=RIGHT nowrap width="5%">&nbsp;</td>
    <td align=LEFT nowrap width="8%">&nbsp;</td>
    <td align=left nowrap width="2%">&nbsp;</td>
    <td align=RIGHT nowrap width="13%">&nbsp;</td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2"><br>
      2002 </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.23
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=left nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">
      &#151; </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">
      329 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2003
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.23
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">346
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">346
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2004
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.23
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">364
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">364
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2005
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.23
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">742
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">742
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2006
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.19
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">292
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">292
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">2007
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.19
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">307
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">307
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">Thereafter
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">5.19
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">712
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">712
      </font></td>
  </tr>
  <tr>
    <td colspan="2" align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=3 nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=RIGHT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">2,763
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">3,092
      </font></td>
  </tr>
  <tr>
    <td colspan="2" align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=3 nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
    <td nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align="RIGHT" nowrap width="49%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td align=left nowrap width="1%"><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap width="5%"><font face="Times New Roman, Times, serif" size="2">
      42,763 </font></td>
    <td align=LEFT nowrap width="8%"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=left nowrap width="2%"><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align=RIGHT nowrap width="13%"><font face="Times New Roman, Times, serif" size="2">
      33,092 </font></td>
  </tr>
  <tr>
    <td colspan="2" align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=3 nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
    <td nowrap width="8%"><font face="Times New Roman, Times, serif" size="2"></font></td>
    <td colspan=2 align=RIGHT nowrap>
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
maximum month-end balance of FHLB advances outstanding was $52,875 and $33,145 in 2002 and
2001. Average balances of borrowings outstanding during 2002 and 2001 were $40,892 and
$12,392. As a member of the FHLB system, the Bank has the ability to obtain borrowings up
to a maximum total of $169,920 subject to the level of qualified, pledgable first lien
mortgage loans and FHLB stock owned. The advances are collateralized by a blanket pledge
of the Bank&#146;s first lien mortgage loan portfolio and FHLB stock. The weighted-average
interest rates on these borrowings were 4.02% and 4.88% at December 31, 2002 and December
31, 2001.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-20  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 68; page: 68" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 7 &#151; LONG
TERM DEBT </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
March 2000, the Company, in a private placement, issued $7,000 (seven thousand shares with
a liquidation amount of one thousand dollars per security) of 10.875% fixed rate trust
preferred securities through a newly formed, wholly-owned subsidiary, Guaranty (TX)
Capital Trust I (the &#147;Trust&#148;). The Trust invested the total proceeds from the
sale of the TruPS in 10.875% fixed rate Junior Subordinated Deferrable Interest Debentures
(the &#147;Debentures&#148;) issued by the Company. The net proceeds from the sale of the
Debentures were used to buy back shares of the Company&#146;s stock, provide a $1,502
additional capital contribution to Guaranty Bond Bank and provide for additional working
capital to support growth.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
certain exceptions, the amount of the principal and any accrued and unpaid interest on the
Debentures are subordinated in right of payment to the prior payment in full of all senior
indebtedness of the Company. The terms of the Debentures are such that they qualify as
Tier I capital under the Federal Reserve Board&#146;s regulatory capital guidelines
applicable to bank holding companies, subject to limitations. Interest on the Debentures
is payable semi-annually on March 8 and September 8 of each year, commencing September 8,
2000. The interest is deferrable on a cumulative basis for up to five consecutive years
following a suspension of dividend payments on all other capital stock. No principal
payments are due until maturity on March 8, 2030.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
any March 8 or September 8 on or after March 8, 2010 and prior to maturity, the Debentures
are redeemable for cash at the option of the Company, on at least 30 but not more than 60
days notice, in whole or in part, at the redemption prices set forth in the table below,
plus accrued interest to the date of redemption.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>

