<SEC-DOCUMENT>0000950123-11-077861.txt : 20110816
<SEC-HEADER>0000950123-11-077861.hdr.sgml : 20110816
<ACCEPTANCE-DATETIME>20110816114224
ACCESSION NUMBER:		0000950123-11-077861
CONFORMED SUBMISSION TYPE:	PRE 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20111011
FILED AS OF DATE:		20110816
DATE AS OF CHANGE:		20110816

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CENTRAL FEDERAL CORP
		CENTRAL INDEX KEY:			0001070680
		STANDARD INDUSTRIAL CLASSIFICATION:	SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
		IRS NUMBER:				341877137
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		PRE 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25045
		FILM NUMBER:		111039186

	BUSINESS ADDRESS:	
		STREET 1:		C/O CENTRAL FEDERAL BANK
		STREET 2:		601 MAIN ST
		CITY:			WELLSVILLE
		STATE:			OH
		ZIP:			43968
		BUSINESS PHONE:		3305321517

	MAIL ADDRESS:	
		STREET 1:		C/O CENTRAL FEDERAL BANK
		STREET 2:		601 MAIN ST
		CITY:			WELLSVILLE
		STATE:			OH
		ZIP:			43968

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GRAND CENTRAL FINANCIAL CORP
		DATE OF NAME CHANGE:	19980918
</SEC-HEADER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>c21565pre14a.htm
<DESCRIPTION>PRELIMINARY PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Preliminary Proxy Statement</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="center" style="font-size: 14pt; margin-top: 6pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

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

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt">Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;___)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Filed by the Registrant <FONT face="wingdings" size="2">&#254;</FONT><BR>
Filed by a Party other than the Registrant <FONT face="wingdings" size="2">&#111;</FONT>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box:

</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#254;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Preliminary Proxy Statement</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD><B>Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-</B><B>6(e)(2)</B><B>)</B></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Definitive Proxy Statement</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Definitive Additional Materials</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Soliciting Material Pursuant to &#167;240.14a-12</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt">&nbsp;</DIV>

<DIV align="center">
Central Federal Corporation</DIV>
<DIV align="center" style="font-size: 10pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Name of Registrant as Specified In Its Charter)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">&nbsp;</DIV>

<DIV align="center">
</DIV>
<DIV align="center" style="font-size: 10pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):

</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#254;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>No fee required.</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(1)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Title of each class of securities to which transaction applies:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(2)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Aggregate number of securities to which transaction applies:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(3)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(4)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(5)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Total fee paid:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Fee paid previously with preliminary materials.</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(1)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Amount Previously Paid:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(2)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Form, Schedule or Registration Statement No.:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(3)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Filing Party:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(4)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Date Filed:</TD>
</TR>

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

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CENTRAL FEDERAL CORPORATION<BR>
LETTERHEAD</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Dear Stockholder:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">You are cordially invited to attend the Special Meeting of Stockholders (the &#147;Special Meeting&#148;) of
Central Federal Corporation (the &#147;Company,&#148; &#147;we,&#148; &#147;our&#148; or &#147;us&#148;). The Special Meeting will be held
at Fairlawn Country Club located at 200 North Wheaton Road, Fairlawn,
Ohio, on <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011 at <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>., local time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As previously disclosed by the Company and more fully described in the accompanying proxy
statement, on August&nbsp;9, 2011, we announced that we had entered into standby purchase agreements
(the &#147;Standby Purchase Agreements&#148;) with certain standby purchasers (the &#147;Standby Purchasers&#148;)
pursuant to which the Standby Purchasers will invest $5.0&nbsp;million in the Company&#146;s common stock,
which we will invest in our banking subsidiary, CFBank (the &#147;Bank&#148;). We entered into the Standby
Purchase Agreements with the Standby Purchasers as part of a series of transactions contemplated by
our recapitalization plan to satisfy the requirements of our federal banking regulators. As part of
the recapitalization plan set forth in the Standby Purchase Agreements and described in the
attached proxy statement, we intend to conduct a rights offering and a public offering, and the
Standby Purchasers have agreed to purchase $5.0&nbsp;million of newly issued shares of common stock and
warrants if we are able to raise a minimum of $16.5&nbsp;million in net proceeds through the sale of
common stock and warrants to other stockholders and the general public through the rights offering
and public offering. The rights offering will allow stockholders who hold shares of our common
stock on <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011 to purchase additional shares of our common stock and warrants at the same
purchase price per share to be paid by the Standby Purchasers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">At the Special Meeting, stockholders will be asked to consider and vote upon proposals to approve
an increase in the number of authorized shares, the issuance of our common stock and warrants to
the Standby Purchasers and a reverse split of our outstanding common stock. Our Board of Directors
has approved these proposals and unanimously recommends that our stockholders vote &#147;FOR&#148; each of
the proposals. Unless stockholder approval is obtained for the increase in the number of
authorized shares and the issuance of common stock and warrants to the Standby Purchasers, the
investment by the Standby Purchasers and the recapitalization of the Company and the Bank will not
occur. As we discuss in the accompanying proxy statement, the failure to approve the proposals at
the Special Meeting could have significant adverse consequences to the Company, the Bank and
existing holders of our common stock, including additional regulatory action such as receivership
or liquidation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Please read the attached proxy statement carefully for information concerning the proposals we are
asking you to approve. Your vote is very important to us, and it is very important that you be
represented at the Special Meeting regardless of the number of shares you own or whether you are
able to attend the meeting in person. We urge you to mark, sign, and date your proxy card today
and return it in the envelope provided, even if you plan to attend the Special Meeting. This will
not prevent you from voting in person at the Special Meeting, but will ensure that your vote is
counted if you are unable to attend. The attached proxy statement and proxy card contain
instructions on how to properly complete the proxy card and to vote your shares by mail.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Your continued support of and interest in the Company are sincerely appreciated.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sincerely,</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Eloise L. Mackus</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer, General Counsel and Secretary</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Central Federal Corporation<BR>
2923 Smith Road<BR>
Fairlawn, Ohio 44333<BR>
(330)&nbsp;666-7979</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>NOTICE OF SPECIAL MEETING OF STOCKHOLDERS<BR>
To Be Held on &#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;, 2011</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Central Federal Corporation (the
&#147;Company,&#148; &#147;we,&#148; &#147;our&#148; or &#147;us&#148;) will be held at Fairlawn Country Club located at 200 North Wheaton
Road, Fairlawn, Ohio, on <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011 at <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>., local time, for the following purposes, all
of which are more completely set forth in the accompanying proxy statement:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to consider and vote upon a proposal to amend our Certificate of
Incorporation, as amended, to increase the number of authorized common shares from 12&nbsp;million to 50&nbsp;million;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to consider and vote upon a proposal to issue and sell a number of
shares of common stock equal to more than 20% of our outstanding
common stock in accordance with the terms of the Standby Purchase
Agreements between the Company and the Standby Purchasers;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to consider and vote upon a proposal to grant discretionary authority
to the Company&#146;s Board of Directors to amend our Certificate of Incorporation, as amended, to affect a reverse stock split of the
Company&#146;s common stock in a specific ratio ranging from 1-for-2 to
1-for-5, as selected by the Company&#146;s Board of Directors; and</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to consider and vote upon a proposal to adjourn the Special Meeting,
if necessary, to solicit additional proxies, in the event there are
not sufficient votes at the time of the Special Meeting to approve
proposals 1, 2 or 3.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Proposal 1 will be implemented if approved by our stockholders even if Proposals 2 and 3 are not
approved by our stockholders at the Special Meeting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Board of Directors has fixed <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011 as the voting record date for the determination of
stockholders entitled to receive notice of and to vote at the Special Meeting and any adjournments
thereof. Only those stockholders of record as of the close of business on <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011 will be
entitled to vote at the Special Meeting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Board of Directors unanimously recommends that stockholders vote &#147;FOR&#148; approval of each of the
proposals listed above.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BY ORDER OF THE BOARD OF DIRECTORS</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Eloise L. Mackus</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer, General Counsel and Secretary</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Fairlawn, Ohio<BR>
<B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011

</DIV>


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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD ON <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The proxy materials for the Special Meeting of Stockholders, which consist of a proxy statement,
proxy card, our Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2010, our
Quarterly Report on Form 10-Q for the six months ended June&nbsp;30, 2011 and the Form of Standby
Purchase Agreement contained in the Current Report on Form 8-K dated August&nbsp;11, 2011, are attached
hereto and are also available over the Internet at
<u>www.CFBankonline.com</u>. Except as expressly set
forth herein, our internet website and the information contained therein or connected thereto are
not intended to be incorporated into this proxy statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IF YOU ARE THE RECORD OWNER OF YOUR SHARES AND YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY PROXY. IF YOUR SHARES ARE HELD BY A BANK, BROKER, CUSTODIAN OR OTHER NOMINEE AND YOU
WISH TO VOTE AT THE MEETING IN PERSON, YOU MUST OBTAIN FROM THE RECORD HOLDER OF YOUR SHARES AND
BRING WITH YOU A PROXY FROM THE RECORD HOLDER ISSUED IN YOUR NAME.
</DIV>



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

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

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

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="C21565tocpage"></A>
</DIV>

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

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565101">PROXY STATEMENT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565102">QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING OF STOCKHOLDERS AND THIS PROXY STATEMENT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565103">What is the purpose of the Special Meeting?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565104">Why is the Recapitalization taking place?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565105">Why did you send me this proxy statement?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565106">Who is entitled to vote?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565107">Can I access the Company&#146;s proxy materials electronically?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565108">Why is the Amendment being proposed?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565109">Must the Amendment and the Standby Issuance be approved for the Recapitalization to proceed?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565110">What happens if the Amendment and the Standby Issuance are approved?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565111">What happens if the Reverse Split is approved?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565112">How do I vote?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565113">If my shares are held in street name by my bank, broker, custodian or other nominee, could such
bank, broker, custodian or other nominee automatically vote my shares for me?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565114">Can I attend the meeting and vote my shares in person?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565115">Can I change my vote or revoke my proxy after I return my proxy card?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565116">What constitutes a quorum?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565117">What happens if a quorum is not present?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565118">What are the Board of Directors&#146; recommendations?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565119">What vote is required to approve each proposal?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565120">Who pays the cost for soliciting proxies by the Board of Directors?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565121">Whom should I contact if I have questions?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565122">Am I entitled to appraisal rights?</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565123">BACKGROUND TO THE PROPOSALS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565124">Summary of Standby Purchase Agreements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565125">The Offering</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565126">The Reverse Split</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565127">Risk Factors &#151; Risks Relating to Proposals 1 and 2</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565128">Stockholders Will Face Significant Dilution as a Result of the Offering</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565129">PROPOSAL 1 &#151; THE AMENDMENT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565130">General</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565131">Reasons for Request for Stockholder Approval</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565132">Consequences if the Increase in Authorized Shares is Not Approved by the Stockholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565133">Recommendation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<!-- /TOC -->
</DIV>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565134">PROPOSAL 2 &#151; THE STANDBY ISSUANCE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565135">Background</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565136">The Stock Offerings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565137">Principal Effects on Outstanding Common Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565138">Reasons for Requesting Stockholder Approval</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565139">Consequences if this Proposal is Not Approved by the Stockholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565140">Recommendation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565141">PROPOSAL 3 &#151; THE REVERSE SPLIT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565142">Purpose of the Reverse Split</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565143">Effect on Authorized but Unissued Shares of Common Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565144">Effect on Outstanding Stock Options and Warrants</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565145">Effect on Par Value</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565146">Reduction in Stated Capital</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565147">Procedure for Affecting the Reverse Split; Exchange of Stock Certificates</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565148">Fractional Shares and Odd Lots</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565149">Possible Effects of Approving the Proposed Reverse Split</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565150">Possible Effects of NOT Approving the Proposed Reverse Split</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565151">No Dissenter&#146;s Rights</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565152">Federal Income Tax Consequences of the Reverse Split</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565153">Recommendation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565154">PROPOSAL 4 &#151; THE ADJOURNMENT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565155">Board Recommendation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565156">BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565157">Security Ownership of Directors and Executive Officers</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565158">STOCKHOLDER PROPOSALS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565159">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565160">INCORPORATION BY REFERENCE OF FINANCIAL STATEMENTS AND RELATED INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#C21565161">CAUTIONARY AND FORWARD-LOOKING STATEMENTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565162">Cautionary Statement</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#C21565163">Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CENTRAL FEDERAL CORPORATION</B>
</DIV>

<DIV align="left">
<A name="C21565101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROXY STATEMENT</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>SPECIAL MEETING OF STOCKHOLDERS</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;, 2011</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This proxy statement is being furnished to holders of common stock, $.01 par value per share, of
Central Federal Corporation (the &#147;Company,&#148; &#147;we,&#148; &#147;our&#148; or &#147;us&#148;), the holding company of CFBank
(the &#147;Bank&#148; or &#147;CFBank&#148;). Proxies are being solicited by our Board of Directors on behalf of the
Company to be used at the Special Meeting of Stockholders (the &#147;Special Meeting&#148;) to be held at
Fairlawn Country Club located at 200 North Wheaton Road, Fairlawn, Ohio on <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011 at <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>., local time.
This proxy statement, the enclosed proxy card, our Annual Report on Form 10-K for
the fiscal year ended December&nbsp;31, 2010, our Quarterly Report on Form 10-Q for the six months ended
June&nbsp;30, 2011 and the form of Standby Purchase Agreement contained in the Current Report on Form
8-K dated August&nbsp;11, 2011 are first being mailed to stockholders on or about <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011.
</DIV>

<DIV align="left">
<A name="C21565102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>QUESTIONS AND ANSWERS<BR>
ABOUT THE SPECIAL MEETING OF STOCKHOLDERS<BR>
AND THIS PROXY STATEMENT</B>
</DIV>

<DIV align="left">
<A name="C21565103"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What is the purpose of the Special Meeting?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">At the Special Meeting, stockholders will act upon proposals to: (i)&nbsp;amend our Certificate of
Incorporation, as amended, (the &#147;Certificate of Incorporation&#148;) to increase the number of
authorized common shares from 12&nbsp;million to 50&nbsp;million (the &#147;Amendment&#148;); (ii)&nbsp;issue a number of
shares of common stock equal to more than 20% of our outstanding common stock in accordance with
the terms of the Standby Purchase Agreements dated as of August&nbsp;8, 2011 (the &#147;Standby Purchase
Agreements&#148;) between the Company and the Standby Purchasers (the &#147;Standby Issuance&#148;); (iii)&nbsp;grant
discretionary authority to the Company&#146;s Board of Directors to amend our Certificate of
Incorporation to effect a reverse stock split of the Company&#146;s common stock in a specific ratio
ranging from 1-for-2 to 1-for-5, as selected by the Company&#146;s Board of Directors (the &#147;Reverse
Split&#148;); and (iv)&nbsp;adjourn the Special Meeting, if necessary, to solicit additional proxies, in the
event there are not sufficient votes at the time of the Special Meeting to approve any of the
matters described in (i), (ii)&nbsp;or (iii)&nbsp;above (the &#147;Adjournment&#148;). The Amendment, the Standby
Issuance, the Reverse Split and the other transactions contemplated thereby are sometimes
collectively referred to in this proxy statement as the &#147;Recapitalization.&#148;
</DIV>

