<SUBMISSION>
<ACCESSION-NUMBER>0001193125-06-205121
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20061106
<FILING-DATE>20061010
<DATE-OF-FILING-DATE-CHANGE>20061010
<EFFECTIVENESS-DATE>20061010
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AF FINANCIAL GROUP
<CIK>0001064025
<ASSIGNED-SIC>6021
<IRS-NUMBER>562098545
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-24479
<FILM-NUMBER>061135691
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>21 EAST ASHE STREET
<CITY>WEST JEFFERSON
<STATE>NC
<ZIP>28694
<PHONE>3362464344
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>21 EAST ASHE STREET
<STREET2>PO BOX 26
<CITY>WEST JEFFERSON
<STATE>NC
<ZIP>28694
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>ddef14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Definitive Proxy Statement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4"><B>UNITED STATES </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="4"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>Washington, D.C. 20549 </B></FONT></P> <P
STYLE="font-size:16px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>SCHEDULE 14A </B></FONT></P> <P STYLE="margin-top:16px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>Proxy Statement Pursuant to Section 14(a) of the </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>Securities Exchange Act of
1934 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>(Amendment No. <U>&nbsp;&nbsp;&nbsp;&nbsp;</U> ) </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Filed by the Registrant </FONT><FONT FACE="WINGDINGS" SIZE="2"
COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by a
Party other than the Registrant </FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">Check the appropriate box: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Preliminary Proxy Statement </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Confidential, for Use of the Commission Only&nbsp;(as permitted by Rule 14a-6(e)(2))</B> </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><FONT FACE="WINGDINGS">&#120;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Definitive Proxy Statement </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Definitive Additional Materials </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Soliciting Material Pursuant to &#167;240.14a-12 </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>AF FINANCIAL GROUP </B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"
ALIGN="left"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Name of Registrant as Specified In Its Charter) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Name of Person(s) Filing
Proxy Statement, if other than the Registrant) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman"
SIZE="2">Payment of Filing Fee (Check the appropriate box): </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><FONT FACE="WINGDINGS">&#120;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">No fee required. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title of each class of securities to which the transaction applies: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Aggregate number of securities to which the transaction applies: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined): </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Proposed maximum aggregate value of the transaction: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Total fee paid: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fee paid previously with preliminary materials. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Check box if any part of the fee is offset as provided by Exchange Act Rule 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. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Amount Previously Paid: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Form, Schedule or Registration Statement No.: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Filing Party: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date Filed: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE WIDTH="99%">
<TR>
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="96%"><HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">

<IMG SRC="g48862img1.jpg" ALT="LOGO"> </P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">October&nbsp;11, 2006 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">Dear Shareholder: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">You are cordially invited to attend the 2006 Annual Meeting of Shareholders of AF
Financial Group, which will be held on November&nbsp;6, 2006 at 6:00 p.m., local time, at the executive offices of AF Financial Group, 21 East Ashe Street, West Jefferson, North Carolina 28694. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The attached Notice of the 2006 Annual Meeting of Shareholders and Proxy Statement describe the formal business to be transacted at the Annual Meeting.