<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1>If Redeemed During<br>
      12 Months Beginning<br>
      March 8, </font>
      <hr width=85% size=1 NOSHADE>
    </th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percentage of<br>
      Principal<br>
      Amount </font>
      <hr width=85% size=1 color=BLACK NOSHADE>
    </th>
    <th><font face="Times New Roman, Times, Serif" size=1>If Redeemed During<br>
      12 Months Beginning<br>
      March 8, </font>
      <hr width=85% size=1 color=BLACK NOSHADE>
    </th>
    <th><font face="Times New Roman, Times, Serif" size=1>Percentage of<br>
      Principal<br>
      Amount </font>
      <hr width=85% size=1 color=BLACK NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width=25% align=CENTER><font face="Times New Roman, Times, Serif" size=2>2010
      </font></td>
    <td width=26% align=CENTER><font face="Times New Roman, Times, Serif" size=2>105.438%
      </font></td>
    <td width=25% align=CENTER><font face="Times New Roman, Times, Serif" size=2>2016
      </font></td>
    <td width=22% align=CENTER><font face="Times New Roman, Times, Serif" size=2>102.175%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2011 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>104.894%
      </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2017 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>101.631%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2012 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>104.350%
      </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2018 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>101.088%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2013 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>103.806%
      </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2019 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>100.544%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2014 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>103.263%
      </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2020 and
      after </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>100.000%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>2015 </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>102.719%
      </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
</table>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the occurrence of certain special events, the Company will have the right to call the
securities at par at any time with the permission of the Federal Reserve.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
October 2002, the Company, in a private placement, issued $3,000 (three thousand shares
with a liquidation amount of one thousand dollars per security) of trust preferred
securities through a newly formed, wholly-owned subsidiary, Guaranty (TX) Capital Trust II
(&#147;Trust II&#148;). The trust preferred securities will pay quarterly distributions on
January 30, April 30, July 30 and October 30 of each year at a fixed rate per annum equal
to 7.94% until October 2012 and a variable rate per annum, reset quarterly, equal to LIBOR
plus 3.35%, thereafter. Trust II invested the proceeds from the sale of the trust
preferred securities in Junior Subordinated Deferrable Interest Debentures II (the
&#147;Debentures II&#148;) issued by the Company. The net proceeds from the sale of the
Debentures II are being used to buy back shares of the Company&#146;s stock and provide
for additional working capital to support growth.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-21  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 69; page: 69" -->

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 7 &#151; LONG
TERM DEBT</B> (Continued)   </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
certain exceptions, the amount of the principal and any accrued and unpaid interest on the
Debentures II are subordinated in right of payment to the prior payment in full of all
senior indebtedness of the Company. The terms of the Debentures II are such that they
qualify as Tier I capital under the Federal Reserve Board&#146;s regulatory capital
guidelines applicable to bank holding companies. Interest on the Debentures II is payable
quarterly at the same rate as dividends are paid on the trust preferred securities. The
interest is deferrable at a cumulative basis for up to five consecutive years following a
suspension of dividend payments on all other capital stock. No principal payments are due
until maturity on October 30, 2032.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
any interest payment date on or after October 30, 2012 and prior to maturity date, the
Debentures II are redeemable for cash at the option of the Company, on at least 30 but not
more than 60 days notice, in whole or in part, at a redemption price equal to 100% of the
principal amount to be redeemed, plus accrued interest to the date of redemption.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the occurrence of certain special events, the Company will have the right to call the
securities at a redemption price equal to 100% of the principal amount to be redeemed plus
accrued interest to the date of redemption.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
redemption is subject to the Company obtaining the prior approval of the Federal Reserve.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-22  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End Rule" FSL="Project" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 70; page: 70" -->

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands, except per share amounts)  </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 8 &#151; PREFERRED
AND COMMON STOCK </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
summary of issued and outstanding shares of stock is as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Issued and<br>
      Outstanding<br>
      Preferred Stock </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Common<br>
      Stock<br>
      Issued </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Treasury<br>
      Stock<br>
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
    <th nowrap><font face="Times New Roman, Times, Serif" size=1>Common<br>
      Stock<br>
      Outstanding </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th nowrap>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=41% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance
      at January 1, 2000 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,250,016
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(17,600
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>)
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,232,416
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
      of treasury stock </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(188,383
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(188,383
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance at
      December 31, 2000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,250,016
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(205,983
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,044,033
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
      of treasury stock </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(39,605
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(39,605
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance at
      December 31, 2001 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,250,016
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(245,588
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,004,428
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
      of treasury stock </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(74,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(74,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise
      of stock options </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance at
      December 31, 2002 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,252,016
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(320,088
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,931,928
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
stock, if outstanding, pays dividends semi-annually. Preferred stock is not cumulative or
participating, has no voting rights and is not convertible. Preferred stock has
liquidation preferences over common stock of the Company. Dividends on common stock of the
Company may not be declared or paid unless dividends for the same period on preferred
stock have been paid or declared.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 9 &#151; STOCK
OPTIONS </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
1998, the Company&#146;s Board of Directors, with the approval of shareholders, adopted
the 1998 Stock Incentive Plan. Under the provisions of this plan, 1,000,000 shares have
been reserved for issuance. The plan provides for the grant of nonqualified stock options
to certain officers of the Company at exercise prices equal to the fair market value per
share of the Company&#146;s common stock on the date of the grant. Options granted under
the plan generally expire after eight years and generally vest and become exercisable in
five equal annual installments commencing on the first anniversary of the date of grant
and annually thereafter.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-23  </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands, except per share amounts)  </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 9 &#151; STOCK OPTIONS</B>
 (Continued)  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
summary of activity in the 1998 Stock Incentive Plan follows:  </FONT></P>