<DIV align="left">
<A name="C21565104"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Why is the Recapitalization taking place?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Recapitalization has been initiated in response to a number of challenges we have faced in
recent periods. The economic downturn in our market areas and resulting decline in real estate
values have had a direct and adverse effect on our financial condition and results of operations,
as well as the results of operations of the Bank, our wholly-owned subsidiary. These direct and
adverse effects include reductions in our capital levels and the capital levels of the Bank as a
result of our losses in 2009, 2010 and continuing into 2011, primarily due to expenses related to
our non<B>-</B>performing assets, particularly elevated loan charge-offs and increases in our provision
for loan losses and real estate owned expenses. Furthermore, as described below, we and the Bank
are subject to orders (the &#147;Bank Cease and Desist Order&#148; and the &#147;Company Cease and Desist Order&#148;
and, together, the &#147;Cease and Desist Orders&#148;), issued on May&nbsp;25, 2011 by the Office of Thrift
Supervision (the &#147;OTS&#148;), our and the Bank&#146;s then primary regulator, requiring us to take steps to
improve our and the Bank&#146;s financial condition and results of operations, including increasing the
Bank&#146;s capital levels. Due to these challenges, we have been pursuing strategic alternatives to
raise capital and strengthen our balance sheet and that of the Bank. Our Board of Directors has
worked closely with management and our advisors to evaluate potential alternatives for raising
additional capital, including possibly selling common stock in public or private offerings, selling
branches and related assets<B>, </B>finding a strategic merger partner and considering other strategic
alternatives.
</DIV>


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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are conducting the Recapitalization to return us to a sound capital footing and to satisfy our
and the Bank&#146;s obligations pursuant to the Cease and Desist Orders.
</DIV>

<DIV align="left">
<A name="C21565105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Why did you send me this proxy statement?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We sent you this proxy statement and the enclosed proxy card because the Board of Directors is
soliciting your proxy vote to be used at the Special Meeting. This proxy statement summarizes
information on the proposals to be considered at the Special Meeting, including information
regarding the Recapitalization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Board of Directors has determined that it is in the best interests of the Company and its
stockholders that the Company undertake the Recapitalization in accordance with which:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subject to stockholder approval, the Company will amend its
Certificate of Incorporation to increase the number of authorized common shares from 12
million to 50&nbsp;million in order to have sufficient shares available to effect the
Recapitalization;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subject to stockholder approval, the Company will issue and
sell to the Standby Purchasers 5.0&nbsp;million shares of common stock at $1.00 per share
pursuant to the Standby Purchase Agreements in a Standby Issuance concurrently with the
rights offering and public offering (together, the &#147;Offering&#148;) described below. A
minimum of $16.5&nbsp;million in net proceeds must be received in the Offering (excluding the
Standby Purchasers&#146; $5.0&nbsp;million and a discount, if any, on the redemption price of the
7,225 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series&nbsp;A (&#147;Series&nbsp;A
Preferred Shares&#148;), as may be agreed to by the United States Department of Treasury
(&#147;Treasury&#148;)) or no shares will be sold and the Recapitalization will not take place;
and</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subject to stockholder approval, the Company currently intends to affect the Reverse
Split following the Offering.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The section of this proxy statement entitled <I>Background to the Proposals &#151; Summary of Standby
Purchase Agreements </I>contains a summary of the Recapitalization and the terms of the Standby
Purchase Agreements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Upon the issuance and sale to the Standby Purchasers of 5.0&nbsp;million shares in the Standby Issuance,
they will own at least 18.8% of our common stock at the minimum of the offering range, and will own
14.7% of our common stock at the maximum of the offering range. As a result, our current
stockholders would own between approximately 81.2% and 85.3% of our common stock following the
Offering at the minimum and maximum of the offering range, respectively, assuming the existing
stockholders purchase all the shares of common stock offered pursuant to the Offering. If existing
stockholders purchase no shares in the Offering, they would own &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;% and &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;%, respectively,
of our common stock following the Offering at the minimum and maximum of the offering range.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The summary of the material terms of the Standby Purchase Agreements is qualified in its entirety
by reference to the full text of this document, the form of which is attached to this proxy
statement and incorporated by reference herein.
</DIV>

<DIV align="left">
<A name="C21565106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Who is entitled to vote?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Only our stockholders of record as of the close of business on the record date, <B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011, are
entitled to vote at the Special Meeting. On the record date, we had (i)&nbsp;4,127,798 shares of common
stock issued and outstanding and (ii)&nbsp;7,225 shares of Series&nbsp;A Preferred Stock issued and
outstanding. Each share of common stock is entitled to one vote on each matter to be voted on at
the Special Meeting except that, as provided in the Company&#146;s Certificate of Incorporation, record
holders of common stock that is beneficially owned, either directly or indirectly, by a person
(either a natural person or an entity) who beneficially owns a total number of shares of common
stock in excess of 10% of the outstanding shares of common stock (the &#147;10% limit&#148;) are not entitled
to vote their shares that are in excess of the 10% limit, and those shares are not treated as
outstanding for voting purposes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A person is deemed to beneficially own shares owned by an affiliate of, as well as by persons
acting in concert with, such person. The Company&#146;s Certificate of Incorporation authorizes the
Board of Directors (i)&nbsp;to make all determinations necessary to implement and apply the 10% limit,
including determining whether persons are acting in concert, and (ii)&nbsp;to demand that any person who
is reasonably believed to beneficially own stock in excess of the 10% limit supply information to
the Company to enable the Board of Directors to implement and apply the 10% limit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of the record date, there was one person that was known to the Company to be the beneficial
owner of more than 10% of the Company&#146;s outstanding common stock. See &#147;Beneficial Ownership of
Common Stock by Certain Beneficial Owners and Management and Related Stockholder Matters.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Holders of shares of Series&nbsp;A Preferred Stock are not entitled to vote on the matters to be voted
on at the Special Meeting.
</DIV>

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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565107"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Can I access the Company&#146;s proxy materials electronically?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of the
Stockholders to Be Held on &#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;, 2011. The proxy statement, proxy card, our Annual Report on
Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2010, our Quarterly Report on Form&nbsp;10-Q for the
six months ended June&nbsp;30, 2011 and our current report on Form&nbsp;8-K dated August&nbsp;11, 2011 are
available at www. CFBankonline.com.</B>
</DIV>

<DIV align="left">
<A name="C21565108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Why is the Amendment being proposed?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In order to consummate the Recapitalization, the Company must have a sufficient number of shares of
common stock available for issuance to the Standby Purchasers, existing stockholders and others who
participate in the Offering. At the present time, the Company&#146;s capital structure will not permit
us to issue enough shares to satisfy the minimum number of shares that may be issued in the
Offering. If approved, the Amendment will result in an increase in the number of shares of our
common stock available for issuance.
</DIV>

<DIV align="left">
<A name="C21565109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Must the Amendment and the Standby Issuance be approved for the Recapitalization to proceed?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Yes. Each of the Amendment and the Standby Issuance must be approved as a condition to the
Recapitalization taking place. If the Amendment is approved but the Standby Issuance is not, the
Recapitalization will not occur; however, the number of authorized common shares will be increased.
</DIV>

<DIV align="left">
<A name="C21565110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What happens if the Amendment and the Standby Issuance are approved?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If our stockholders approve the Amendment and the Standby Issuance, then promptly following such
approvals, we will file with the Secretary of State of the State of Delaware an amendment to our
Certificate of Incorporation to affect the increase in the number of our authorized common shares.
The Amendment will become effective upon filing with the Secretary of State. For additional
information regarding the Amendment, please see the section of this proxy statement entitled
Proposal 1 &#151; The Amendment beginning on page &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As promptly as possible following the approval by stockholders of the Amendment and the Standby
Issuance, we intend to commence the Offering described above.
</DIV>

<DIV align="left">
<A name="C21565111"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What happens if the Reverse Split is approved?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If our stockholders approve the Reverse Split and also approve the Amendment and the Standby
Issuance, our Board of Directors currently intends to affect the Reverse Split promptly following
completion of the Offering and the Standby Issuance. If the Reverse Split is approved by our
stockholders but the Amendment and the Standby Issuance are not both approved by stockholders, or
circumstances change between the date of this proxy statement and the completion of the Offering,
the Board of Directors will use its best judgment in determining whether or not to affect the
Reverse Split.
</DIV>

<DIV align="left">
<A name="C21565112"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>How do I vote?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If your shares are registered in your name, or, in other words, you are the record holder of your
shares or a stockholder of record, you may vote in person at the Special Meeting or by proxy
without attending the Special Meeting. Record stockholders may mark, sign, date, and mail the
proxy card you received from the Company in the return envelope. If you vote by attending the
Special Meeting or by submitting a proxy card, your shares will be voted at the meeting in
accordance with your instructions. If you sign and return the proxy card but do not give any
instructions on some or all of the proposals, your shares will be voted by the persons named in the
proxy card on all uninstructed proposals in accordance with the recommendations of the Board of
Directors given below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If your shares are held in the name of a bank, broker, custodian or other nominee, please mark,
date, sign, and return the voting instruction form you received from your broker or other nominee
with this proxy statement. As indicated on the form or other documentation provided by your bank,
broker, custodian or other nominee, you may have the choice of voting your shares over the Internet
or by telephone as instructed by your bank, broker, custodian or other nominee. To do so, follow
the instructions on the form you received.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If your shares are held by a bank, broker, custodian or other nominee, such bank, broker, custodian
or other nominee is deemed the record holder of your shares. If you wish to vote in person at the
meeting, you must obtain from the record holder (i.e. your bank, broker, custodian or other
nominee), and bring with you to the meeting, a proxy from such record holder issued in your name.
</DIV>

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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>If my shares are held in street name by my bank, broker, custodian or other nominee,
could such bank, broker, custodian or other nominee automatically vote my shares for me?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">No.&nbsp;Under New York Stock Exchange Rule&nbsp;452, which governs NYSE brokerage members, brokers are
entitled to vote shares held by them for their customers on matters deemed &#147;routine&#148; under
applicable rules, even though the brokers have not received voting instructions from their
customers. Although shares of our common stock are listed on the Nasdaq Stock Market, Rule&nbsp;452
affects us because our common shares held in &#147;street name&#148; may be held with NYSE member-brokers.
Brokerage firms may not vote on &#147;non-routine&#148; matters in their discretion on behalf of their
clients if such clients have not furnished voting instructions. A broker non-vote occurs when a
broker&#146;s customer does not provide the broker with voting instructions on &#147;non-routine&#148; matters for
shares owned by the customer but held in the name of the broker. For such &#147;non-routine&#148; matters,
the broker cannot vote either FOR or AGAINST a proposal and reports the number of such shares as
&#147;non-votes.&#148; We believe that the proposals to approve the Amendment, to approve the
Standby Issuance and to approve the Reverse Split are &#147;non-routine&#148; matters. Your broker,
therefore, may NOT vote your shares in its discretion on these &#147;non-routine&#148; matters if you do not
instruct your broker how to vote on them.
</DIV>

<DIV align="left">
<A name="C21565114"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Can I attend the meeting and vote my shares in person?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Yes. All stockholders are invited to attend the Special Meeting. Stockholders of record can vote
in person at the Special Meeting. If your shares are held by a bank, broker, custodian or other
nominee and you wish to vote in person at the Special Meeting, you must obtain from the record
holder, and bring with you, a proxy from the record holder issued in your name. The Special
Meeting will be held at Fairlawn Country Club located at 200 North Wheaton Road, Fairlawn, Ohio.
</DIV>

<DIV align="left">
<A name="C21565115"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Can I change my vote or revoke my proxy after I return my proxy card?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Yes. If you are a stockholder of record, there are three ways you can change your vote or revoke
your proxy any time before the proxy is voted.
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>First, you may send a written notice to Ms.&nbsp;Eloise L.
Mackus, Chief Executive Officer, General Counsel and Secretary, Central Federal
Corporation, 2923 Smith Road, Fairlawn, Ohio 44333, stating that you would like to
revoke your proxy.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Second, you may complete and submit a new proxy card with a
later date. Any earlier proxies will be revoked automatically by subsequently dated
proxies.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Third, you may attend the Special Meeting and vote in
person. Any earlier proxy will be revoked. However, attending the Special Meeting
without voting in person will not revoke your proxy.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If you have instructed a broker or other nominee to vote your shares, you must follow directions
you receive from your broker or other nominee to change your vote.
</DIV>

<DIV align="left">
<A name="C21565116"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What constitutes a quorum?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A quorum with respect to a matter considered at the Special Meeting consists of stockholders
representing, either in person or by proxy, a majority of the outstanding capital stock entitled to
vote on such matter at the Special Meeting. Proxies received but marked &#147;abstain&#148; and broker
non-votes will be included in the calculation of the number of votes considered to be present at
the meeting. As discussed above, a broker non-vote occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does not have
discretionary power with respect to that item and has not received instructions from the beneficial
owner.
</DIV>

<DIV align="left">
<A name="C21565117"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What happens if a quorum is not present?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If a quorum is not present, our stockholders may adjourn the Special Meeting until the time and to
the place as may be determined by a vote of the holders of the majority of the shares which are
present or represented by proxy at the Special Meeting.
</DIV>

<DIV align="left">
<A name="C21565118"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What are the Board of Directors&#146; recommendations?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The recommendations of the Board of Directors are set forth under the description of each Proposal
in this proxy statement. In summary, the Board of Directors recommends that you vote (i) &#147;FOR&#148; the
Amendment, (ii) &#147;FOR&#148; the Standby Issuance, (iii) &#147;FOR&#148; the Reverse Split and (iv) &#147;FOR&#148; the
adjournment of the Special Meeting, if necessary, to solicit additional proxies, in the event there
are not sufficient votes at the time of the Special Meeting to approve any of items (i), (ii)&nbsp;or
(iii)&nbsp;above.
</DIV>

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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If you vote by attending the Special Meeting or submitting a completed proxy card, your shares will
be voted at the Special Meeting in accordance with your instructions. If you sign and return the
proxy card but do not give any instructions on some or all of the proposals, your shares will be
voted by the persons named in the proxy card on all uninstructed proposals in accordance with the
recommendations of the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Proxies solicited hereby may be exercised only at the Special Meeting and any adjournment of the
Special Meeting and will not be used for any other meeting.
</DIV>

<DIV align="left">
<A name="C21565119"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>What vote is required to approve each proposal?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following describes the required vote on each proposal so long as a quorum is present at the
Special Meeting. The votes of holders of at least a majority of the total outstanding shares of
our common stock entitled to vote is required to approve the Amendment and the Reverse Split.
Abstentions and broker non-votes will have the effect of a vote against the Amendment and the
Reverse Split. The holders of at least a majority of the votes present in person or by proxy at
the Special Meeting or adjournment thereof is required to approve each of the Standby Issuance and
the Adjournment. Broker non-votes will have no effect on the outcome of the vote to approve the
Standby Issuance or the Adjournment. Abstentions will have the effect of a vote against the
Standby Issuance and the Adjournment.
</DIV>