Directors and officers of AF Financial Group, as well as a representative of Dixon Hughes PLLC, the independent auditors for the fiscal year ending June&nbsp;30, 2006, are expected to be present at the Annual Meeting to respond to appropriate
questions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Board of Directors of AF Financial Group has determined that an affirmative vote on each matter to be considered at the
Annual Meeting is in the best interests of AF Financial Group and its shareholders and unanimously recommends a vote &#147;FOR&#148; each of these matters. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Please complete, sign and return the enclosed proxy card promptly whether or not you plan to attend the Annual Meeting. <B>Your vote is important regardless of the number of shares you own. Voting by proxy will not
prevent you from voting in person at the Annual Meeting, but will assure that your vote is counted if you are unable to attend.</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On
behalf of the Board of Directors and the employees of AF Bank, AF Insurance Services, Inc. and AF Financial Group, we thank you for your continued support. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Sincerely yours, </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="43%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">

<IMG SRC="g48862img2.jpg" ALT="LOGO"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Jimmy D. Reeves <I></I></FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><I>Chairman of the Board</I></FONT></P></TD></TR>
</TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AF FINANCIAL GROUP </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>21 EAST ASHE STREET </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>WEST JEFFERSON, NORTH CAROLINA 28694 </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>(336) 246-4344 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>NOTICE OF THE 2006
ANNUAL MEETING OF SHAREHOLDERS </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="30%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="29%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="29%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Date:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><B>Monday, November&nbsp;6, 2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Time:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><B>6:00 p.m.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Place:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><B>21 East Ashe Street</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="2"><B>West Jefferson, North Carolina 28694</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">At our Annual Meeting we will ask you to: </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Elect three directors to serve for three-year terms; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Ratify the appointment of Dixon Hughes PLLC as independent auditors for the fiscal year ending June&nbsp;30, 2007; and </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Transact any other business as may properly come before the Annual Meeting. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">You may vote at the Annual Meeting if you were a shareholder of AF Financial Group at the close of business on September&nbsp;18, 2006, the record date. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="43%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By Order of the Board of Directors,</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">

<IMG SRC="g48862img3.jpg" ALT="LOGO"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Robert E. Washburn</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>President and Chief Executive Officer,</I></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">West Jefferson, North Carolina</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">October&nbsp;11, 2006</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>You are cordially invited to attend the Annual Meeting. It is important that your shares be
represented regardless of the number of shares you own. The Board of Directors urges you to sign, date and mark the enclosed proxy card promptly and return it in the enclosed envelope. Returning the proxy card will not prevent you from voting in
person if you attend the Annual Meeting. </B></FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>S<SMALL>OLICITATION</SMALL>, V<SMALL>OTING</SMALL> <SMALL>AND</SMALL> R<SMALL>EVOCABILITY</SMALL>
<SMALL>OF</SMALL> P<SMALL>ROXIES</SMALL> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>General </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">We have sent you this Proxy Statement and enclosed proxy card because the Board of Directors is soliciting your proxy to vote at the Annual Meeting. This Proxy Statement summarizes the information you will need to
know to cast an informed vote at the Annual Meeting. The Annual Meeting is scheduled for Monday, November&nbsp;6, 2006 at 6:00 p.m. local time at the offices of AF Financial Group, 21 East Ashe Street, West Jefferson North Carolina. You do not need
to attend the Annual Meeting to vote your shares. You may simply complete, sign and return the enclosed proxy card and your votes will be cast for you at the Annual Meeting. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We began mailing this Proxy Statement, the Notice of Annual Meeting and the enclosed proxy card on or about October&nbsp;11, 2006 to all shareholders
entitled to vote. If you owned AF Financial Group&#146;s common stock at the close of business on September&nbsp;18, 2006, (&#147;the Record Date&#148;) you are entitled to vote at the Annual Meeting. On the Record Date, there were 1,050,804 shares
of common stock outstanding. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">AsheCo, MHC is the majority owner of AF Financial Group, and, as of the Record Date, owns 538,221 shares of
common stock of AF Financial Group which constitutes approximately 51.2% of the total issued and outstanding common stock of AF Financial Group. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Quorum
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A quorum of shareholders is necessary to hold a valid meeting. If the holders of at least a majority of the total number of the