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<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>Options Outstanding
      </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Shares<br>
      Available for<br>
      Future Grants </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Number<br>
      of Shares </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2 nowrap><font face="Times New Roman, Times, Serif" size=1>Weighted-Average<br>
      Exercise Price </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width=49% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance,
      January 1, 2000 </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=11% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      &#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Shares
      reserved for future grants </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,000,000
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Granted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(89,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>89,500 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9.30 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Exercised
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Canceled
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance,
      December 31, 2000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>910,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>89,500 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Granted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Exercised
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Canceled
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance,
      December 31, 2001 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>910,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>89,500 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9.30 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Granted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(20,000
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>20,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12.50 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Exercised
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9.30 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Canceled
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9.30 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Balance,
      December 31, 2002 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>893,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>104,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 9.91 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2></td>
  </tr>
</table>
<BR>

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<TR VALIGN=TOP>
<TD>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
information regarding options outstanding and options exercisable as of December 31, 2002
is as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding="0" cellspacing="0" width="600">
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Exercise<br>
      Price </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Shares<br>
      of<br>
      Options<br>
      Outstanding </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Shares<br>
      of<br>
      Option<br>
      Exercisable </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Weighted-<br>
      Average<br>
      Remaining<br>
      Contractual<br>
      Life in Years </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width="10%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="1%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="4%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="1%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width="14%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>
      9.30 </font></td>
    <td width="5%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="1%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="14%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>84,500
      </font></td>
    <td width="5%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="1%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="14%" align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>33,800
      </font></td>
    <td width="5%" align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="1%" align="CENTER"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width="14%" align="CENTER"><font face="Times New Roman, Times, Serif" size=2>5.3
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>12.50
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>20,000
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>&#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="CENTER"><font face="Times New Roman, Times, Serif" size=2>7.2 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>Total
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>104,500
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, Serif" size=2>33,800
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=CENTER><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td align="CENTER"><font face="Times New Roman, Times, Serif" size=2>5.6 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2></td>
  </tr>
</table>
<BR>

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<TR VALIGN=TOP>
<TD>




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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-24  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands, except per share amounts)  </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 9 &#151; STOCK OPTIONS</B> (Continued)  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with a new accounting standard, SFAS No. 148, <I>&#147;Accounting for Stock-Based
Compensation &#150; Transition and Disclosure, an Amendment of FASB Statement No.
123,&#148; </I>the Company transitioned to the fair value method of accounting for stock-based
compensation during 2002 using the modified prospective method prescribed by the standard.
Under the modified prospective method, the Company began recognizing stock-based employee
compensation expense from the beginning of 2002 as if the fair value method had been used
to account for all employee awards granted, modified, or settled in fiscal years beginning
after December 15, 1994. The fair value of options granted is determined using the
Black-Scholes option valuation model. Stock-based employee compensation expense totaled
approximately $49 in 2002. Under the modified prospective method, no stock-based employee
compensation expense is recognized for prior periods.  </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted-average fair value of options granted in 2002 and 2000 was $4.09 and $2.03 per
option. Fair values of options are estimated at the date of grant using the Black-Scholes
option pricing model with the following weighted-average assumptions for 2002 and 2000:
risk-free interest rates of 5.00% and 6.42%; market price volatility factors of 0.29% and
0.08%; a weighted-average expected life of the options of 8 years; and dividend yields of
2.24% and 2.59%.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to 2002, stock-based compensation expense under stock option plans was reported only if
options were granted below market price at grant date in accordance with the intrinsic
value method of Accounting Principles Board (APB) Opinion No.&nbsp;25.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following pro forma information presents net earnings and earnings per common share for
2001 and 2000 had the fair value method been used to measure compensation cost for
stock-based compensation plans. For purposes of these pro forma disclosures, the estimated
fair value of the options is amortized to expense over the related vesting periods.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=74% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net
      earnings, as reported </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      3,290 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      2,508 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Stock-based
      employee compensation expense, net of tax </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(23 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(17 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Pro
      forma net earnings </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,267 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,491 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Earnings
      per share - basic and diluted: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;As
      reported </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1.09 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.80 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Pro
      forma </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1.08 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0.80 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
</table>
<BR>