<DIV align="left">
<A name="C21565120"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Who pays the cost for soliciting proxies by the Board of Directors?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company will bear the cost of preparing, printing and mailing the materials in connection with
this solicitation of proxies. In addition to mailing these materials, our directors, officers and
regular employees may, without being additionally compensated, solicit proxies personally and by
mail, telephone, facsimile or electronic communication. We have also retained Georgeson, a
specialist in proxy solicitations, to assist us in soliciting proxies at an anticipated cost of
$7,500 plus certain out-of-pocket expenses and, if necessary, telephone solicitation fees.
</DIV>

<DIV align="left">
<A name="C21565121"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Whom should I contact if I have questions?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If you have questions regarding the Special Meeting, the information in this proxy statement or
completion of the proxy card, please contact our proxy solicitor, Georgeson, at 199 Water Street,
26<SUP style="FONT-size: 85%; vertical-align: text-top">th</SUP> Floor, New York, NY 10038, (866)&nbsp;277-0928. Banks and brokerage firms should call
(212)&nbsp;440-9800.
</DIV>

<DIV align="left">
<A name="C21565122"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Am I entitled to appraisal rights?</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">No.&nbsp;The Company&#146;s stockholders do not have dissenters&#146; rights of appraisal with respect to the
proposals to be considered at the Special Meeting under Delaware law.
</DIV>

<DIV align="left">
<A name="C21565123"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Overview. </B>CFBank, the wholly owned banking subsidiary of the Company, is a
community-oriented financial institution serving the borrowing and deposit needs of customers in
its primary market areas of Summit, Franklin and Columbiana Counties in Ohio. In 2003, CFBank
began originating more commercial, commercial real estate and multi-family mortgage loans than in
the past as part of its expansion into business financial services. Primarily as a result of the
recession and its impact on the borrowers of CFBank, which began in 2008, and also as a result of
decisions by prior management, which was replaced by the Board in 2010, the Company lost $9.9
million and $6.9&nbsp;million in 2009 and 2010, respectively. Losses for the six months ended June&nbsp;30,
2011 totaled $3.6&nbsp;million. A significant number of borrowers of CFBank are facing financial
difficulties as a result of the ongoing recession. This has impacted the performance of our
multi-family real estate, commercial real estate and commercial business loans, as tenants are
unable to pay their
rent and local businesses have seen their profits decline and have suffered losses as a result of
slower sales of goods and services. CFBank&#146;s ratio of non-performing assets to total assets went
from 0.13% at December&nbsp;31, 2006 to 5.29% at December&nbsp;31, 2010 before dropping to 3.43% at June&nbsp;30,
2011. While new management has taken numerous steps to resolve CFBank&#146;s high level of
non-performing assets, we and our regulators believe that substantial additional capital is
necessary to ensure the survival of the Company and meet the requirements of the Cease and Desist
Orders described below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Regulatory Enforcement Actions. </B>The OTS has been the primary federal regulator of both the Company
and the Bank. Beginning on July&nbsp;21, 2011, the Board of Governors of the Federal Reserve System
(the &#147;Fed&#148;) became the federal banking regulator of the Company and the Office of the Comptroller
of the Currency (the &#147;OCC&#148;) became the primary federal banking regulator of the Bank. All
references to the &#147;Regulator&#148; are deemed to refer to the OTS regarding the Company and the Bank
before July&nbsp;21, 2011 and to the Fed regarding the Company and the OCC regarding the Bank on and
after July&nbsp;21, 2011.
</DIV>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As a result of the losses and the increase in nonperforming assets in 2009 and 2010 and based on a
regulatory examination of the Company and the Bank in January&nbsp;2011, on May&nbsp;25, 2011, the Company
and the Bank each consented to the terms of the Cease and Desist Orders issued by the Regulator.
The following is a summary of the material terms of the Cease and Desist Orders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company Cease and Desist Order, among other things, provides that:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By June&nbsp;30, 2011, the Company shall submit to the Regulator
a written capital plan (the &#147;Plan&#148;) to enhance the consolidated capital of the Company.
The Plan must cover the period from July&nbsp;1, 2011 through December&nbsp;31, 2013. The Plan
must include: (i)&nbsp;a ratio of tangible capital to tangible assets established by the
Board of Directors commensurate with the Company&#146;s consolidated risk profile; (ii)
specific plans to reduce the risks to the Company from current debt levels and debt
service requirements; (iii)&nbsp;quarterly cash flow projections for the Company on a stand
alone basis that identify both the expected sources and uses of funds; (iv)&nbsp;quarterly
pro forma consolidated and unconsolidated Company balance sheets and income statements
demonstrating the Company&#146;s ability to attain and maintain the minimum tangible equity
capital ratios established by the Board of Directors; (v)&nbsp;detailed scenarios to
stress-test the tangible capital targets; and (vi)&nbsp;detailed descriptions of all relevant
assumptions and projections along with supporting documentation. This Plan has been
submitted as required.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon written notice of non-objection from the Regulator,
the Company must implement and adhere to the Plan.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company must notify the Regulator of any material negative event affecting it
within five days of the event.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By December&nbsp;31, 2011 and each December&nbsp;31 thereafter, the Plan must be updated to
incorporate the Company&#146;s budget and cash flow projections for the next two years.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 45&nbsp;days after the end of each quarter following implementation of the Plan,
the Board of Directors must review written quarterly variance reports from Plan
projections and document this review and any remedial action in the Company&#146;s minutes of
the meeting of the Board of Directors. Each variance report must be provided to the
Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall not declare or pay any cash dividends or
capital distributions on the Company&#146;s stock or repurchase such shares without the prior
written non-objection of the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall not incur, issue, rollover, renew or pay
interest or principal on any debt without the prior written non-objection of the
Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall not enter into, renew, extend or revise
any contractual arrangements related to compensation or benefits with any director or
senior executive officer of the Company without first providing the Regulator prior
written notice.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall not make any &#147;golden parachute payment&#148;
unless the Company complies with 12 C.F.R. Part&nbsp;359.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall comply with the Regulator&#146;s prior
notification requirements for changes in directors and senior executive officers.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Board of Directors must cause to be prepared a
quarterly tracking report to monitor compliance with the Company Cease and Desist Order.
The Board of Directors must certify that each director has reviewed the report and must
document any corrective actions taken. The tracking report and Board of Directors
certification must be submitted to the Regulator.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company Cease and Desist Order will remain in effect until terminated, modified or suspended by
the Regulator.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Bank Cease and Desist Order, among other things, provides that:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No later than September&nbsp;30, 2011, the Bank shall achieve
and maintain a Tier 1 (Core) Capital Ratio of at least 8.0% and a Total Risk-Based
Capital Ratio of at least 12.0%.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By June&nbsp;30, 2011, the Bank shall submit to the Regulator
a written capital and business plan to achieve and maintain the foregoing capital
levels. The Plan must cover the period from July&nbsp;1, 2011 through December&nbsp;31, 2013.
The Plan must: (i)&nbsp;identify the specific sources and methods by which additional
capital will be raised; (ii)&nbsp;detail the Bank&#146;s capital preservation and enhancement
strategies; (iii)&nbsp;contain operating strategies to achieve realistic core earnings;
(iv)&nbsp;include quarterly financial projections; and (v)&nbsp;identify all relevant
assumptions made. This plan has been submitted as required.</TD>
</TR>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


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



</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon written notice of non-objection from the Regulator,
the Bank must implement and adhere to the Plan.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By December&nbsp;31, 2011 and each December&nbsp;31 thereafter, the Plan must be updated to
incorporate the Bank&#146;s budget and profit projections for the next two years.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 45&nbsp;days after the end of each quarter following implementation of the Plan,
the Board of Directors must review written quarterly variance reports from projections
and document this review and any remedial action in the Company&#146;s minutes of the
meeting of the Board of Directors. This review must include documentation of the
internal and external risks affecting the Bank&#146;s ability to successfully implement the
Plan. Each variance report must be provided to the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Bank fails to meet the capital
requirements of the Bank Cease and Desist Order, fails to comply with the Plan or at
the request of the Regulator, the Bank shall prepare and submit a contingency plan to
the Regulator within 15&nbsp;days of such event. The contingency plan must detail actions
to be taken to achieve either a merger or acquisition of the Bank by another
depository institution or a voluntary liquidation of the Bank.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not originate, participate in or acquire any
non-residential real estate loans or commercial loans (together, &#147;Non-homogeneous
Loans&#148;) without the prior written non-objection of the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not release any borrower or guarantor from liability on any
Non-homogeneous Loan without the prior written non-objection of the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By June&nbsp;24, 2011, the Bank must revise its credit administration policies,
procedures, practices and controls to address all corrective actions related to credit
administration noted in the latest Report of Examination by the Regulator. These
revisions have been made.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By August&nbsp;23, 2011, the Bank was required to submit to the Regulator a detailed
written plan with specific strategies, targets and timeframes to reduce the Bank&#146;s
level of problem assets. This plan has been submitted.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By September&nbsp;22, 2011, the Bank must develop individual written specific workout
plans for each adversely classified asset or real estate owned of $500,000 or greater,
and must monitor and document the status of each problem asset and workout plan
quarterly. The Bank must provide the Regulator a copy of each report documenting the
status of the problem asset and workout plans on a quarterly basis.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By July&nbsp;31, 2011, the Board of Directors of the Bank must develop and submit for
Regulator comment a written management succession plan. The Board of Directors of the
Bank has received an extension of this deadline to September&nbsp;30, 2011.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank must submit to the Regulator a weekly written assessment of its current
liquidity position. By June&nbsp;24, 2011, the Bank must revise its liquidity and funds
management policy to address all corrective actions related to liquidity and funds
management noted in the latest Report of Examination by the Regulator. This policy
must include a contingency funding plan. The revised policy was required to be, and
was submitted to the Regulator for comment by June&nbsp;24, 2011. This policy must be
adopted and adhered to once the Bank is notified by the Regulator that the policy is
acceptable. &#091;Status&#093;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By June&nbsp;24, 2011, the Bank must ensure that all violations of law and/or regulation
noted in the latest Report of Examination by the Regulator are corrected and that
adequate policies, procedures and systems are established or revised and implemented
to prevent future violations. All violations have been corrected and policies and
systems have been revised to prevent future violations.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Board of Directors must cause to be prepared a quarterly tracking report to
monitor compliance with the Bank Cease and Desist Order. The Board of Directors must
certify that each director has reviewed the report and must document any corrective
actions taken. The tracking report and Board of Directors certification must be
submitted to the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not increase its total assets during any quarter in excess of an
amount equal to interest credited on deposits during the prior quarter without the
prior written non-objection of the Regulator.</TD>
</TR>

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

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


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



</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not accept, renew or roll over any brokered
deposit without a specific waiver from the Federal Deposit Insurance Corporation
(&#147;FDIC&#148;). &#091;Status&#093;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not declare or pay dividends or make any
other capital distributions without the prior written approval of the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not enter into, renew, extend or revise any
contractual arrangement relating to compensation or benefits for any senior executive
officer or director unless prior written notice is provided to the Regulator.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank must comply with the Regulator&#146;s prior
notification requirements for changes in directors and senior executive officers.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not make any &#147;golden parachute payments&#148;
unless the Bank has complied with 12 C.F.R. Part&nbsp;359.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Bank may not enter into any arrangement or contract with a third party service
provider that is significant to the overall operation or financial condition of the
Bank or outside the normal course of business, without the written non-objection of
the Regulator.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Bank Cease and Desist Order will remain in effect until terminated, modified or suspended by
the Regulator. Copies of the stipulations and the Cease and Desist Orders are included as Exhibits
10.1 and 10.2 to the Company&#146;s Current Report on Form 8-K filed with the Securities and Exchange
Commission (the &#147;SEC&#148;) on May&nbsp;27, 2011, which Form 8-K is incorporated herein by reference. The
descriptions of the Cease and Desist Orders set forth herein do not purport to be complete, and are
qualified by reference to the full text of the Cease and Desist Orders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company and the Bank have taken such actions as the Company believes are necessary to comply
with the provisions of the Cease and Desist Orders which are currently effective and are continuing
to work toward compliance with the provisions of the Cease and Desist Orders having future
compliance dates. Any material failure by the Company and the Bank to comply with the provisions
of the Cease and Desist Orders could result in further enforcement actions by the Regulator. While
the Company and the Bank intend to take such actions as may be necessary to comply with the
requirements of the Cease and Desist Orders, there can be no assurance that the Company or the Bank
will be able to comply fully with the Cease and Desist Orders, or that efforts to comply with the
Cease and Desist Orders will not have adverse effects on the operations and financial condition of
the Company or the Bank.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Capital Raising Efforts. </B>In August, 2010, new management of the Company retained ParaCap Group,
LLC (&#147;ParaCap&#148;) to advise the Company on its strategic alternatives in dealing with the significant
levels of non-performing assets and resultant operating losses. In meetings with the Board of
Directors and senior management during August and September of 2010 and February of 2011, ParaCap
discussed the Company&#146;s business plan and various alternatives available to the Company, including
(i)&nbsp;remaining independent with no additional capital being raised; (ii)&nbsp;identifying an investment
group to serve as standby purchasers in a rights
offering to existing stockholders; (iii)&nbsp;raising additional capital in an underwritten or best
efforts public offering; (iv)&nbsp;identifying an investment group to purchase a controlling interest in
the Company; and (v)&nbsp;identifying a strong merger partner for the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">ParaCap, from August, 2010, through January, 2011, sought out potential interested participants for
all of the transactions outlined above. ParaCap advised the Company that, in its judgment, the
Company was not in a position to successfully complete an underwritten public offering given its
financial condition, high level of non-performing assets and the existing capital market conditions
for small financial institutions in Ohio. ParaCap and the Company also concluded that doing
nothing was not a viable option, given the ongoing losses of the Company. ParaCap was not able to
identify any other financial institution that was interested in a merger with or acquisition of the
Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">ParaCap did identify a number of investors potentially interested in participating in a
recapitalization of the Company in conjunction with a rights offering to existing stockholders.
Three groups of investors conducted due diligence and two groups made proposals.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The first proposal, received in August, 2010, came from a group of local investors who offered to
serve as standby purchasers for $5.0&nbsp;million of a total offering to existing stockholders of
$12.0-20.0&nbsp;million, at $0.50 to $1.00 per share. This proposal also required, among other things,
that the Company: (i)&nbsp;hire an affiliate of this group to assist in resolving non-performing loans
prior to completion of an offering; (ii)&nbsp;hire a member of this group to supervise management and
advise the Board of Directors regarding the development of a turnaround business plan and to
oversee the turnaround of the Company prior to completion of an offering; (iii)&nbsp;provide this group
with three board seats; (iv)&nbsp;issue to this group warrants exercisable for five years to purchase
additional shares of common stock, at the offering price, in an amount equal to 10% of the total
new shares sold in the rights offering; and (v)&nbsp;issue the warrants described above to this group in
the event the Company received and accepted an unsolicited offer to purchase the Company.
</DIV>