outstanding shares of common stock of AF Financial Group entitled to vote are represented in person or by proxy at the Annual Meeting, a quorum will exist. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Voting Rights </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">You are entitled to one vote at the Annual Meeting for each share of AF Financial Group&#146;s common stock
that you owned as of the Record Date. A person or entity beneficially owns shares if an affiliate or associate owns the shares or if a person acting in concert with that person or entity owns the shares. The number of shares you own (and may vote)
is listed on the proxy card. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B></B>You may vote your shares at the Annual Meeting in person or by proxy. To vote in person, you must
attend the Annual Meeting and obtain and submit a ballot, which we will provide to you at the Annual Meeting. To vote by proxy, you must complete, sign and return the enclosed proxy card. If you properly complete your proxy card and send it to us in
time to vote, your &#147;proxy&#148; (one of the individuals named on your proxy card) will vote your shares as you have directed. <B>If you sign the proxy card but do not make specific choices, your proxy will vote your shares FOR each of the
proposals identified in the Notice of the Annual Meeting. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">If any other matter is presented, your proxy will vote the shares
represented by all properly executed proxies on such matters as a majority of the Board of Directors determines. As of the date of this Proxy Statement, we know of no other matters that may be presented at the Annual Meeting, other than those listed
in the Notice of the Annual Meeting. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-1- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">If you are a shareholder whose shares are not registered in your own name, you will need appropriate
documentation from your shareholder of record (usually a broker) to vote personally at the Annual Meeting. Examples of such documentation would include a broker&#146;s statement, letter, or other document that will confirm your ownership of shares
of AF Financial Group. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Vote Required </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="18%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="80%"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><I>Proposal 1:</I></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Elect Three Directors</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">The three nominees for director who receive the most votes will be elected. If you do not vote for a nominee, or you indicate &#147;withhold authority&#148; for any nominee on your proxy
card, your vote will not count &#147;for&#148; or &#147;against&#148; the nominee. You may not vote your shares cumulatively for the election of directors.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2"><I>Proposal 2: </I></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman"
SIZE="2">Ratify Appointment<BR>of Independent<BR>Auditors</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">The affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on this proposal is required to ratify the appointment of Dixon
Hughes PLLC as AF Financial Group&#146;s independent auditors. If you &#147;abstain&#148; from voting, it has the same effect as if you voted &#147;against&#148; this proposal.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Effect of Broker Non-Votes </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">If your broker holds shares that you own in &#147;street name,&#148; the broker may be authorized to vote your shares on the two proposals listed above even if the broker does not receive instructions from you. If
your broker does not vote on <U>any</U> of the proposals but returns the proxy card representing your shares, this will constitute a &#147;broker non-vote.&#148; Here is the effect of a &#147;broker non-vote&#148;: </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B><I>Proposal 1: </I></B><I>Elect Three Directors</I>. A broker non-vote would have no effect on the outcome of this proposal because only a plurality of votes cast is required to
elect a director. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B><I>Proposal 2: </I></B><I>Ratify Appointment of Independent Auditors</I>. A broker non-vote would have no effect on the outcome of this proposal. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B><I>Quorum: </I></B>Broker non-votes and abstentions will be counted for purposes of determining whether a quorum is present at the Annual Meeting. </FONT></TD></TR></TABLE> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Vote by AsheCo, MHC </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As indicated above and under
&#147;Security Ownership of Certain Beneficial Owners,&#148; AsheCo, MHC owns approximately 51.2% of the shares of common stock entitled to vote at the Annual Meeting. AsheCo, MHC has indicated to AF Financial Group that it intends to vote its
shares of common stock &#147;FOR&#148; the election of AF Financial Group&#146;s nominees for director and &#147;FOR&#148; the ratification of the appointment of the independent auditors, thereby ensuring a quorum at the Annual Meeting, the
likelihood of the election of the nominees for director and the ratification of the appointment of the independent auditors. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-2- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Revoking Your Proxy </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">You may revoke your proxy at any time before it is exercised by: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Filing a letter with the Secretary of AF Financial Group revoking the proxy; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Submitting another signed proxy with a later date; or </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attending the Annual Meeting and voting in person, provided you file a written revocation with the Secretary of the Annual Meeting prior to the voting of such proxy.