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<TD>



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-25  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands, except per share amounts)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 10 &#151; EMPLOYEE
BENEFITS </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company maintains an Employee Stock Ownership Plan containing Section 401(k) provisions
covering substantially all employees. The plan provides for a matching contribution of up
to 4% of qualified compensation. Total contributions accrued or paid for 2002, 2001 and
2000 totaled $462, $390 and $280.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company maintains a non-qualified, non-contributory &#147;Supplemental Retirement
Plan.&#148; The plan covers an executive officer to provide benefits equal to amounts
payable under the Company&#146;s retirement plan and certain social security benefits to
aggregate a predetermined percentage of the final five-year average salary. The plan is
non-funded. Amounts accrued or paid for 2002, 2001 and 2000 totaled $11, $13 and $15.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company established a non-qualified, non-contributory, &#147;Salary Continuation
Plan&#148; in 1998. The plan covers an executive officer to provide benefits equal to an
amount which represents 75% of projected compensation at retirement as adjusted for
amounts payable under the Company&#146;s retirement plan and certain social security
benefits. This plan is non-funded. Amounts accrued for 2002, 2001 and 2000 totaled $116,
$111 and $100.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
1998 the Company established a non-qualified, non-contributory, &#147;Executive Incentive
Retirement Plan.&#148; The plan covers a selected group of key personnel to provide
benefits equal to amounts computed under an &#147;award criteria&#148; at various targeted
salary levels as adjusted for annual earnings performance of the Company. Amounts accrued
for 2002, 2001 and 2000 totaled $50, $35 and $29.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has a bonus plan that provides guidelines whereby key employees can earn bonus
compensation based on the profitability of the Company. The bonus amounts are determined
based on the Company&#146;s achievement of certain percentages of return on equity
targets. This plan is approved and adopted annually by the Board of Directors of the
Company at the first board meeting of the year. The bonus pool under this plan for 2002,
2001 and 2000 totaled $874, $679 and $444.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-26  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 11 &#151; INCOME
TAXES </B>  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
sources of year-end gross deferred income tax assets and liabilities were as follows:   </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=71% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Deferred
      tax assets: </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Allowance
      for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 995 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 878 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Deferred
      Compensation </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>240 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>197 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Other
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>15 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>56 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      deferred tax asset </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,250 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,131 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Deferred
      tax liabilities: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security
      basis </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> (90 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> (69 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
      gain on available-for-sale securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(689 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(437 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,160 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,039 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leasing
      transactions </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(902 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(576 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
      loan costs, net </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(399 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(403 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(47 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(47 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      deferred tax liability </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> (3,287
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> (2,571
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      deferred tax liability </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,037 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,440 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
reconciliation of the Company&#146;s effective income tax rate and the statutory federal
income tax rate for each reported period is as follows:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=65% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Statutory
      federal income tax rate </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=5% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34.00
      </font></td>
    <td width=6% align=LEFT><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=5% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34.00
      </font></td>
    <td width=6% align=LEFT><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=5% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34.00
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Tax exempt
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2.76 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3.68 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(4.58 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Recognition
      of benefit on lease and AFT transactions </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(7.40 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1.18 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(13.82</font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Other, net
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0.53 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2.25 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7.54 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Effective
      income tax rate </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>24.37 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>% </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>31.39 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>% </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>23.14 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>% </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guaranty
Leasing Company is a substantial partner in various complex equipment leasing transactions
primarily originated in 1992, 1994 and 1995 involving leveraged leases. In November 1998,
Guaranty Leasing was informed by the Internal Revenue Service (the &#147;Service&#148;)
that it has taken the position that certain losses taken by one of the three Partnerships
during 1994, 1995 and 1996 of $302, $410, and $447, respectively, would be disallowed. In
October 2001, Guaranty Leasing was informed by the Service that it has taken the position
that certain losses taken by that Partnership during 1997 of $487, would also be
disallowed. In September 2002, the Company received from the Service a Notice of Final
Partnership Administrative Adjustment (&#147;FPAA&#148;) disallowing these deductions.
Based upon the advice of counsel, the Company believes that it has correctly reported
these transactions for tax purposes and that it has obtained appropriate legal, accounting
and appraisal opinions and authority to support its positions. However as of December 31,
2002, the Company has recorded and expensed the tax affect of the disallowed deductions.
On February 3, 2003, the Company filed a petition to begin the process to litigate the
matter in the United States District Court for the Eastern District of Texas. Any final
determination with respect to the Partnership will be binding on the Company. Should the
Service pursue an investigation of and ultimately disallow the related tax deductions
taken during the remaining years of the above partnership as well as the other two
partnerships, the Company will be required to recognize an additional maximum tax
liability of approximately $3,900 plus possible penalty and interest. The Company is
actively contesting the position of the Service in connection with this matter, and will
take appropriate steps necessary to protect its legal position.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-27  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 12 &#151; NONINTEREST
INCOME AND NONINTEREST EXPENSE </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
noninterest income consisted of the following:  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=8><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width=55% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Fee
      income </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      863 </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      668 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      663 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Fiduciary
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>163 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>136 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>109 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      from key-man life insurance </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>236 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>204 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>234 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Gain on sale
      of loans </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>272 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>98 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Gain on sale
      of assets </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>97 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>36 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>38 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Gain on sale
      of other real estate </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>176 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>21 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Income from
      lease transactions </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>19 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Income from
      investment in AFT </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>140 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>145 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Impairment
      of investment in AFT </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,500 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Gain on settlement
      of litigation </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Other noninterest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>76 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>149 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>132 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,719 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,107 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,361 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
</table>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disregarding
the Company&#146;s one time gain on settlement of litigation of $3,000 and impairment
charge from its AFT investment of $1,500 in 2001, the Company&#146;s recurring noninterest
income was $1,719, $1,607, and $1,361 in 2002, 2001, and 2000.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain
on the settlement of litigation represents the amount received in January 2002 in
connection with the November 2001 settlement and concurrent transfer of the Company&#146;s
rights to certain intangible assets. Estimated costs related to compliance with the
provisions of the settlement agreement have been accrued and recorded in the accompanying
financial statements.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2000, Guaranty Leasing, acquired a 2.5% ownership interest in AFT for approximately
$2,800. The AFT ownership interest is classified as an Other Asset on the Company&#146;s
balance sheet. As of December 31, 2002 and 2001, the book value of the AFT ownership
interest was $1,600.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the fourth quarter of 2001, on belief that the Company&#146;s investment in AFT was
impaired by declines in air travel and reduced demand for commercial aircraft, an
impairment charge of $1,500 was recorded and the carrying amount of the investment was
reduced to $1,577. During the third quarter of 2001, AFT recorded an impairment charge of
$18,158 related to two airplanes. In addition, management received indications the
appraised value of AFT&#146;s fleet of airplanes had declined approximately 9% from their
value the past year. Based on these factors, the limited marketability of the investment,
the uncertainty surrounding the air transport industry and general economic conditions,
management believed that the value of its investment in AFT was permanently impaired.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-28  </FONT></P>