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

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The second proposal came from the Standby Purchasers and is more fully described below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In November, 2010, we also received an unsolicited proposal to sell the Franklin County branch
office, along with its associated assets and liabilities, to another financial institution. The
purchase price was proposed to include the purchase of the real estate at book value and the
payment of a 1.5% premium on only the demand deposits associated with that branch office. During
negotiations regarding that proposal, the buyer modified the purchase price of the real estate to
an amount less than its book value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">After careful consideration of the proposals received, consultation with ParaCap and the Company&#146;s
legal counsel, the Board of Directors determined that the Standby Purchasers&#146; proposal was in the
best interest of stockholders. After due diligence by the Standby Purchasers, as well as
consultation with the Regulator regarding the Standby Purchase Agreements, the Company and the
Standby Purchasers executed the Standby Purchase Agreements as of August&nbsp;8, 2011<B>.</B>
</DIV>

<DIV align="left">
<A name="C21565124"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Summary of Standby Purchase Agreements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Set forth below is a summary of the Recapitalization and the terms of the Standby Purchase
Agreements. The form of the Standby Purchase Agreements is attached to this proxy statement and is
incorporated herein by reference.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company intends to offer non-transferable rights to its stockholders to subscribe for and
purchase additional shares of common stock for $1.00 per share in the rights offering and to offer
any unsubscribed for shares to the general public at the same price per share. The Company has
also agreed to sell to the Standby Purchasers 5.0&nbsp;million shares of common stock at $1.00 per share
pursuant to the terms of the Standby Purchase Agreements. All purchasers of common stock in the
Offering, including the Standby Purchasers, will receive, without additional charge, one warrant to
purchase one additional share of common stock, at a purchase price of $1.00 per share, for each
four shares of common stock purchased (the &#147;Warrant&#148;). The Warrant will be exercisable for three
years and will be non-transferable. No fractional Warrants will be issued and the number of
Warrants issued will be rounded down to the nearest whole Warrant. By way of example, a purchaser
purchasing four shares of common stock will receive one Warrant and a purchaser purchasing seven
shares of common stock will receive one Warrant, while a purchaser purchasing eight shares of
common stock will receive two Warrants. The Standby Purchasers&#146; agreement to purchase, and the
Company&#146;s agreement to issue and sell, the 5.0&nbsp;million shares of common stock is subject to a
number of conditions, including the following:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company&#146;s stockholders must approve the Amendment and
the Standby Issuance;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Fed must approve the holding company or Change in
Control Act application of those members of the Standby Purchasers who will become
directors of the Company, without the imposition of any restriction or condition which
such persons determine, in their reasonable discretion, is unduly burdensome;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the representations and warranties of the Company contained
in the Standby Purchase Agreements must be true and the Company must perform its
obligations under the Standby Purchase Agreements;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the representations and warranties of the Standby
Purchasers contained in the Standby Purchase Agreements must be true and the Standby
Purchasers must perform their obligations under the Standby Purchase Agreements;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>trading in the Company&#146;s common stock shall not have been suspended by the SEC or
Nasdaq or trading in securities generally on Nasdaq shall not have been suspended or
limited;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all required regulatory approvals for the sale of the
Company&#146;s common stock in the Offering have been received with conditions reasonably
satisfactory to those members of the Standby Purchasers who will become directors of the
Company;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no material adverse effect shall have occurred with
respect to the Company since the execution of the Standby Purchase Agreements;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company shall have taken all requisite corporate action
to increase the size of the Company&#146;s Board of Directors to 10 seats effective
immediately following the closing of the Offering, and five representatives of the
Standby Purchasers shall have been appointed to the Board of Directors of the Company to
serve for initial terms and the Company shall have agreed to nominate these five persons
to serve at least one additional full three year term;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company shall have elected Robert E. Hoeweler (who is one of the Standby
Purchasers) as the Chairman of the Board and Timothy O&#146;Dell and Thad Perry (who are also
Standby Purchasers) as Chief Executive Officer and President of the Company,
respectively;</TD>
</TR>

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

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

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<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


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



</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the aggregate Tier 1 Capital of the Bank as defined by applicable regulations must be
8% or greater following completion of the Offering and any redemption of the Series&nbsp;A
Preferred Shares;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company shall have received aggregate net proceeds of at least $16.5&nbsp;million from
the Offering, excluding proceeds from the Standby Purchasers, less any discount to the
stated redemption price of the Series&nbsp;A Preferred Shares agreed to by the Treasury;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the OCC shall have modified the Bank Cease and Desist Order to eliminate the
following provisions: (i)&nbsp;paragraph 9 regarding the submission of a contingency plan;
paragraph 12 prohibiting non-homogeneous lending; paragraph 14 limiting the Bank&#146;s
ability to release borrowers and guarantors from liability on loans; paragraph 21
concerning a management succession plan; paragraph 33 limiting asset growth; paragraph
24(b) regarding the maintenance of sufficient short-term liquidity; paragraph 38
limiting the Bank&#146;s ability to accept brokered deposits; and paragraph 39 limiting
capital distributions by the Bank;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Fed shall have modified the Company Cease and Desist Order to eliminate the
following provisions: (i)&nbsp;paragraph 8 limiting capital distributions by the Company and
(ii)&nbsp;paragraph 9 limiting the Company&#146;s ability to incur new debt or make changes in or
payments on existing debt;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subject to the approval of applicable banking regulators, the payment of $90,000
shall have been made to Mr.&nbsp;O&#146;Dell, on behalf of himself, Mr.&nbsp;Perry and Mr.&nbsp;Hoeweler, in
consideration of their efforts in connection with the negotiation of the Standby
Purchase Agreements;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the entry by each of the five Standby Purchasers who will become directors of the
Company into six month agreements not to sell the shares of common stock of the Company
they purchase pursuant to the Standby Purchase Agreements;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the authorization for listing on the Nasdaq of all of the shares of the Company&#146;s common stock issuable pursuant to the Offering, as well as the shares of common stock issuable pursuant to the exercise of the Warrants.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Mr.&nbsp;O&#146;Dell, on behalf of the Standby Purchasers, may waive any of the foregoing conditions to the
obligations of the Standby Purchasers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Standby Purchase Agreements contain covenants of the Company to operate in the ordinary course
of business, consistent with the limitations imposed by the Cease and Desist Orders, and the
Company has agreed to use its best efforts obtain the written agreement of the Treasury to redeem
the Series&nbsp;A Preferred Shares at a discount to the stated redemption price. In discussions with
Treasury, the Company&#146;s proposal to redeem the Series&nbsp;A Preferred Shares at a discount has been
rejected under the terms of the
Recapitalization. Unless the Treasury changes its view or unless the Company raises aggregate
gross proceeds from the Offering close to the maximum of the range, the Company does not intend to
redeem the Series&nbsp;A Preferred Shares at this time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company has also agreed not to enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the standby purchasers unless the Company
receives a Superior Proposal prior to stockholder approval of the Standby Issuance. If the Company
receives an unsolicited, written bona fide proposal that the Company&#146;s Board of Directors
determines, in its good faith judgment (after consultation with the Company&#146;s outside legal counsel
and investment bankers): (i)&nbsp;to be more favorable from a financial point of view to the
stockholders than the transactions contemplated by the Standby Purchase Agreements; (ii)&nbsp;to be
reasonably likely to be completed; and (iii)&nbsp;that the Company&#146;s Board of Directors, after
consultation with its legal counsel, determines in good faith that it must accept to comply with
its fiduciary duties (a &#147;Superior Proposal&#148;), the Company may take any action necessary to fulfill
its fiduciary responsibilities under applicable law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Standby Purchase Agreements contain certain termination rights for the Company and the standby
purchasers, as the case may be, which may be triggered:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Standby Purchasers in the event of a material adverse effect on the Company or
a trading halt in the Company&#146;s common stock or a general suspension of trading in
securities on Nasdaq which is not promptly cured;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Standby Purchasers if any condition to closing cannot be satisfied or the
Standby Purchasers reasonably believe that any condition cannot be satisfied;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Standby Purchasers if any purchaser in the Offering, including any associates
or group acting in concert, but excluding any Standby Purchaser approved by Mr.&nbsp;O&#146;Dell,
would own more than 9.9% (or, as to MacNealy Hoover Investment Management Inc., 15%) of
the Company&#146;s outstanding common stock immediately following completion of the Offering;</TD>
</TR>

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

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">


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



</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Standby Purchasers on the one hand, or the Company on the other hand, if there
is a material breach of the Standby Purchase Agreements by the other party that is not
promptly cured;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Standby Purchasers on the one hand, or the Company on the other hand, if the
consummation of the transactions contemplated by the Standby Purchase Agreements has not
taken place by January&nbsp;31, 2012 through no fault of the terminating party;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Standby Purchasers on the one hand, or the Company on the other hand, if
consummation of the Standby Issuance is prohibited by law, rule or regulation;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Company in the event it determines that it is not in the best interests of the
Company and its stockholders to complete the Offering;</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the Company, prior to stockholder approval of the Standby Issuance, in the event
it receives a Superior Proposal and the failure to terminate the Standby Purchase
Agreements would be reasonably likely to cause the Company&#146;s Board of Directors to
violate its fiduciary duties under applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event the Company terminates the Standby Purchase Agreements following receipt of a Superior
Proposal, it must pay to Mr.&nbsp;O&#146;Dell, on behalf of all Standby Purchasers approved by Mr.&nbsp;O&#146;Dell,
$150,000 within three days of termination. The Standby Purchase Agreements further provide that if
the Standby Purchase Agreements are terminated for any of the other reasons permitted in the
Standby Purchase Agreements except: (i)&nbsp;breach by the Standby Purchasers; (ii)&nbsp;suspension in
trading of the Company&#146;s securities on Nasdaq or trading in securities generally; or (iii)&nbsp;failure
of the Standby Purchasers who will become directors of the Company to execute a lock-up agreement,
the Company must pay up to $80,000 to Mr.&nbsp;O&#146;Dell (on behalf of all Standby Purchasers approved by
Mr.&nbsp;O&#146;Dell) for reimbursement of actual fees, costs and legal expenses incurred by the Standby
Purchasers.
</DIV>

<DIV align="left">
<A name="C21565125"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company intends to offer a minimum of 22.5&nbsp;million shares and a maximum of 30&nbsp;million shares of
common stock in a public offering and the concurrent Standby Issuance. In the public offering,
priority subscription rights will be given to the Company&#146;s stockholders (the &#147;Rights Offering&#148;).
Concurrently with the Rights Offering, the Company has agreed to issue and sell 5.0&nbsp;million shares
of common stock, at a purchase price of $1.00 per share, in a Standby Issuance to the Standby
Purchasers pursuant to the Standby Purchase Agreements described above, which is an amount in
excess of 20% of the Company&#146;s currently outstanding shares of common stock. The Company
anticipates that the gross proceeds it will seek from the sale of shares in the Offering will
aggregate between $22.5&nbsp;million and $30&nbsp;million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This proxy statement is not an offer to sell or the solicitation of an offer to buy shares of our
common stock or any other securities, including the rights or any shares of common stock issuable
upon exercise of the rights. Offers and sales of common stock and common stock issuable upon
exercise of the rights will only be made by means of a prospectus meeting the requirements of the
Securities Act of 1933, as amended, and applicable state securities laws, on the terms and subject
to the conditions set forth in such prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The execution of the Standby Purchase Agreements, stockholder approval of the Amendment, the
Standby Issuance, the Reverse Split and the completion of the Offering constitute the Company&#146;s
Recapitalization. In furtherance of this Recapitalization, the Company is asking stockholders at
the special meeting to approve the sale of shares of common stock in the Standby Issuance in an
amount in excess of 20% of the Company&#146;s currently outstanding shares of common stock, as required
under Nasdaq rules. In addition, in order to complete the Offering resulting in net proceeds to the
Company of at least $16.5&nbsp;million (excluding the Standby Purchasers&#146; $5.0&nbsp;million), and to provide
additional authorized shares of common stock to meet future needs, it is necessary to increase the
number of shares of common stock that the Company is authorized to issue as set forth in Proposal
1. These matters to be voted on at this special meeting are <B><I>critical </I></B>components of the Company&#146;s
Recapitalization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company believes that the issuance and sale of common stock in the Offering will constitute
substantial progress in addressing the most significant concerns raised by the Regulator, although
the Regulator has offered no assurance that the consummation of these transactions will be
sufficient to address their concerns.
</DIV>

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565126"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>The Reverse Split</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The primary purpose of the Reverse Split is to increase the likelihood that the Company can remain
eligible to have its common stock listed on Nasdaq. Nasdaq requires that companies maintain a bid
price for their common stock of $1.00 or greater. The bid price for the Company&#146;s common stock has
fallen below this minimum in the past, but to this point we have been able to maintain our listing
on Nasdaq. On July&nbsp;13, 2011 the Company received notice from Nasdaq that it does not comply with
the minimum bid price requirement for continued listing on Nasdaq. The Company has until January
9, 2012 to regain compliance with this requirement. The proposed Reverse Split is intended to
raise the bid price of the Company&#146;s common stock to a level well above the $1.00 per share
minimum.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Due to the benefits that will result from the Amendment, the Standby Issuance and the Reverse
Split, and the adverse consequences the Company will face if these transactions are not completed,
<B>the Board recommends that the stockholders vote FOR Proposals 1, 2 and 3.</B>
</DIV>

<DIV align="left">
<A name="C21565127"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Risk Factors &#151; Risks Relating to Proposals 1 and 2</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>If Proposals 1 and/or 2 are not approved, either the Amendment or the Standby Issuance, or both,
will not be completed and the Company would not be able to complete an offering of a sufficient
number of shares to enable it to meet the Regulator&#146;s capital requirements for the Bank. As a
result, the Regulator would likely take further action against the Company and the Bank. Any such
actions could have a material negative effect on the Company&#146;s business and the value of its common
stock.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As discussed above, the Bank has been directed by the Regulator to raise its Tier 1 core capital
and total risk-based capital ratios to 8.0% and 12.0%, respectively, by September&nbsp;30, 2011. In an
effort to address the concerns identified by the Company and the Regulator, the Company has
formulated this Recapitalization plan. The Company believes completion of the Recapitalization will
contribute materially to addressing the issues raised by the Regulator, although the Regulator has
offered no assurance that these transactions will be sufficient to satisfy its concerns.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If Proposal 1 is approved but Proposal 2 is not approved, the Company will increase its authorized
but unissued shares of common stock available for future issuance but will not be able to complete
the Offering. The Company will continue its efforts to raise additional capital to satisfy the
Regulator&#146;s requirements but there can be no assurances that these efforts will be successful. The
Company has no alternative plans to raise additional capital if the Offering is not successful.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If Proposal 1 and Proposal 2 are not approved, neither the Amendment nor the Standby Issuance will
be completed. In either case, the Company is likely to face negative regulatory consequences from
the Regulator. Such regulatory consequences could include a requirement that the Bank seek a merger
partner or a voluntary liquidation. Such action by the Regulator could have a material negative
effect on the Company&#146;s business and financial condition and the value of its common stock.
</DIV>