</FONT></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Solicitation of Proxies </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">AF Financial Group will pay the costs of soliciting proxies from its shareholders. Directors, officers or employees of AF Financial Group, none of whom are compensated for their solicitations, may solicit proxies by: </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">mail; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">telephone; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">other forms of communication. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We will also reimburse
persons, firms and corporations holding shares in their names or in the name of their nominees, which are beneficially owned by others, for the expenses they incur in forwarding the proxy materials to and obtaining proxies from such beneficial
owners. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Obtaining an Annual Report on Form 10-KSB </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Annual Reports on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form 8-K and all amendments to those reports are available free of charge from AF Financial Group&#146;s internet site,
www.afgrp.com, by clicking on &#147;About AF Financial&#148; on the homepage, proceeding to &#147;Investor Relations&#148; and then to &#147;Reports filed with the SEC.&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We have enclosed with this Proxy Statement a copy of our Annual Report on Form 10-KSB for the fiscal year ended June&nbsp;30, 2006, which we have filed
with the Securities and Exchange Commission (&#147;SEC&#148;). As noted above the Form 10-KSB is also available on the AF Financial Group&#146;s website. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-3- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Principal Shareholders of AF Financial Group </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The
following table contains common stock ownership information for persons known to AF Financial Group who &#147;beneficially own&#148; 5% or more of AF Financial Group&#146;s common stock as of June&nbsp;30, 2006. In general, beneficial ownership
includes those shares that a person has the power to vote, sell, or otherwise dispose of. Beneficial ownership also includes that number of shares which an individual has the right to acquire within 60 days (such as stock options) of the date this
table was prepared. Two or more persons may be considered the beneficial owner of the same share. We obtained the information provided in the following table from filings with the SEC and with AF Financial Group. In this Proxy Statement,
&#147;voting power&#148; is the power to vote or direct the voting of shares, and &#147;investment power&#148; includes the power to dispose or direct the disposition of shares. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="18%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD WIDTH="62%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Title of Class</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"><B>Name&nbsp;and&nbsp;Address</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
FACE="Times New Roman" SIZE="1"><B>of&nbsp;Beneficial&nbsp;Owner</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Amount of</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Beneficial</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Ownership</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Percent&nbsp;of&nbsp;Shares</B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>of&nbsp;Common&nbsp;Stock</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="1"><B>Outstanding</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Common Stock, $.01 par value</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">AsheCo, MHC</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">21 East Ashe Street</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2">West Jefferson, NC 28694</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">538,221</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">51.2</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Security Ownership of Directors and Executive Officers </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following table shows the number of shares of AF Financial Group&#146;s common stock beneficially owned by each director and executive officer, and
all directors and executive officers of AF Financial Group as a group, as of September&nbsp;18, 2006. Except as otherwise indicated in the footnotes, each person and each group shown in the table has sole voting and investment power with respect to
the shares of common stock listed next to their name. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD WIDTH="53%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Name</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="1"><B>Position</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Amount&nbsp;and&nbsp;Nature<BR>of Beneficial<BR>Ownership(1)(2)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Percent of<BR>Common&nbsp;Stock<BR>Outstanding(3)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Wayne R. Burgess</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">8,528</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(4)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Jan R. Caddell</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director, Vice Chairman of the Board of Directors</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">7,269</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(5)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Kenneth R. Greene</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">6,380</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Claudia L. Kelley, Ph.D.