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</TD>
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<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 12 &#151; NONINTEREST
INCOME AND NONINTEREST EXPENSE</B> (Continued)  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
noninterest expense consisted of the following:  </FONT></P>


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<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=8><font face="Times New Roman, Times, Serif" size=1>Years Ended
      December 31, </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width=53% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Legal
      and professional fees </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      933 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      864 </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=9% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      646 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Director
      and committee fees </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>534 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>412 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>389 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Advertising
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>310 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>278 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>357 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>ATM and debit
      card expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>317 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>279 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>230 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Office and
      computer supplies </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>265 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>429 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>357 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Postage </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>187 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>180 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>156 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Phone expense
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>194 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>188 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>185 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Other </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,249 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,396 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,271 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,989 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 4,026 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,591 </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=3></td>
    <td colspan=3></td>
    <td colspan=2></td>
  </tr>
</table>
<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 13 &#151; COMMITMENTS
AND CONTINGENCIES </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the normal course of business, the Company enters into various transactions, which, in
accordance with generally accepted accounting principles, are not included in the
consolidated balance sheets. These transactions are referred to as &#147;off-balance sheet
commitments.&#148; The Company enters into these transactions to meet the financing needs
of its customers. These transactions include commitments to extend credit and letters of
credit, which involve elements of credit risk in excess of the amounts recognized in the
consolidated balance sheets. The Company minimizes its exposure to loss under these
commitments by subjecting them to credit approval and monitoring procedures.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company enters into contractual commitments to extend credit, normally with fixed
expiration dates or termination clauses, at specified rates and for specific purposes.
Customers use credit commitments to ensure that funds will be available for working
capital purposes, for capital expenditures and to ensure access to funds at specified
terms and conditions. Substantially all of the Company&#146;s commitments to extend credit
are contingent upon customers maintaining specific credit standards at the time of loan
funding. Management assesses the credit risk associated with certain commitments to extend
credit in determining the level of the allowance for credit losses.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Letters
of credit are written conditional commitments issued by the Company to guarantee the
performance of a customer to a third party. The Company&#146;s policies generally require
that letters of credit arrangements contain security and debt covenants similar to those
contained in loan agreements. In the event the customer does not perform in accordance
with the terms of the agreement with the third party, the Company would be required to
fund the commitment. The maximum potential amount of future payments the Company could be
required to make is represented by the contractual amount shown in the table below. If the
commitment is funded, the Company would be entitled to seek recovery from the customer. As
of December 31, 2002 and 2001, no amounts have been recorded as liabilities for the
Bank&#146;s potential obligations under these guarantees.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments
and letters of credit outstanding at year-end were as follows:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>Contract or<br>
      Notional Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
  </tr>
  <tr valign=Bottom>
    <td width=58% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Commitments
      to extend credit </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=13% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      27,838 </font></td>
    <td width=6% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=13% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      21,394 </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Letters of
      credit </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,140 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,042 </font></td>
  </tr>
</table>
<BR>