<DIV align="left">
<A name="C21565128"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Stockholders Will Face Significant Dilution as a Result of the Offering.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If Proposals 1 and 2 are approved and the Offering is completed, the Company could issue up to 30.0
million additional shares of common stock. Assuming 25.0&nbsp;million shares are issued in the Rights
Offering to existing stockholders and 5.0&nbsp;million shares are issued to the Standby Purchasers in
the Standby Issuance, common stockholders would have their ownership diluted from 100%
currently to 85.3% following the Offering. Assuming no shares are issued in the Rights Offering to
existing stockholders, 25.0&nbsp;million shares are issued in the Public Offering and 5.0&nbsp;million shares
are issued to the Standby Purchasers in the Standby Issuance, common stockholders would have their
ownership diluted from 100% currently to &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;% following the Offering.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As a result, if the Offering is completed, the Company&#146;s existing stockholders will incur
substantial dilution of their voting interests and the book value per share of common stock and
will own a significantly smaller percentage of the Company&#146;s outstanding common stock. The dilutive
effect of the Offering may have an adverse impact on the market price of the Company&#146;s common
stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>The Company could, as a result of the Offering, or future investments in our common stock by
holders of 5% or more of our common stock, experience an &#147;ownership change&#148; for tax purposes that
could cause the Company to permanently lose a significant portion, and/or reduce the annual amount
that can be recognized to offset future income, of its net operating loss carry-forwards.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Even if these transactions do not cause the Company to experience an &#147;ownership change,&#148; these
transactions materially increase the risk that the Company could experience an &#147;ownership change&#148;
in the future. As a result, issuances or sales of common stock or other securities in the future
(including common stock issued in the Standby Issuance), or certain other direct or indirect
changes in ownership, could result in an &#147;ownership change&#148; under Section&nbsp;382 of the Internal
Revenue Code of 1986, as amended (the &#147;Code&#148;). In the event an &#147;ownership change&#148; were to occur,
the Company could realize a permanent loss, and/or a reduction of the annual amount that can be
recognized to offset future income, of a significant portion of its net operating loss
carry-forwards.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company has established a valuation allowance against its U.S. federal deferred tax assets as
of December&nbsp;31, 2009, as the Company believed, based on its analysis as of that date, that it was
not more likely than not that all of these assets would be realized. Section&nbsp;382 of the Code
imposes restrictions on the use of a corporation&#146;s net operating losses, certain recognized
built-in losses and other carryovers after an &#147;ownership change&#148; occurs. An &#147;ownership change&#148; is
generally a greater than 50&nbsp;percentage point increase by certain &#147;5% stockholders&#148; during the
testing period, which is generally the three year-period ending on the transaction date. Upon an
&#147;ownership change,&#148; a corporation generally is subject to an annual limitation on its pre-change
losses and certain recognized built-in losses equal to the value of the corporation&#146;s market
capitalization immediately before the &#147;ownership change&#148; multiplied by the long-term tax-exempt
rate (subject to certain adjustments). The annual limitation is increased each year to the extent
that there is an unused limitation in a prior year. Since U.S. federal net operating losses
generally may be carried forward for up to 20&nbsp;years, the annual limitation also effectively
provides a cap on the cumulative amount of pre-change losses and certain recognized built-in losses
that may be utilized. Pre-change losses and certain recognized built-in losses in excess of the cap
are effectively lost.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The relevant calculations under Section&nbsp;382 of the Code are technical and highly complex. The
Standby Issuance, combined with other ownership changes in recent years, could cause the Company to
experience an &#147;ownership change.&#148; As of December&nbsp;31, 2010, the Company had no net deferred tax
asset reflected on its balance sheet. In the event an &#147;ownership change&#148; does not occur, the
Company could have available up to $13.2&nbsp;million (as of December&nbsp;31, 2010) in net operating loss
carry-forwards which could be used to reduce taxes due on future income.
</DIV>

<DIV align="left">
<A name="C21565129"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL 1 &#151; THE AMENDMENT</B>
</DIV>

<DIV align="left">
<A name="C21565130"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company currently is authorized to issue 12&nbsp;million shares of common stock. The Company&#146;s Board
of Directors recommends that stockholders approve an amendment (the &#147;Amendment&#148;) to Article&nbsp;Fourth
of the Company&#146;s Certificate of Incorporation that would increase the authorized shares of common
stock from 12&nbsp;million shares to 50&nbsp;million shares. The number of authorized shares of preferred
stock will remain at 1&nbsp;million shares. If the Amendment is approved by the Company&#146;s stockholders,
subparagraph A.2. of Article&nbsp;Fourth of the Certificate of Incorporation will read as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">50&nbsp;million shares of Common Stock, par value one cent ($.01) per share (the &#147;Common Stock&#148;)
</DIV>
<DIV align="left">
<A name="C21565131"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Reasons for Request for Stockholder Approval</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of June&nbsp;30, 2011, there were 4,127,798 shares of common stock outstanding. An additional
1,711,506 shares were reserved for issuance pursuant to equity compensation plans of the Company
and for issuance upon the exercise of the warrants granted to the Treasury in conjunction with the
Treasury&#146;s purchase of the Series&nbsp;A Preferred Shares from the Company under the TARP program. The
Company needs to increase the number of shares of common stock it is authorized to issue in order
to complete the Recapitalization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In addition to receiving authorization for the issuance of common stock in the Offering, the Board
of Directors wishes to have available for issuance a number of authorized shares of common stock
that will be adequate to provide for future stock issuances to meet future capital needs. The
additional authorized shares would be available for issuance from time to time at the discretion of
the Board of Directors, without further stockholder action except as may be required for a
particular transaction by law, the regulations of Nasdaq or other agreements and restrictions. The
shares would be issuable for any proper corporate purpose, including future acquisitions,
capital-raising transactions consisting of equity or convertible debt, stock splits, stock
dividends or issuances under current and future stock plans. The Board of Directors believes that
these additional shares will provide the Company with needed flexibility to issue shares in the
future without the potential expense and delay incident to obtaining stockholder approval for a
particular issuance.
</DIV>

<DIV align="left">
<A name="C21565132"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Consequences if the Increase in Authorized Shares is Not Approved by the Stockholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If the stockholders do not approve the increase in the number of shares of common stock authorized
for issuance under our Certificate of Incorporation, we will not be able to complete the Offering
or the Recapitalization, and it is unlikely that we will be able to raise sufficient capital as
required by the Bank Cease and Desist Order. In such event, the Bank Cease and Desist Order could
require us to enter into a definitive merger agreement with a merger partner, and there is no
assurance that we would be successful in finding a merger partner or that any such merger would be
on terms acceptable to stockholders. In such event, the Regulator may take steps to require the
Bank to liquidate or direct it to merge with another financial institution regardless of the
consideration to stockholders. Further, the Regulator could place the Bank into receivership with
the FDIC. In addition, in the short term, we may be required to seek alternative sources of capital
and liquidity to satisfy our ongoing operations and we may not be able to obtain such alternative
sources of capital and liquidity on commercially reasonable terms, if at all. If we were unable to
generate additional capital and liquidity it would have an adverse impact on our financial
condition and would adversely affect the price of our common stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If approved, the increase in authorized common stock will provide sufficient authorized shares to
allow the Company to complete the Offering and the Recapitalization. It would also give the Company
the ability to issue shares for other general corporate purposes. As a result of the Offering, the
Company&#146;s existing stockholders will incur substantial dilution to their voting interests and will
own a smaller percentage of the Company&#146;s outstanding common stock. The dilutive effect of the
Offering may have an adverse impact on the market price of the Company&#146;s common stock. Additional
issuances of common stock in the future could further dilute the interests of existing
stockholders.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Except as described in this proxy statement, the Company has no current plans to issue shares in a
merger, consolidation, acquisition or similar transaction. Approval of the Amendment would in
certain circumstances permit such actions to be taken without the delays and expense associated
with obtaining stockholder approval at that time, except to the extent required by applicable state
law or stock exchange listing requirements for the particular transaction. Although the
availability of additional shares of common stock provides flexibility in carrying out corporate
purposes, the increase in the number of shares of authorized common stock could make it more
difficult for a third party to acquire a majority of the Company&#146;s outstanding voting stock and
could also result in the issuance of a significant number of shares to one or more investors in
transactions that may not require stockholder approval. For more information regarding dilution to
stockholders, see &#147;Risk Factors &#151;&#151; Risks relating to Proposals 1 and 2 &#151;&#151; Stockholders will
face significant dilution as a result of the Offering.&#148;
</DIV>

<DIV align="left">
<A name="C21565133"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>The Board of Directors believes that the Amendment is in the best interests of the stockholders of
the Company. The Board of Directors recommends that stockholders vote &#147;FOR&#148; the proposal to amend
the Company&#146;s Certificate of Incorporation to increase the Company&#146;s authorized shares of common
stock.</B>
</DIV>

<DIV align="left">
<A name="C21565134"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL 2 &#151; THE STANDBY ISSUANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are seeking stockholder approval to permit us to issue and sell a number of shares of common
stock equal to more than 20% of our outstanding shares of common stock in the Standby Issuance.
Promptly following stockholder approval of Proposals 1 and 2, we intend to commence the Rights
Offering of shares of common stock and the Standby Issuance of common stock to the Standby
Purchasers pursuant to the Standby Purchase Agreements. In the offering to the Standby Purchasers,
we propose to sell 5.0&nbsp;million shares of our common stock, at a price of $1.00 per share, the same
price as shares will be sold to all persons in the Offering. If the Offering closes, the gross
proceeds from the sales to the Standby Purchasers would be $5.0&nbsp;million. All purchasers of common
stock in the Offering, including the Standby Purchasers, will receive, without additional charge,
one Warrant to purchase one additional share of common stock, at a purchase price of $1.00 per
share, for each four shares of common stock purchased.
</DIV>

<DIV align="left">
<A name="C21565135"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As described above under &#147;Background to the Proposals &#151; Regulatory Enforcement Actions&#148; the Bank
has been directed by the Regulator to raise its Tier 1 core capital and total risk-based capital
ratios to 8% and 12%, respectively, by September&nbsp;30, 2011. As a
result of this requirement, the Bank may not be deemed to be &#147;well-capitalized&#148; under applicable
regulations<B>. </B>The Bank Cease and Desist Order also provides that if the Bank fails to meet this
requirement at any time after September&nbsp;30, 2011, within 15&nbsp;days thereafter it must prepare a
written contingency plan detailing actions to be taken, with specific time frames, providing for
(i)&nbsp;a merger with another federally insured depository institution or holding company thereof, or
(ii)&nbsp;voluntary liquidation. We expect to engage in the Offering in order to raise equity capital
to improve the Bank&#146;s capital position and satisfy this requirement of the Bank Cease and Desist
Order and to retain additional capital at the Company for general corporate purposes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In connection with the Standby Issuance, we will issue and sell 5.0&nbsp;million shares of our common
stock to the Standby Purchasers at a purchase price of $1.00 per share. The issuance of shares of
common stock to the Standby Purchasers requires stockholder approval as the number of shares of
common stock to be issued to the Standby Purchasers exceeds 20% of the Company&#146;s common stock
outstanding prior to such transaction.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Board of Directors intends to raise capital through the Rights Offering to give our current
stockholders the opportunity to limit ownership dilution from the Standby Issuance to the Standby
Purchasers by allowing our current stockholders to buy additional shares of common stock. However,
due to current market conditions, individual investment decisions of our stockholders and other
factors, there is no guarantee that a rights offering to existing stockholders will raise
sufficient capital to meet the capital targets established by the Regulator. As a result, the Board
of Directors expects to conduct a concurrent offering of common stock to the public to attempt to
ensure that we will raise sufficient capital in the Offering.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565136"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>The Rights Offering</I></B>. We intend to distribute to the record holders of our common stock
non-transferable subscription rights to subscribe for and purchase shares of our common stock,
subject to approval of the Amendment and the Standby Issuance as described in this proxy statement.
Depending on the number of shares subscribed for in the Rights Offering, we may also offer shares
to the public in a concurrent public offering. All purchasers of common stock in the Offering will
receive, without charge, one warrant to purchase one additional share of common stock, at a
purchase price of $1.00 per share, for each four shares of common stock purchased. This proxy
statement is not an offer to sell or the solicitation of an offer to buy shares of our common stock
or any other securities, including the rights or any shares of common stock issuable upon exercise
of the rights. Offers and sales of common stock issuable upon exercise of the rights will only be
made by means of a prospectus meeting the requirements of the Securities Act of 1933 and applicable
state securities laws, on the terms and subject to the conditions set forth in such prospectus. In
connection with the Rights Offering, we &#091;have filed&#093; a registration statement with the Securities
and Exchange Commission and the registration statement has not yet been declared effective.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>The Standby Issuance</I></B>. We have entered into Standby Purchase Agreements with the Standby Purchasers,
pursuant to which we have agreed to sell and the Standby Purchasers have agreed to purchase from
us, newly issued shares of our common stock on a standby basis in connection with the Standby
Issuance. We have agreed to issue and sell 5.0&nbsp;million shares of our common stock to the Standby
Purchasers. The Standby Purchasers&#146; commitments are subject to certain conditions as set forth in
the Standby Purchase Agreements, including stockholder approval of the Amendment and the Standby
Issuance. The price per share paid by the Standby Purchasers for such common stock will be $1.00
per share, which is the price to be paid by our stockholders in the Rights Offering and by the
public in the public portion of the Offering. In the event of an over-subscription for shares in
the Rights Offering, the Standby Purchasers will be entitled to purchase the full 5.0&nbsp;million
shares and orders in the Rights Offering will be cut back as will be more fully described in the
prospectus for the Rights Offering.
</DIV>