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">200</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Melanie P. Miller</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Executive Vice President, Secretary, Treasurer and Chief Financial Officer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">18,032</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">1.7</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Donald R. Moore</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">460</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Jimmy D. Reeves</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director, Chairman of the Board of Directors</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">9,150</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(6)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Jerry L. Roten</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">4,889</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Michael M. Sherman</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">853</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Robert E. Washburn</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director, President and Chief Executive Officer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">620</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">*</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">John D. Weaver</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Former Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">8,269</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(7)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><U>*</U></FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><U></U>&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">All directors and executive<BR>officers&nbsp;as&nbsp;a&nbsp;group&nbsp;(11&nbsp;persons)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">94,373</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">8.9</FONT></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">%</FONT></TD></TR>
</TABLE><HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="51%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">*&nbsp;&nbsp;Less than one percent of outstanding common stock of AF Financial Group. </FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><I>(footnotes&nbsp;begin&nbsp;on&nbsp;following&nbsp;page)</I></FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-4- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The figures shown for Mr.&nbsp;Washburn and Ms.&nbsp;Miller include 220 and 1,829 shares, respectively, held in trust by AF Bank, as trustee (the &#147;Trustee&#148;), pursuant to
the Employee Stock Ownership Plan of AF Bank (the &#147;ESOP&#148;). These shares have been allocated to the accounts of Mr.&nbsp;Washburn and Ms.&nbsp;Miller under the ESOP and they have voting power, but no investment power, except in limited
circumstances with respect to these shares. The figure shown for all directors and executive officers as a group includes the shares allocated to the accounts of Mr.&nbsp;Washburn and Ms.&nbsp;Miller under the ESOP. Such figure also includes 29,723
shares allocated to the accounts of other participants in the ESOP (the &#147;Allocated Shares&#148;). With regard to the Allocated Shares, the participants have the right to direct the Trustee how to vote those shares. If any participants fail to
direct the Trustee how to vote their Allocated Shares, the Trustee will vote those shares in a manner calculated to most accurately reflect the instructions received by the Trustee from all participants who did provide voting directions, so long as
such vote is in accordance with the provisions of the Employee Retirement Income Security Act of 1974, as amended (&#147;ERISA&#148;) and the Trustee&#146;s fiduciary duties thereunder. AF Bank&#146;s Compensation Committee (consisting of Messrs.
Greene, Burgess and Roten) serves as the ESOP Committee (the &#147;ESOP Committee&#148;) and has no voting power with respect to the Allocated Shares. The Trustee and the ESOP Committee have shared investment power with regard to the Allocated
Shares. Except for the shares allocated to their individual accounts, the executive officers disclaim beneficial ownership of the shares held in the ESOP, and each member of the Board of Directors disclaims beneficial ownership of the shares held in
the ESOP. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes 969 shares of common stock which may be acquired by Mr.&nbsp;Burgess, Mr.&nbsp;Caddell, Mr.&nbsp;Roten and Mr.&nbsp;Weaver pursuant to vested options granted to them under
the Ashe Federal Bank 1997 Stock Option Plan (the &#147;Stock Option Plan&#148;) and 387 and 193 shares of common stock which may be acquired by Mr.&nbsp;Reeves and Mr.&nbsp;Sherman respectively. Mr.&nbsp;Moore, Dr.&nbsp;Kelley, Mr.&nbsp;Greene and
Mr.&nbsp;Washburn do not have any stock options. Also includes 3,895 shares of common stock which Ms.&nbsp;Miller may acquire pursuant to vested options granted under the Stock Option Plan. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Percentages with respect to each person or group of persons have been calculated on the basis of 1,050,804 shares of common stock, the total number of shares of AF Financial
Group&#146;s common stock outstanding as of September&nbsp;18, 2006, plus the number of shares of common stock which such person or group has the right to acquire within 60 days after September&nbsp;18, 2006. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes 5,000 shares held jointly with Mr.&nbsp;Burgess&#146;s spouse and 50 shares held as custodian for a minor child. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes 4,000 shares held jointly with Mr.&nbsp;Caddell&#146;s spouse. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(6)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes 500 shares held as custodian for Mr.&nbsp;Reeves&#146; minor children. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(7)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes 5,000 shares held jointly with Mr.&nbsp;Weaver&#146;s spouse </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-5- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>DISCUSSION OF PROPOSALS RECOMMENDED BY BOARD </B></FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>PROPOSAL 1 </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ELECTION OF DIRECTORS </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE
COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>General </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">AF Financial&#146;s
Board of Directors currently consists of nine members. John D. Weaver retired from serving on the Board of Directors of AF Financial Group and AF Bank on November&nbsp;7, 2005. AF Financial&#146;s Federal Stock Charter and Bylaws provide that the
Board of Directors will be divided into three classes, as nearly equal in number as possible. The terms of three directors expire at the Annual Meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">The Nominating Committee has nominated three persons for election as directors at the Annual Meeting. Each nominee is currently serving on AF Financial Group&#146;s Board of Directors. If you elect the nominees, they