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<TD>



<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-29  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 13 &#151; COMMITMENTS
AND CONTINGENCIES</B> (Continued)  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company is involved in certain claims and lawsuits occurring in the normal course of
business. Management, after consultation with legal counsel, does not believe that the
outcome of these actions would have a material impact on the financial statements of the
Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guaranty
Leasing Company, a non-bank subsidiary of the Bank, was a partner in various equipment
leasing transactions involving leveraged leases. The transactions were structured as
&#147;wrap leases&#148; under which the partnerships are the lessees with respect to the
owners of the equipment and are the sublessors under the sublease with the users. During
2000, the Company sold its remaining interest in the wrap leases.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 14 &#151; REGULATORY
MATTERS </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Banks
and bank holding companies are subject to various regulatory capital requirements
administered by state and federal banking agencies. Capital adequacy guidelines and,
additionally for banks, prompt corrective action regulations involve quantitative measures
of assets, liabilities, and certain off-balance-sheet items calculated under regulatory
accounting practices. Capital amounts and classifications are also subject to qualitative
judgments by regulators about components, risk weighting, and other factors. Failure to
meet minimum capital requirements can initiate regulatory action. Management believes, as
of December 31, 2002 and 2001, that the Company and the Bank meet all capital adequacy
requirements to which they are subject.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-30  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 14 &#151; REGULATORY
MATTERS</B> (Continued)  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the consolidated and bank only actual capital levels in
addition to the requirements under prompt corrective action regulations.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding="0" cellspacing="0" width="600">
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>Actual </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>For Capital<br>
      Adequacy<br>
      Purposes </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=4><font face="Times New Roman, Times, Serif" size=1>To Be Well<br>
      Capitalized Under<br>
      Prompt Corrective<br>
      Action Provisions </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Ratio </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Ratio </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th><font face="Times New Roman, Times, Serif" size=1>Ratio </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><b>December
      31, 2002</b> </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT"><font face="Times New Roman, Times, serif" size="2"> </font></td>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Total
      capital to risk weighted assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT" width="100%"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      45,997 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">13.12
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      28,041 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">n/a
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">43,248
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">12.21
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">28,330
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      35,412 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">10.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Tier
      1 capital to risk weighted assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">42,305
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">12.06
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">14,021
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">n/a
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">39,556
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">11.17
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">14,165
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">21,247
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">6.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Tier
      1 capital to average assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">42,305
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.62
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">19,625
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">n/a
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">39,556
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.08
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">19,583
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">24,479
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">5.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2"><b>December
      31, 2001</b> </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Total
      capital to risk weighted assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      39,836 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">12.58
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      25,341 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">n/a
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">38,970
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">11.85
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">26,309
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">$
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">
      32,887 </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">10.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Tier
      1 capital to risk weighted assets </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">36,490
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">11.52
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">12,671
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">n/a
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">35,624
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">10.83
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">13,155
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">19,732
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">6.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;Tier
      1 capital to average assets: </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">36,490
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.44
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">17,288
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">n/a
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align="LEFT"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">35,624
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">8.25
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">17,269
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">4.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
    <td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">21,587
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;
      </font></td>
    <td align="RIGHT" nowrap><font face="Times New Roman, Times, serif" size="2">5.00
      </font></td>
    <td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">%
      </font></td>
  </tr>
</table>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December 31, 2002 and 2001, the Bank met the level of capital required to be
categorized as well capitalized under prompt corrective action regulations. Management is
not aware of any conditions subsequent to December 31, 2002 that would change the
Bank&#146;s capital category.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank is a state-charted banking association and therefore is subject to regulation,
supervision and examination by the Texas Department of Banking. The Bank is also a member
of the Federal Deposit Insurance Corporation (&#147;FDIC&#148;). Because the Federal
Reserve Bank (&#147;FRB&#148;) regulates the bank holding company parent of the Bank, the
FRB also has supervisory authority that directly affects the Bank. In addition, upon
making certain determinations with respect to the condition of any insured bank, such as
the Bank, the FDIC may begin proceedings to terminate a bank&#146;s federal deposit
insurance.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
paid by the Company are mainly provided by dividends from its subsidiaries. However,
certain restrictions exist regarding the ability of its bank subsidiary to transfer funds
to the Company in the form of cash dividends, loans or advances. These guidelines do not
currently restrict the Bank from paying normal dividends to the Company.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-31  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 15 &#151; FAIR
VALUES OF FINANCIAL INSTRUMENTS </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The estimated fair value approximates
carrying value for financial instruments except those described below:  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Securities</I>:
Fair values for securities are based on quoted market prices or dealer quotes. If a
quoted market price is not available, fair value is estimated using quoted market prices
for similar instruments.  </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Loans</I>:
The fair value of fixed-rate loans and variable-rate loans which reprice on an infrequent
basis is estimated by discounting future cash flows using the current interest rates at
which similar loans with similar terms would be made to borrowers of similar credit
quality.  </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Deposits</I>:
The fair value of deposit liabilities with defined maturities and long-term debt is
estimated by discounting future cash flows using the interest rates currently offered for
deposits or similar borrowings of similar remaining maturities.  </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>FHLB
Advances and Long-Term Debt</I>: The fair value of borrowings is estimated by discounting
future cash flows using currently available rates for similar financing.  </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Off-Balance-Sheet
Instruments</I>: The fair values of these items are not material and are therefore not
included on the following schedule.  </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
estimated year-end fair values of financial instruments are detailed in the following
table. The fair value of financial instruments is defined as the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than
in a forced or liquidation sale.  </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=5><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Carrying<br>
      Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Estimated<br>
      Fair Value </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Carrying<br>
      Amount </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Estimated<br>
      Fair Value </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=50% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Financial
      assets: </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=8% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Cash
      and cash equivalents </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 18,244
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 18,244
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 15,410
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 15,410
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Federal
      funds sold </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,530 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,530 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,395 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,395 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Securities
      available for sale </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>106,992
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>106,992
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>81,715 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>81,715 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Loans
      held for sale </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,727 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,727 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,634 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,634 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Loans,
      net </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>356,196
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>356,968
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>326,275
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>329,439
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Accrued
      interest receivable </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,002 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,002 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,167 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,167 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Cash
      surrender value of life insurance </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,860 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,860 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,178 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,178 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2><br>
      Financial liabilities: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Deposits
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 424,950
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 426,481
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 383,279
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 378,641
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;FHLB
      advances </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>42,763 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>44,287 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>33,092 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>32,692 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>12,505 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,663 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Accrued
      interest payable </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,150 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,150 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,383 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,383 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
</table>
<BR>