<DIV align="left">
<A name="C21565137"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Principal Effects on Outstanding Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The issuance of shares to the Standby Purchasers will have no effect on the current rights of
holders of our common stock under Delaware law, including without limitation, voting rights, rights
to dividend payments and rights upon liquidation. Other than pursuant to the stock subscription
rights to be distributed to our stockholders pursuant to the Rights Offering, holders of our shares
of common stock are not entitled to preemptive rights with respect to any shares that may be
issued. Under Delaware law, our stockholders are not entitled to dissenter&#146;s rights or appraisal
rights with respect to the Standby Issuance and we will not independently provide our stockholders
with any such rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The issuance of shares of our common stock in the Offering would dilute, and thereby reduce, each
existing stockholder&#146;s proportionate ownership interest in our shares of common stock (other than
stockholders who purchase sufficient shares of our common stock in the Rights Offering to maintain
their proportionate ownership interest). The issuance of such shares at less than the then-existing
market price would likely reduce the price per share of shares held by existing stockholders. The
issuance of such shares at less than the then-existing book value per share would dilute the book
value per share of the common stock held by each existing stockholder. It is possible that some of
the shares we sell in the Offering will be to one or more stockholders such that each of those
stockholders individually or as part of a group acting in concert, could acquire over 5% of our
common stock. This would concentrate voting power in the hands of a few stockholders who could
exercise greater influence on our operations or the outcome of matters put to a vote of
stockholders. One existing stockholder currently holds in excess of 10% of our outstanding common
stock and three
existing stockholders currently hold in excess of 5% of our outstanding common stock. See
&#147;Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management and Related
Stockholder Matters<B>.</B>&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Although we cannot determine what the actual net proceeds will be from the sale of the shares of
common stock in the Offering until the Offering is completed, we estimate that the aggregate gross
proceeds from the Offering will be between $22.5&nbsp;million and $30&nbsp;million. We intend to use the
proceeds of the Offering to invest in the Bank to improve its regulatory capital position, comply
with the capital requirements of the Bank Cease and Desist Order and for general corporate
purposes. Any remaining proceeds not invested in the Bank will be retained by the Company for
general corporate purposes. If we raise aggregate gross proceeds from the Offering close to the
maximum of the range, we may consider redeeming a portion of the Series&nbsp;A Preferred Shares.
</DIV>

<DIV align="left">
<A name="C21565138"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Reasons for Requesting Stockholder Approval</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under Nasdaq rules, we are required to obtain approval from our stockholders in order to sell or
issue shares of our common stock in a non-public offering in an amount equal to 20% or more of the
current outstanding shares of our common stock for a price less than the greater of book or market
value of such shares of common stock. We are not required to seek stockholder approval of the
Rights Offering to our existing stockholders. However, because we have agreed to sell a number of
shares equal to more than 20% of our current outstanding shares of common stock in the Standby
Issuance to the Standby Purchasers at a price that is less than the greater of the book or current
market value of such shares, we are seeking stockholder approval before completing the sale to the
Standby Purchasers.
</DIV>

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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Stockholder approval of this proposal does not require us to conduct a sale of shares to existing
stockholders or any other persons. Accordingly, if stockholders approve this proposal, we may sell
shares of our common stock in any manner that we choose without receiving further stockholder
approval, subject to the limitations set forth above (including the maximum number of shares to be
sold, the price at which shares will be sold and other restrictions imposed by Nasdaq listing
requirements). Similarly, because we are not requesting stockholder approval of the Rights
Offering to existing stockholders, we may conduct a rights offering to our existing stockholders
even if we do not receive stockholder approval of this Proposal 2.
</DIV>

<DIV align="left">
<A name="C21565139"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Consequences if this Proposal is Not Approved by the Stockholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If the stockholders do not approve the sale of a number of shares equal to more than 20% of our
outstanding shares of common stock in the Standby Issuance, it is unlikely that we will be able to
raise sufficient capital to meet the levels directed by the Regulator in the Bank Cease and Desist
Order. In such event, the Company and the Bank could become subject to adverse regulatory
consequences, which could include a requirement that the Bank seek a merger partner or a voluntary
liquidation. Such action by the Regulator could have a negative effect on the Company&#146;s business
and financial condition and the value of its common stock. The Company and the Bank could also
become subject to other supervisory actions by the Regulator if we are unable to achieve compliance
with the requirements of the Bank Cease and Desist Order and the Company Cease and Desist Order or
if market conditions were to deteriorate to such an extent that the equity capital the Company
raised in the Offering proved to be insufficient for our needs. See &#147;Background to the Proposals &#151;
Risk Factors &#151; Risks Relating to Proposals 1 and 2.&#148;
</DIV>

<DIV align="left">
<A name="C21565140"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>The Board of Directors believes that the Standby Issuance is in the best interest of the
stockholders of the Company. The Board of Directors recommends a vote &#147;FOR&#148; the proposal to allow
the sale to the Standby Purchasers of a number of shares of common stock equal to more than 20% of
the Company&#146;s outstanding shares of common stock pursuant to the Standby Purchase Agreements.</B>
</DIV>

<DIV align="left">
<A name="C21565141"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL 3 &#151; THE REVERSE SPLIT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Our Board of Directors proposes to amend our Certificate of Incorporation to affect the
Reverse Split. The specific ratio for the Reverse Split will range from 1-for-2 to 1-for-5, as
selected by the Board of Directors following stockholder approval of the Reverse Split. If this
proposal is approved, the Board of Directors may, in its discretion, implement a Reverse Split
using any one of the ratios included in this proposal. The Board of Directors may also determine in
its discretion not to proceed with the Reverse Split. The Reverse Split would take place shortly
following completion of the Offering and completion of the Recapitalization. In determining which,
if any, of the nine alternative reverse stock split ratios to implement, the Board of Directors may
consider, among other things, factors such as:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the historical trading price and trading volume of the common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the then prevailing trading price and
trading volume of the common stock and the
anticipated impact of the reverse stock
split on the trading market for the common
stock;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to continue our listing on Nasdaq;</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>which of the alternative reverse split
ratios would result in the greatest overall
reduction in our administrative costs; and</TD>
</TR>

<TR>
    <TD style="font-size: 8pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>prevailing general market and economic conditions.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">By way of example, assuming the Reverse Split is approved by our stockholders and our Board of
Directors selects a 1-for-3 ratio, if a stockholder currently holds 6,000 shares of our common
stock before the Reverse Split, this stockholder would own 2,000 shares after the Reverse Split.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company does not expect the Reverse Split to have any economic effect on the stockholders,
Warrant holders or option holders, except to the extent the Reverse Split will result in fractional
shares being cashed out or Warrants being rounded down as described below.
</DIV>

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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>If the Reverse Split is approved by our stockholders but the Amendment and the Standby Issuance are
not both approved by stockholders, the Board of Directors will use its best judgment in determining
whether to affect the Reverse Split. The Board of Directors will make this determination taking
into consideration the factors set forth above.</B>
</DIV>

<DIV align="left">
<A name="C21565142"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Purpose of the Reverse Split</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The primary purpose of the Reverse Split is to increase the likelihood that the Company can remain
eligible to have its common stock listed on Nasdaq. Nasdaq requires that companies maintain a bid
price for their common stock of $1.00 or greater. The bid price for the Company&#146;s common stock has
fallen below this minimum in the past, but has recovered and we have been able to maintain our
listing on Nasdaq. On July&nbsp;13, 2011 the Company received notice from Nasdaq that it does not
comply with the minimum bid price requirement for continued listing on Nasdaq. The Company has
until January&nbsp;9, 2012 to regain compliance with this requirement. The proposed Reverse Split is
intended to raise the bid price of the Company&#146;s common stock to a level well above the $1.00 per
share minimum.
</DIV>

<DIV align="left">
<A name="C21565143"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Effect on Authorized but Unissued Shares of Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are currently authorized to issue up to 12&nbsp;million shares of common stock. If stockholders
approve the Amendment, we would be authorized to issue up to 50&nbsp;million shares of common stock.
The number of authorized shares of common stock will not be proportionately reduced in the Reverse
Split. By reducing the number of the Company&#146;s issued and outstanding shares, the Reverse Split
would have the effect of creating additional authorized and unissued shares of common stock. By
way of example, if there were 30&nbsp;million shares of common stock outstanding and 20&nbsp;million
available authorized but unissued shares before a 1-for-3 reverse stock split, after the reverse
stock split there would be 10&nbsp;million outstanding shares and 40&nbsp;million authorized but unissued
shares of common stock. The Company has no current plans to issue any of the additional authorized
shares resulting from the Reverse Split. However, the additional authorized shares could be issued
by the Company without a vote of the stockholders. To the extent that additional shares of common
stock are issued in the future, they may decrease existing stockholders&#146; percentage equity
ownership and could be dilutive to the voting rights of existing stockholders. Further, the Company
has not proposed the Reverse Split with the intention of using the resulting authorized and
unissued shares for anti-takeover purposes, but the Company would be able to use the additional
shares to oppose a hostile attempt or delay or prevent changes in control or management of the
Company.
</DIV>

<DIV align="left">
<A name="C21565144"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Effect on Outstanding Stock Options and Warrants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Proportionate adjustments will be made to the per share exercise price and the number of shares
issuable upon the exercise of all outstanding options and Warrants entitling the holders thereof to
purchase shares of our common stock, which will result in approximately the same aggregate price
being required to be paid for these options and Warrants upon exercise of the options and Warrants
immediately preceding the Reverse Split.
</DIV>

<DIV align="left">
<A name="C21565145"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Effect on Par Value</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The proposed amendment to the Company&#146;s Certificate of Incorporation to affect the Reverse Split
will not affect the par value of the Company&#146;s common stock, which will remain at $0.01 per share.
</DIV>

<DIV align="left">
<A name="C21565146"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Reduction in Stated Capital</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As a result of the Reverse Split, the stated capital on the Company&#146;s balance sheet attributable to
common stock, which consists of the par value per share of the Company&#146;s common stock multiplied by
the aggregate number of shares of common stock issued and outstanding, will be reduced in
proportion to the size of the Reverse Split. Correspondingly, the additional paid-in capital
account,
which consists of the difference between the Company&#146;s stated capital and the aggregate amount paid
to the Company upon issuance of all currently outstanding shares of the Company&#146;s common stock,
will be credited with the amount by which the stated capital is reduced. The Company&#146;s
stockholders&#146; equity, in the aggregate, will remain unchanged.
</DIV>

<DIV align="left">
<A name="C21565147"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Procedure for Affecting the Reverse Split; Exchange of Stock Certificates</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If our stockholders approve the Reverse Split and the Board of Directors determines to affect the
Reverse Split, we intend to file a Certificate of Amendment to our Certificate of Incorporation
with the Secretary of State of the State of Delaware, shortly following completion of the Offering
and the Recapitalization. After the filing and effectiveness of the amendment, shares of our
common stock issued and outstanding (&#147;Old Shares&#148;) will be converted into fully paid and
nonassessable share of our common stock (&#147;New Shares&#148;) at the reverse stock split ratio selected by
the Board of Directors. Warrants will be adjusted proportionately, rounded down and no fractional
Warrants will be issued. Holders of any fractional shares that result from the Reverse Split will
receive cash in lieu of these fractional shares. The text of the amendment to effect the Reverse
Split will be in substantially the form attached hereto as Appendix&nbsp;A.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Upon the effectiveness of the Reverse Split, the Company intends to treat shares held by
stockholders through a bank, broker, custodian or other nominee (i.e. stockholders who hold in
street name) in the same manner as registered stockholders whose shares are registered in their
names. Brokers, banks and other nominees will be instructed to affect the Reverse Split for their
beneficial holders holding shares of our common stock in street name. However, these brokers,
banks and other nominees may have different procedures than registered stockholders for processing
the Reverse Split and making payment for fractional shares. Stockholders who hold shares of our
common stock with a bank, broker, custodian or other nominee and who have any questions in this
regard are encouraged to contact their brokers, banks or other nominees.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Stockholders holding shares of our common stock in certificated form will be sent a transmittal
letter by our transfer agent, which will serve as the Company&#146;s exchange agent in effecting the
exchange of certificates following the effectiveness of the Reverse Split. The letter of
transmittal will contain instructions on how a stockholder should surrender his, her or its
certificate(s) representing shares of our common stock (the &#147;Old Certificates&#148;) to the exchange
agent in exchange for certificates representing the appropriate number of whole shares of our
post-Reverse Split common stock (the &#147;New Certificates&#148;). No New Certificates will be issued to a
stockholder until the stockholder has surrendered all Old Certificates, together with a properly
completed and executed letter of transmittal and evidence of ownership of the Old Certificates as
the Company may require, to the exchange agent.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>STOCKHOLDERS SHOULD NOT FORWARD THEIR OLD CERTIFICATES TO THE EXCHANGE AGENT UNTIL THEY RECEIVE THE
LETTER OF TRANSMITTAL, AND THEY SHOULD ONLY SEND IN THEIR OLD CERTIFICATES WITH THE LETTER OF
TRANSMITTAL.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">No stockholder will be required to pay a transfer or other fee to exchange his, her or its Old
Certificates. Stockholders will then receive a New Certificate(s) representing the number of whole
shares of our common stock that they are entitled to as a result of the Reverse Split. Until
surrendered, the Company will deem outstanding Old Certificates held by stockholders to be
cancelled and only to represent the number of whole shares of our post-Reverse Split common stock
to which these stockholders are entitled. Any Old Certificates submitted for exchange, whether
because of a sale, transfer or other disposition of stock, will automatically be exchanged for New
Certificates. If a stockholder is entitled to a payment in lieu of any fractional share, this
payment will be made as described below under &#147;&#151; Fractional Shares and Odd Lots<I>.</I>&#148; Warrants will
be adjusted automatically in the event of a Reverse Split.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Except for any changes as a result of the treatment of fractional shares, each stockholder will
hold the same percentage of our common stock outstanding after the Reverse Split as that
stockholder did immediately prior to the Reverse Split. The text of the form of the amendment to
our Certificate of Incorporation attached to this proxy statement is subject to modification to
include changes as may be required by the Office of the Secretary of State of the State of Delaware
and as our Board of Directors deems necessary and advisable to affect the Reverse Split.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our common stock is currently registered under Section 12(b) of the Securities Exchange Act of
1934, as amended (the &#147;Exchange Act&#148;), and as a result, we are subject to the periodic reporting
and other requirements of the Exchange Act. The Reverse Split will not affect the registration of
our common stock under the Exchange Act. Our common stock will continue to be listed on the Nasdaq
Capital Market under the symbol &#147;CFBK&#148;, although the letter &#147;D&#148; will be added to the end of the
trading symbol for a period of 20 trading days after the Reverse Split to indicate that a reverse
stock split has occurred. See &#147;Background to the Proposals&#151;The Reverse Split.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">After the Reverse Split, our common stock will have a new Committee on Uniform Securities
Identification Procedures (&#147;CUSIP&#148;) number, which is a number used to identify the Company&#146;s equity
securities, and stock certificates with the older CUSIP number will need to be exchanged for stock
certificates with the new CUSIP number by following the procedures described above.
</DIV>

<DIV align="left">
<A name="C21565148"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Fractional Shares and Odd Lots</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company will not issue fractional shares with respect to the Reverse Split. In lieu of a
fraction of a share of common stock, each stockholder who otherwise would have been entitled to a
fraction of a share shall be paid cash (without interest and subject to applicable withholding
taxes) in an amount determined by the Board of Directors to be the fair value of the fraction of a
share as of the effective time of the Reverse Split. No stockholder shall be entitled to dividends,
voting rights or any other rights in respect of any fractional share interest. The Company&#146;s
stockholder list shows that some of our outstanding common stock is registered in the names of
clearing agencies and broker nominees. Because the Company does not know the number of shares held
by each beneficial owner for whom the clearing agencies and broker nominees are record holders, the
Company cannot predict with certainty the number of fractional shares that will result from the
Reverse Split or the total number of additional shares that would be issued as a result of
fractional shares. However, the Company does not expect that the amount will be material. The
Company does not expect the Reverse Split to result in a significant reduction in the number of
record holders. The Company presently does not intend to seek any change in its status as a
reporting company for federal securities law purposes, either before or after the Reverse Split.
If approved, the Reverse Split will result in some stockholders owning &#147;odd lots&#148; of less than 100
shares of our common stock. Brokerage commissions and other costs of transactions in odd lots are
generally somewhat higher than the costs of transactions in &#147;round lots&#148; of even multiples of 100
shares.
</DIV>