will hold office until the Annual Meeting in 2009, or until their successors have been elected. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We know of no reason why any nominee may
be unable to serve as a director. If any nominee is unable to serve, your proxy may vote for another nominee proposed by the Nominating Committee. If for any reason these nominees prove unable or unwilling to stand for election, the Nominating
Committee will nominate alternates or the Board will reduce the size of the Board of Directors to eliminate the vacancy. The Board has no reason to believe that its nominees would prove unable to serve if elected. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following table shows for each nominee and continuing director his or her name, age as of June&nbsp;30, 2006, principal occupation during the last
five years, the year his or her existing term expires, and the year he or she was first elected director. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>NOMINEES FOR TERM ENDING AS
OF 2009 ANNUAL MEETING </U></B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="27%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD WIDTH="43%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Name (Age)(1)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Position(s)</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Held</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"><B>Principal Occupation</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
FACE="Times New Roman" SIZE="1"><B>During Last Five Years</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Existing</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Term</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Expires</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Director</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>of&nbsp;Company</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Since (2)</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Jan R. Caddell (66)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director,&nbsp;Vice</FONT><br><FONT FACE="Times New Roman" SIZE="2">Chairman&nbsp;of&nbsp;the</FONT><br><FONT FACE="Times New Roman" SIZE="2">Board</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">President and General Manager of Caddell Broadcasting, Inc. and its commercial radio station, WKSK 1978 to present</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2006</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1981</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Claudia L. Kelley, Ph.D. (54)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Certified public accountant and Professor of Accounting at Appalachian State University July 2006 to present; Associate Professor of Accounting at Appalachian State University 2000 to
2006</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2006</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2003</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Kenneth R. Greene (58)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Principal owner of Builders Mart of Ashe, Inc and Laurel Custom Homes, Inc; Over 26 years of experience in the concrete sales and building-supply business</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2006</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1988</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>The Board of Directors unanimously recommends a vote &#147;For&#148; all of the nominees for
election as directors </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-6- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>DIRECTORS CONTINUING IN OFFICE </U></B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="27%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD WIDTH="43%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Name (Age)(1)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Position(s)</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Held</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"><B>Principal Occupation</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
FACE="Times New Roman" SIZE="1"><B>During Last Five Years</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Existing</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Term</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Expires</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Director</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>of&nbsp;Company</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Since (2)</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Jimmy D. Reeves (57)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director,</FONT><br><FONT FACE="Times New Roman" SIZE="2">Chairman&nbsp;of&nbsp;the<BR>Board</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Partner at the law firm of Vannoy &amp; Reeves, PLLC 1975 to present; Vice President of Yadkin Valley Pontiac-Buick-Oldsmobile-GMC, Inc.; Serves
in various capacities for several real estate development businesses;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2">Chairman of the Board since July 2004</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2001</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Jerry L. Roten (60)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Clerk of the Superior Court of Ashe County for the past 20 years</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1992</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Michael M. Sherman (46)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">President and Chief Executive Officer of Zibra, LLC a consumer products company 2003 to present; President of Pentair Accessory Group, a division of the Pentair Tools Group, 2002 to 2003;
President of The Oldham Company 1992 to 2003</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2007</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2001</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Wayne R. Burgess (65)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Part-owner, Vice President and Manager of Burgess Furniture of West Jefferson, North Carolina, positions he has held for over 36 years</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2008</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1989</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Donald R. Moore (52)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Owns and operates a McDonald&#146;s Restaurant in West Jefferson, North Carolina 1995 to present</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2008</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2001</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Robert E. Washburn (48)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Director,</FONT><br><FONT FACE="Times New Roman" SIZE="2">President and</FONT><br><FONT FACE="Times New Roman" SIZE="2">Chief Executive</FONT><br><FONT FACE="Times New Roman"