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<TD>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
these estimates of fair value are based on management&#146;s judgment of appropriate
factors, there is no assurance that, were the Company to have disposed of such items at
December 31, 2002 and 2001, the estimated fair values would necessarily have been achieved
at those dates, since market values may differ depending on various circumstances. The
estimated fair values at December 31, 2002 and 2001, should not necessarily be considered
to apply at subsequent dates.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-32  </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
</TD>
</TR>
</TABLE>
<BR>

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<TD><BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 15 &#151; FAIR VALUES
OF FINANCIAL INSTRUMENTS</B> (Continued)  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, other assets, such as property and equipment, and liabilities of the Company
that are not defined as financial instruments are not included in the above disclosures.
Also, nonfinancial instruments typically not recognized in financial statements
nevertheless may have value but are not included in the above disclosures. These include,
among other items, the estimated earning power of core deposit accounts, the trained work
force, customer goodwill and similar items.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 16 &#151; PARENT
COMPANY ONLY CONDENSED FINANCIAL STATEMENTS </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed
financial information of the Company is as follows:  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Condensed Balance
Sheets<BR>
December 31,
2002 and 2001  </FONT></H1>


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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=66% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Assets</b>
      </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=10% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=5% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=10% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Cash
      and cash equivalents </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,244 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 370 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Investment
      in subsidiaries </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>41,898 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>37,966 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Cash
      surrender value of life insurance </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>896 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>838 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Premises
      and equipment, net </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>23 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Other
      assets </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>203 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>132 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 45,264
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 39,309
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Liabilities and Shareholders&#146; Equity</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Other
      liabilities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>620 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>482 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Long-term
      debt </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Shareholders&#146;
      equity </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>34,644 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>31,827 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 45,264
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 39,309
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Condensed Statements
of Earnings<BR>
 Years ended December 31, 2002, 2001 and 2000  </FONT></H1>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=67% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Operating
      income</b> </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Dividends
      from subsidiaries </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,100 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 250 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> &#151;
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Interest
      on interest-bearing deposits </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      operating income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,100 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>250 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Costs
      and expenses</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Interest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>796 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>772 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>600 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;General
      and administrative </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>369 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>279 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>394 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
      costs and expenses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,165 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,051 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>994 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings
      before income tax </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>935 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(801 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(990 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Provision
      for income taxes</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Earnings
      before equity in undistributed earnings of subsidiaries</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>935 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(801 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(990 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Equity
      in undistributed earnings of subsidiaries </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,442 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,091 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,498 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Net
      earnings</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 4,377 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,290 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,508 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-33  </FONT></P>

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</TD>
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<BR>