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

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If a stockholder who holds shares in certificated form is entitled to payment in lieu of any
fraction of a share, the stockholder will receive a check as soon as practicable following the
effectiveness of the Reverse Split and after the stockholder has submitted an executed transmittal
letter and surrendered all Old Certificates. If a stockholder who holds shares in book-entry form
is entitled to a payment in lieu of any fraction of a share, the stockholder will receive a check
as soon as practicable after the effectiveness of the Reverse Split without need for further action
by the stockholder. Those stockholders who hold shares of our common stock with a bank, broker,
custodian or other nominee should contact their bank, broker, custodian or other nominee for
information on the treatment and processing of factional shares by their bank, broker, custodian or
other nominee. By signing and cashing a check, stockholders will warrant that they owned the
shares of our common stock for which they received payment. The cash payment to be made in lieu of
issuing fractional shares is subject to applicable federal and state income tax and state abandoned
property laws. Stockholders will not be entitled to receive interest for the period of time between
the effectiveness of the Reverse Split and the date payment is received.
</DIV>

<DIV align="left">
<A name="C21565149"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Possible Effects of Approving the Proposed Reverse Split</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">While one effect of the proposed Reverse Split may be to increase the price of our common stock,
there can be no assurance that the total market capitalization of our common stock after the
proposed Reverse Split will be equal to or greater than the total market capitalization before the
proposed Reverse Split or that the per share market price of our common stock following the Reverse
Split will remain higher than the current per share market price. There can be no assurance that
the market price per share of the New Shares after the Reverse Split will rise or remain constant
in proportion to the reduction in the number of the Old Shares outstanding before the Reverse
Split. For example, based on the closing market price of our common stock on &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;, 2011
of $&#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093; per share, there can be no assurance that the post-Reverse Split market price of our
common stock will be $&#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093; per share or greater. Accordingly, the total market capitalization
of our common stock after the proposed Reverse Split may be lower than the total market
capitalization before the proposed Reverse Split and, in the future, the market price of our common
stock following the Reverse Split may not remain higher than the market price prior to the proposed
Reverse Split.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If our stockholders approve the Reverse Split, our Board of Directors will have the ability to
issue additional shares of our common stock without further vote of our stockholders, except as
provided under Delaware law or under the rules of any securities exchange on which shares of our
common stock are then issued. Holders of our common stock have no preemptive or similar rights,
which means that current and future holders of our common stock do not and will not have a prior
right to purchase any new issue of our capital stock in order to maintain their proportionate
ownership thereof. The issuance of additional shares of our common stock would decrease the
proportionate equity interest of our current stockholders and, depending upon the price paid for
such additional shares, could result in dilution to our current stockholders. The issuance of
additional shares of our common stock could also depress the market price of our common stock.
</DIV>

<DIV align="left">
<A name="C21565150"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Possible Effects of NOT Approving the Proposed Reverse Split</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If our stockholders do not approve the Reverse Split, it is possible that our common stock will not
continue to be eligible for listing on Nasdaq. If our stockholders approve the Amendment and the
Standby Issuance, we intend to attempt to complete the Offering and the Recapitalization regardless
of whether we receive approval of the Reverse Split.
</DIV>

<DIV align="left">
<A name="C21565151"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>No Dissenter&#146;s Rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Under Delaware law, our stockholders are not entitled to dissenter&#146;s rights with respect to the
proposed approval of the Reverse Split, and we will not independently provide our stockholders with
any such right.
</DIV>

<DIV align="left">
<A name="C21565152"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following is a summary of important tax considerations of the Reverse Split. It addresses only
stockholders who hold the pre-Reverse Split shares and post-Reverse Split shares as capital assets.
It does not purport to be complete and does not address stockholders subject to special rules, such
as financial institutions, tax-exempt organizations, insurance companies, dealers in securities,
mutual funds, foreign stockholders, stockholders who hold the pre-Reverse Split shares as part of a
straddle, hedge, or conversion transaction, stockholders who hold the pre-Reverse Split shares as
qualified small business stock within the meaning of Section&nbsp;1202 of the Code, stockholders who are
subject to the alternative minimum tax provisions of the Code, and stockholders who acquired their
pre- Reverse Split shares pursuant to the exercise of employee stock options or otherwise as
compensation. This summary is based upon current law, which may change, possibly even
retroactively. It does not address tax considerations under state, local, foreign, and other laws.
Furthermore, we have not obtained a ruling from the Internal Revenue Service or an opinion of legal
or tax counsel with respect to the consequences of the Reverse Split. <B>Each Stockholder is Advised
to Consult His or Her Own Tax Advisor as to the Tax Consequences of the Reverse Split on His or Her
Own Situation.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>U.S. Holders</I></B><B>. </B>The discussion in this section is addressed to &#147;U.S. holders.&#148; A U.S. holder is a
beneficial owner of our common stock who for U.S. federal income tax purposes is (a)&nbsp;a citizen or
resident of the United States, (b)&nbsp;a corporation, or an entity treated as a corporation, created or
organized in or under the laws of the United States or any state or political subdivision thereof,
(c)&nbsp;a trust that (i)&nbsp;is subject to (A)&nbsp;the primary supervision of a court within the United States
and (B)&nbsp;the authority of one or more United States persons to control all substantial decisions of
the trust or (ii)&nbsp;has a valid election in effect under applicable Treasury Regulations to be
treated as a United States person, or (d)&nbsp;an estate that is subject to U.S. federal income tax on
its income regardless of its source. The Reverse Split should be treated as a tax-free
recapitalization for U.S. federal income tax purposes. Therefore, except as described below with
respect to the receipt of cash in lieu of fractional shares, no gain or loss will be recognized by
a stockholder on account of the Reverse Split. Accordingly, the aggregate tax basis in the common
stock received pursuant to the Reverse Split should equal the aggregate tax basis in the common
stock surrendered (excluding the portion of the tax basis that is allocable to any fractional
share), and the holding period for the common stock received should include the holding period for
the common stock surrendered.
</DIV>

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

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Cash in lieu of fractional shares</I></B><I>. </I>A U.S. holder who receives cash in lieu of a fractional share
of our common stock pursuant to the Reverse Split will recognize capital gain or loss in an amount
equal to the difference between the amount of cash received and the U.S. holder&#146;s tax basis in the
shares of our common stock surrendered that is allocated to such fractional share of our common
stock. Such capital gain or loss will be long term capital gain or loss if the U.S. holder&#146;s
holding period for our common stock surrendered exceeded one year at the effective time of the
Reverse Split. The deductibility of capital losses is subject to limitation under the Internal
Revenue Code.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>U.S. Information Reporting and Backup Withholding</I></B>. Information returns generally will be required
to be filed with the Internal Revenue Service (&#147;IRS&#148;) with respect to the receipt of cash in lieu
of a fractional share of our common stock pursuant to the Reverse Split in the case of certain U.S.
holders. In addition, U.S. holders will be subject to backup withholding (at the current applicable
rate of 28%) on the payment of this cash if they do not provide proof of an applicable exemption or
furnish their taxpayer identification number and otherwise comply with all applicable requirements
of the applicable backup withholding tax rules. Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules may be refunded or allowed as a credit against
the U.S. holder&#146;s federal income tax liability, if any, provided the required information is timely
furnished to the IRS.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Non-U.S. Holders</I></B><B>. </B>The discussion in this section is addressed to &#147;non-U.S. holders.&#148; A non-U.S.
holder is a beneficial owner of our common stock who is a foreign corporation or a non-resident
alien individual. Generally, non-U.S. holders will not recognize gain or loss for U.S. income tax
purposes on account of the Reverse Split.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>Cash in lieu of fractional shares</I></B><I>. </I>A non-U.S. holder will not recognize gain or loss for U.S.
federal income tax purposes with respect to cash received in lieu of a fractional share provided
that (a)&nbsp;the gain or loss is not effectively connected with the conduct of a trade or business in
the United States by such non-U.S. holder (or, if certain income tax treaties apply, is not
attributable to the non-U.S. holder&#146;s permanent establishment in the United States), (b)&nbsp;with
respect to a non-U.S. holder who is an individual, the non-U.S. holder is present in the United
States for less than 183&nbsp;days in the taxable year of the Reverse Split and other conditions are
met, and (c)&nbsp;the non-U.S. holder complies with certain certification requirements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B><I>U.S. Information Reporting and Backup Withholding Tax</I></B><I>. </I>In general, backup withholding and
information reporting will not apply to a payment of cash in lieu of a fractional share of our
common stock to a non-U.S. holder pursuant to the Reverse Split if the non-U.S. holder certifies under penalties of perjury that it is a non-U.S. holder and the applicable
withholding agent does not have actual knowledge to the contrary. Backup withholding is not an
additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed
as a credit against the non-U.S. holder&#146;s U.S. federal income tax liability, if any, provided that
certain required information is timely furnished to the IRS. In certain circumstances the amount of
cash paid to a non-U.S. holder in lieu of a fractional share of our common stock, the name and
address of the beneficial owner and the amount, if any, of tax withheld may be reported to the IRS.
</DIV>

<DIV align="left">
<A name="C21565153"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>The Board of Directors unanimously recommends a vote &#147;For&#148; the proposal to grant discretionary
authority to the Company&#146;s Board of Directors to amend the Company&#146;s Certificate of Incorporation
to affect a reverse stock split of the Company&#146;s common stock in a specific ratio ranging from
1-for-2 to 1-for-5, as selected by the Company&#146;s Board of Directors.</B>
</DIV>

<DIV align="left">
<A name="C21565154"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL 4 &#151; THE ADJOURNMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In the event there are not sufficient votes at the time of the Special Meeting to approve the
Amendment, the Standby Issuance or the Reverse Split, our Board of Directors may propose to adjourn
the Special Meeting to a later date or dates in order to permit the solicitation of additional
proxies. Pursuant to Delaware law, the Board of Directors is not required to fix a new record date
to determine the stockholders entitled to vote at the adjourned meeting. If the Board of Directors
does not fix a new record date, it is not necessary to give any notice of the time and place of the
adjourned meeting other than an announcement at the meeting at which the adjournment is taken. If
a new record date is fixed, notice of the adjourned meeting shall be given as in the case of an
original meeting.
</DIV>


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

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">In order to permit proxies that have been received by us at the time of the Special Meeting to be
voted for an adjournment, if necessary, we have submitted the Adjournment to you as a separate
matter for your consideration. If approved, the Adjournment will authorize the holder of any proxy
solicited by our Board of Directors to vote in favor of adjourning the Special Meeting and any
later adjournments. If our stockholders approve the Adjournment, we could adjourn the Special
Meeting, and any adjourned session of the Special Meeting, to use the additional time to solicit
additional proxies in favor of the other proposals, including the solicitation of proxies from our
stockholders who have previously voted against the other proposals. Among other things, approval of
the Adjournment could mean that, even if proxies representing a sufficient number of votes against
the proposals relating to the Amendment, the Standby Issuance or the Reverse Split have been
received, we could adjourn the Special Meeting without a vote on any of those proposals and seek to
convince the holders of those shares to change their votes to votes in favor of the proposals.
</DIV>

<DIV align="left">
<A name="C21565155"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>The Board of Directors unanimously recommends that you vote &#147;FOR&#148; the approval of the adjournment
of the special meeting, if necessary.</B>
</DIV>

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

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565156"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS<BR>
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table sets forth, as of the voting record date, certain information as to the common
stock beneficially owned by each person or entity, including any &#147;group&#148; as that term is used in
Section&nbsp;13(d)(3) of the Securities Exchange Act of 1934, who or which was known to the Company to
be the beneficial owner of more than 5% of the issued and outstanding common stock. &#091;<B>UPDATE&#093;</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Nature of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Beneficial</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common Stock</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Address of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Ownership</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">MacNealy Hoover Investment Management, Inc.<SUP style="FONT-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">454,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">11.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Harry C.C. MacNealy<br>
200 Market Avenue North, Suite&nbsp;200<br>
Canton, OH 44702</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Uni Capital LP<SUP style="FONT-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">409,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.9</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Uni Capital GP LLC<br>
Reid S. Buerger<br>
7111 Valley Green Road<br>
Fort Washington, PA 19304</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wellington Management Company, LLP<SUP style="FONT-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">333,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">75 State Street<br>
Boston, MA 02109</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">United States Department of the Treasury<SUP style="FONT-size: 85%; vertical-align: text-top">(4)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">336,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">1500 Pennsylvania Avenue, NW<br>
Washington, DC 20220</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




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

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on information contained in a statement on Schedule&nbsp;13G dated April&nbsp;14, 2011 and
filed April&nbsp;19, 2011, MacNealy Hoover Investment Management, Inc. has shared voting power and
shared investment power over 454,605 shares of the outstanding common stock of the Company. A
provision in the Company&#146;s Certificate of Incorporation eliminates the ability of any
beneficial owner of more than 10% of the Company&#146;s outstanding common stock to vote any shares
in excess of this 10% limit.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on information contained in a statement on Schedule&nbsp;13D/A dated March&nbsp;25, 2010 and
filed March&nbsp;25, 2010, this group has sole voting power and sole investment power over 409,784
shares of the outstanding common stock of the Company.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on information contained in a statement on Schedule&nbsp;13G/A dated December&nbsp;31, 2007 and
filed February&nbsp;14, 2008, Wellington Management Company, LLP has shared voting power over
251,388 shares of the outstanding common stock of the Company and shared investment power over
333,088 shares of the outstanding common stock of the Company.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents the warrant for 336,568 shares of common stock of the Company acquired by Treasury
in connection with its purchase of shares of Series&nbsp;A Preferred Stock of the Company in TARP.
The Treasury may exercise the warrant and may sell the warrant or the underlying warrant
shares anytime before December&nbsp;15, 2018. Treasury has agreed not to vote the warrant shares,
but that agreement would not apply to any subsequent holder.</TD>
</TR>

</TABLE>

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

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

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">





<DIV align="left">
<A name="C21565157"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Security Ownership of Directors and Executive Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The following table sets forth information as of the voting record date with respect
to the number of shares of Company common stock considered to be owned by each director of the
Company, by each executive officer named in the Summary Compensation Table of the annual
meeting proxy statement, and by all directors and executive officers of the Company as a
group. A person may be
considered to own any shares of common stock over which he or she has, directly or indirectly, sole
or shared voting or investment power.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Nature of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percent of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Beneficial</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common Stock</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Ownership</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jerry F. Whitmer, Chairman of the Board, Director<SUP style="FONT-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey W. Aldrich, Director<SUP style="FONT-size: 85%; vertical-align: text-top">(1)(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas P. Ash, Director<SUP style="FONT-size: 85%; vertical-align: text-top">(1)(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William R. Downing, Director<SUP style="FONT-size: 85%; vertical-align: text-top">(1)(4)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.9</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gerry W. Grace, Director<SUP style="FONT-size: 85%; vertical-align: text-top">(1)(5)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Eloise L. Mackus, Chief Executive Officer, General Counsel and Secretary<SUP style="FONT-size: 85%; vertical-align: text-top">(6)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Therese A. Liutkus, President, Treasurer and Chief Financial Officer<SUP style="FONT-size: 85%; vertical-align: text-top">(7)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Corey D. Caster, Vice President, Mortgage Division, CFBank<SUP style="FONT-size: 85%; vertical-align: text-top">(8)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">All directors and executive officers as a group (10 persons)<SUP style="FONT-size: 85%; vertical-align: text-top">(9)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">318,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.5</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



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

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 4,400 shares which may be acquired by exercising stock options within 60&nbsp;days.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 23,322 shares owned by Jean Aldrich, Mr.&nbsp;Aldrich&#146;s spouse.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 shares that Mr.&nbsp;Ash has pledged as security.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 16,192 shares owned by R.H. Downing, Inc., which is 100% owned by Mr.&nbsp;Downing, and
10,000 shares owned by Mary Downing Trust, of which Mr.&nbsp;Downing is trustee.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 2,790 shares owned by Janet Grace, Mr.&nbsp;Grace&#146;s spouse.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 10,000 shares awarded to Ms.&nbsp;Mackus pursuant to the Company&#146;s equity compensation
plans which have not yet vested, but as to which she may provide voting recommendations.
Includes 38,250 shares which may be acquired by exercising stock options within 60&nbsp;days.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 10,000 shares awarded to Ms.&nbsp;Liutkus pursuant to the Company&#146;s equity compensation
plans which have not yet vested, but as to which she may provide voting recommendations.
Includes 35,500 shares which may be acquired by exercising stock options within 60&nbsp;days.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 340 shares which may be acquired by exercising stock options within 60&nbsp;days. Mr.
Caster resigned as of July&nbsp;1, 2011.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 shares awarded to all directors and executive officers as a group pursuant to
the Company&#146;s equity compensation plans which have not yet vested, but as to which they may
provide voting recommendations. Includes 107,840 shares which may be acquired by exercising
stock options within 60&nbsp;days.</TD>
</TR>

</TABLE>



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

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

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<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565158"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>STOCKHOLDER PROPOSALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">If a stockholder desires to have a proposal included in the Company&#146;s proxy statement and form of
proxy for the 2012 annual meeting of stockholders, the proposal must conform to the requirements of
the Securities Exchange Act of 1934 Rule&nbsp;14a-8 and other applicable proxy rules and interpretations
of the Securities and Exchange Commission concerning the submission and content of proposals and
must be received by the Company, at 2923 Smith Road, Fairlawn, Ohio 44333, prior to the close of
business on December&nbsp;21, 2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The Company&#146;s Bylaws provide an advance notice procedure for a stockholder to properly bring
business before an annual meeting of stockholders. For business to be properly brought before an
annual meeting by a stockholder the business must relate to a proper subject matter for stockholder
action and the stockholder must have given timely notice thereof in writing to the Corporate
Secretary of the Company. To be timely, a stockholder&#146;s notice must be delivered or mailed to and
received at the principal executive offices of the Company not less than 90&nbsp;days prior to the date
of the annual meeting; provided, however, that in the event that less than 100&nbsp;days&#146; notice or
prior public disclosure of the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the close of business on the
10<SUP style="FONT-size: 85%; vertical-align: text-top">th</SUP> day following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. A stockholder&#146;s notice to the Corporate Secretary shall
set forth as to each matter such stockholder proposes to bring before the annual meeting: (i)&nbsp;a
brief description of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting; (ii)&nbsp;the name and address, as they appear on
the Company&#146;s books, of the stockholder proposing such business; (iii)&nbsp;the class and number of
shares of the Company&#146;s capital stock that are beneficially owned by such stockholder; and (iv)&nbsp;any
material interest of such stockholder in such business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Assuming that the 2012 annual meeting of stockholders is held on the third Thursday of May, 2012,
as has been the Company&#146;s recent practice, and that such date is announced at least 100&nbsp;days in
advance, a stockholder&#146;s proposal for that meeting must be received by the Company at 2923 Smith
Road, Fairlawn, Ohio 44333, not later than the close of business on February&nbsp;8, 2012 in order to be
considered timely. If any proposal is received after that date, it will be considered untimely,
and the persons named in the proxies solicited by the Board of Directors of the Company may
exercise discretionary voting power with respect to that proposal.
</DIV>

<DIV align="left">
<A name="C21565159"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">We are subject to the informational requirements of the Securities Exchange Act of 1934.
Accordingly we file annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any reports, statements or other information that we may file
with the SEC at the SEC&#146;s Public Reference Room at 100 F Street, N.E., Room&nbsp;1580, Washington, D.C.,
20549. You may obtain information on the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information
statements and other information about issuers that file electronically with the SEC. The address
of the SEC&#146;s Internet site is http://www.sec.gov.
</DIV>

<DIV align="left">
<A name="C21565160"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>INCORPORATION BY REFERENCE OF FINANCIAL STATEMENTS AND RELATED INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The SEC allows us to &#147;incorporate by reference&#148; into this proxy statement other documents we file
with the SEC. This means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be a part of this proxy
statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Our Audited Consolidated Financial Statements (including Notes thereto) are incorporated by
reference from Items 8 and 15(a)(1) of our Annual Report on Form 10-K for the fiscal year ended
December&nbsp;31, 2010. Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations for the fiscal year ended December&nbsp;31, 2010 is incorporated by reference from Item&nbsp;7 of
our Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2010. Information regarding
changes in and disagreements with our accountants on accounting and financial disclosure is
incorporated by reference from Item&nbsp;9 of our Annual Report on Form 10-K for the fiscal year ended
December&nbsp;31, 2010. Information regarding quantitative and qualitative disclosures about market
risk is incorporated by reference from Item&nbsp;7A of our Annual Report on Form 10-K for the fiscal
year ended December&nbsp;31, 2010. Information regarding our Financial Information contained in Part&nbsp;I
of our Quarterly Report on Form 10-Q is incorporated by reference from our Quarterly Report on Form
10-Q for the quarter ended June&nbsp;30, 2011. The form of Standby Purchase Agreement is incorporated
by reference from our Current Report on Form 8-K dated August&nbsp;11, 2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">A copy of our Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2010, our Quarterly
Report on Form 10-Q for the quarter ended June&nbsp;30, 2011 and the form of Standby Purchase Agreement
contained in our Current Report on Form 8-K dated August&nbsp;11, 2011 is included in the materials sent
to you with this proxy statement. In addition, you can obtain a copy of these materials from the
SEC at its website, <I>www.sec.gov</I>. Further, upon receipt of a written request, the Company will
furnish to any stockholder without
charge a copy of these materials. Written requests should be directed to Eloise L. Mackus, Chief
Executive Officer, General Counsel and Secretary, Central Federal Corporation, 2923 Smith Road,
Fairlawn, Ohio, 44333.
</DIV>


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

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

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<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">



<DIV align="left">
<A name="C21565161"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CAUTIONARY AND FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left">
<A name="C21565162"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The issuance of the securities in the transactions described in this proxy statement have not yet
been registered under the Securities Act of 1933 or any state securities laws, and may not be
offered or sold in the United States absent registration or an applicable exemption from the
registration requirements of the Securities Act of 1933 and applicable state securities laws. This
proxy statement shall not constitute an offer to sell or the solicitation of an offer to buy the
securities, nor shall there be any sale of the securities in any jurisdiction or state in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction or state.
</DIV>

<DIV align="left">
<A name="C21565163"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Forward-Looking Statements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This proxy statement, including the financial and other information required to be disclosed
herein, may contain forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995 and are subject to risk and uncertainties which could cause actual results to
differ materially from those currently anticipated due to a number of factors. All statements
other than statements of historical fact are &#147;forward-looking statements&#148; for purposes of federal
and state securities laws, including, but not limited to, statements about the anticipated success
of the Recapitalization, anticipated future operating and financial performance, financial position
and liquidity, business prospects, strategic alternatives, business strategies, regulatory and
competitive outlook, investment and expenditure plans, capital and financing needs and
availability, plans and objectives of management for future operations and other similar forecasts
and statements of expectation and statements of assumptions underlying any of the foregoing. Words
such as &#147;will likely result,&#148; &#147;aims,&#148; &#147;anticipates,&#148; &#147;believes,&#148; &#147;could,&#148; &#147;estimates,&#148; &#147;expects,&#148;
&#147;hopes,&#148; &#147;intends,&#148; &#147;may,&#148; &#147;plans,&#148; &#147;projects,&#148; &#147;seeks,&#148; &#147;should,&#148; &#147;will,&#148; and variations of these
words and similar expressions are intended to identify these forward-looking statements. Such
forward-looking statements are based on the beliefs of management as well as assumptions made by
and information currently available to management. Our actual results may differ materially from
those contemplated by the forward-looking statements. We caution you therefore against relying on
any of these forward-looking statements. These statements are neither statements of historical
fact nor guarantees or assurances of future performance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Important factors that could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the following: inability to complete
the Recapitalization contemplated by the Standby Purchase Agreements; management&#146;s ability to
effectively execute the Company&#146;s and the Bank&#146;s business plan and regulatory compliance plans;
inability to raise additional capital on acceptable terms, or at all; inability to achieve the
higher minimum capital ratios required by the Bank Cease and Desist Order; inability of the Company
to receive dividends from the Bank and to satisfy obligations as they become due; regulatory
enforcement actions to which the Company and the Bank are currently, and may in the future be
subject; costs and effects of legal and regulatory developments, and the results of regulatory
examinations or reviews; changes in capital classification; the impact of current economic
conditions and the Company&#146;s results of operations on its ability to borrow additional funds to
meet its liquidity needs; local, regional, national and international economic conditions and
events and the impact they may have on the Company and its customers; changes in the economy
affecting real estate values; inability to attract and retain deposits; changes in the level of
non-performing assets and charge-offs; changes in estimates of future reserve requirements based
upon the periodic review thereof under relevant regulatory and accounting requirements; changes in
the financial performance and/or condition of the Bank&#146;s borrowers; effect of additional provision
for loan losses; long-term negative trends in the Company&#146;s market capitalization; continued
listing of the Company&#146;s common stock on Nasdaq; effects of any changes in trade and monetary and
fiscal policies and laws, including the interest rate policies of the Federal Reserve Board;
inflation, interest rate, cost of funds, securities market and monetary fluctuations; continued
volatility in the credit and equity markets and its effect on the general economy; effect of
changes in laws and regulations (including laws concerning banking, taxes and securities) with
which the Company and its subsidiaries must comply; and effect of changes in accounting policies
and practices. In addition to the risks and factors identified above, reference is also made to
other risks and factors detailed in reports filed by the Company with the Securities and Exchange
Commission, including the Company&#146;s Annual Report on Form 10-K, as amended, for the year ended
December&nbsp;31, 2010. The Company cautions that the foregoing factors are not exclusive.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Forward-looking statements speak only as of the date they are made, and the Company does not
undertake to update forward-looking statements to reflect circumstances or events that occur after
the date the forward-looking statements are made, whether as a result of new information, future
developments or otherwise, except as may be required by law.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED<BR>
PROXY CARD AND RETURN IT AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Eloise L. Mackus</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer, General Counsel and Secretary</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Fairlawn, Ohio<BR>
<B>&#091;</B><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><B>&#093;</B>, 2011

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

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

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#C21565tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">REVOCABLE PROXY<BR>
CENTRAL FEDERAL CORPORATION
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CENTRAL FEDERAL<BR>
CORPORATION FOR USE AT THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD<BR>
ON &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;, 2011 AND AT ANY ADJOURNMENT THEREOF.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The undersigned hereby appoints the Board of Directors of Central Federal Corporation, with full
power of substitution, as proxies for the undersigned, and to vote all shares of common stock of
Central Federal Corporation which the undersigned is entitled to vote at the Special Meeting of
Stockholders, to be held at Fairlawn Country Club, located at 200 North Wheaton Road, Fairlawn,
Ohio on &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;, &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;, 2011 at &#091;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&#093;.m., local time, and at any and all
adjournments or postponements of said meeting, as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">For</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Against</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Abstain</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1. To
approve an
amendment to our
Certificate of
Incorporation, as
amended, to
increase the number
of authorized
shares of common
stock from 12
million to 50
million.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2. To
approve the
issuance and sale
of a number of
shares of common
stock equal to more
than 20% of our
outstanding common
stock in accordance
with the terms of
the Standby
Purchase Agreements
between the Company
and the Standby
Purchasers.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3. To approve a
proposal to grant
discretionary
authority to the
Company&#146;s Board of
Directors to amend
our Certificate of
Incorporation, as
amended, to affect
a reverse stock
split of the
Company&#146;s common
stock in a specific
ratio ranging from
1-for-2 to 1-for-5,
as selected by the
Company&#146;s Board of
Directors ; and</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">4. To
approve an
adjournment of the
Special Meeting, if
necessary, to
solicit additional
proxies if there
are not sufficient
votes at the time
of the Special
Meeting to approve
proposals 1, 2 or
3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><I>Proposal
1 will be implemented if approved by our stockholders regardless of whether Proposal 2 or Proposal 3 <BR>
is approved by our stockholders at the Special Meeting.</I>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 10pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148;<BR>
EACH OF THE LISTED PROPOSALS</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap align="center" valign="top">Please be sure to date and sign this proxy card in the box below.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Date</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Sign above</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Detach above card, sign, date and mail in postage paid envelope provided.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This proxy is revocable and will be voted as directed, but if no instructions are specified, this
proxy will be voted &#147;FOR&#148; each of the proposals listed. If any other business is presented at the
Special Meeting, this proxy will be voted by the proxies in their best judgment. At the present
time, the Board of Directors knows of no other business to be presented at the Special Meeting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The above signed hereby acknowledges receipt of the Notice of the Special Meeting of Stockholders
of Central Federal Corporation, a Proxy Statement for the Special Meeting, the 2010 Annual Report
on Form 10-K, the Quarterly Report on Form 10-Q for the period ended June&nbsp;30, 2011 and the form of
Standby Purchase Agreement contained in the Current Report on Form 8-K dated August&nbsp;11, 2011.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Please
sign exactly as your name(s) appear(s) on this proxy card. Only one signature is required in the case of a <BR>
joint account. When signing in a representative capacity, please give title.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 10pt">PLEASE ACT PROMPTLY. SIGN, DATE &#038; MAIL YOUR PROXY CARD TODAY
</DIV>

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

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



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