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<TD><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands)  </FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Left Bold-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 16 &#151; PARENT
COMPANY ONLY CONDENSED FINANCIAL STATEMENTS</B> (Continued)  </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Condensed Statements
of Cash Flows<BR>
Years ended December
31, 2002, 2001 and 2000   </FONT></H1>

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</TD>
</TR>
</TABLE>
<BR>


<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2002 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2001 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>2000 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=66% align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      flows from operating activities</b> </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=4% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=6% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Net
      earnings </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 4,377 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 3,290 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,508 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;Adjustments
      to reconcile net earnings to net cash used in </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating
      activities: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity
      in undistributed earnings of subsidiaries </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,442 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(4,091 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,498 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
      and amortization </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>8 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      change in other assets </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(129 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>294 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(387 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      change in other liabilities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>138 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(14 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>446 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
      compensation expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>49 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash provided by (used in) operating activities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,002 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(513 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(922 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Cash flows from investing activities</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Purchase
      of subsidiary stock </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,502 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Purchases
      of premises and equipment </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(29 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash (used in) investing activities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(29 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,502 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><br>
      <b>Cash flows from financing activities</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Purchase
      of treasury stock </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,167 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(433 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,046 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Proceeds
      from issuance of trust preferred securities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,000 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Exercise
      of stock options </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>19 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&#151; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Cash
      dividends paid </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(951 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(841 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(769 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
      cash provided by (used in) financing activities </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>901 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,274 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,185 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Net
      change in cash and cash equivalents</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,874 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,787 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>) </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,761 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      and cash equivalents at beginning of year</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>370 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,157 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>396 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size="2"><b>Cash
      and cash equivalents at end of year</b> </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,244 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 370 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,157 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
</table>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-34  </FONT></P>

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<BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GUARANTY BANCSHARES, INC.<BR>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
December 31, 2002, 2001 and 2000<BR>
(Dollars in thousands, except per share amounts)  </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 17 &#151; QUARTERLY
FINANCIAL DATA &#151; UNAUDITED </B>  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed
quarterly results of operations for the years ended December 31, 2002 and 2001 were as
follows:  </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Year ended December
31, 2002  </FONT></H1>

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<BR>

<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Dec. 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Sept. 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>June 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>March 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=54% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Interest
      income </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,324 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,357 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,194 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,080 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Interest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,972 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,061 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,099 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,140 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,352 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,296 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,095 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,940 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>225 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>335 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>450 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>250 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income after provision for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,127 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,961 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,645 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,690 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,320 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,227 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,475 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,034 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,945 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,683 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,574 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,490 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      before taxes </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,502 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,505 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,546 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,234 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for income tax expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>292 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>413 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>453 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>252 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net earnings
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,210 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,092 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,093 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 982 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      per common share: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Basic
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.41 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.36 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.36 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.33 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Diluted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.40 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.36 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.36 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.33 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
</table>
<BR>



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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Year ended December
31, 2001  </FONT></H1>

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</TD>
</TR>
</TABLE>
<BR>

<table cellpadding=0 cellspacing=0 border=0 width=600>
  <tr valign=Bottom>
    <th colspan=3><font face="Times New Roman, Times, Serif" size=1> </font></th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Dec. 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>Sept. 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>June 30 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font face="Times New Roman, Times, Serif" size=1>March 31 </font>
      <hr width=95% size=1 NOSHADE>
    </th>
    <th>&nbsp;</th>
  </tr>
  <tr valign=Bottom>
    <td width=54% align=LEFT><font face="Times New Roman, Times, Serif" size=2>Interest
      income </font></td>
    <td width=1% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,230 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,522 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,493 </font></td>
    <td width=3% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
    <td width=1% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$
      </font></td>
    <td width=7% align=RIGHT><font face="Times New Roman, Times, Serif" size=2>
      7,616 </font></td>
    <td width=2% align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;
      </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Interest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,566 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,024 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,273 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>4,500 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,664 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,498 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,220 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,116 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>704 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>341 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>185 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>155 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net interest
      income after provision for loan losses </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,960 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,157 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,035 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,961 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      income </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,604 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,247 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,092 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,258 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Noninterest
      expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,701 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,346 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,207 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,265 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      before taxes </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,863 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,058 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>920 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>954 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Provision
      for income tax expense </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>853 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>239 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>197 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>216 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Net earnings
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 1,010 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 819 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 723 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 738 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr>
    <td colspan=3></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
    <td colspan=2 align=RIGHT>
      <hr NOSHADE size=2>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>Earnings
      per common share: </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Basic
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.34 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.27 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.24 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.24 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;Diluted
      </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.34 </font></td>
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    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.27 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.24 </font></td>
    <td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp; </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>$ </font></td>
    <td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0.24 </font></td>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>F-35  </FONT></P>

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