SIZE="2">Officer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">President and Chief Executive Officer of AF Financial Group and AF Bank November 2004 to present; City Executive for High Country Bank a Division of Yadkin Valley Bank and Trust Company 2004;
Chief Credit Officer for High Country Bank 1998 to 2003</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2008</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2005</FONT></TD></TR>
</TABLE><HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">As of June&nbsp;30, 2006. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes term as a director of AF Bank. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-7- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>INFORMATION ABOUT BOARD OF DIRECTORS AND MANAGEMENT </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Board of Directors </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Board of Directors oversees
our business and monitors the performance of our management. In accordance with our corporate governance procedures, the Board of Directors does not involve itself in the day-to-day operations of AF Financial. AF Financial&#146;s executive officers
and management oversee the day-to-day operations of AF Financial. The directors fulfill their duties and responsibilities by attending regular meetings of the Board, which are held on a monthly basis and committees of the board. The directors also
discuss business and other matters with the Chief Executive Officer, other key executives, and our principal external advisers (legal counsel, auditors, financial advisors and other consultants). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">AF Financial&#146;s Board of Directors held 15 meetings during the fiscal year ended June&nbsp;30, 2006. Each incumbent director attended at least 75% of
the meetings of the Board of Directors plus committee meetings on which that particular director served during this period. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Committees of the Board
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Board of Directors of AF Financial maintains committees, the nature and composition of which are described below. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Nominating and Corporate Governance Committee</I>. During 2006, the Nominating and Corporate Governance Committee was comprised of Directors Reeves,
Roten and Sherman. The Nominating and Corporate Governance Committee met eight times in the 2006 fiscal year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">All members of the
Nominating and Corporate Governance Committee are independent directors as defined under the Nasdaq Stock Market listing standards. The Committee formulates our corporate governance guidelines and determines the qualification and independence of
directors and committee members. The Committee also considers nominees for election as directors, including written shareholder(s) nominations that comply with the notice procedures set forth in AF Financial&#146;s Bylaws. The Board of Directors has
adopted a written charter for the Nominating and Corporate Governance Committee, a copy of which is available on our website at <U>www.afgrp.com</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">In accordance with AF Financial&#146;s Bylaws, nominations of individuals for election to the Board at an annual meeting of shareholders may be made by any shareholder of record of AF Financial entitled to vote for
the election of directors at such meeting who provides timely notice in writing to the Secretary of AF Financial (the &#147;Secretary&#148;). To be timely, a shareholder&#146;s notice must be delivered to or received by the Secretary no later than
five (5)&nbsp;days prior to the date of the annual meeting. The shareholder&#146;s notice to the Secretary must set forth certain information regarding the proposed nominee and the shareholder making such nomination. If a nomination is not properly
brought before the meeting in accordance with AF Financial&#146;s bylaws, the Chairman of the meeting may determine that the nomination was not properly brought before the meeting and will not be considered. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In identifying and reviewing candidates for the Board, the Corporate Governance and Nominating Committee seeks individuals whose background, knowledge
and experience will assist the Board in furthering the interests of the Company and its shareholders. Some of the factors considered in this evaluation include experience in the areas of banking and finance, accounting and the related businesses of
the Company and AF Bank, as well as, outstanding achievement in his or her personal career, an understanding of the business environment generally, a willingness to devote adequate time to service on the Board of Directors and most importantly
integrity. The Corporate Governance and Nominating Committee reviews the qualifications of, and approves and recommends to the Board, those individuals to be nominated for positions on the Board and submitted to shareholders for election at each
Annual </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-8- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">Meeting. In addition, the Corporate Governance and Nominating Committee will consider nominees for the Board by shareholders that are proposed as described
above. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Jan R. Caddell, Claudia L. Kelley, Ph.D. and Kenneth R. Greene were each nominated by the non-management, independent directors
that comprise the Nominating and Corporate Governance Committee. As of October&nbsp;11, 2006, the Committee had not received any shareholder recommendations for nominees in connection with the 2006 Annual Meeting. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Compensation Committee</I>. The Compensation Committee meets periodically to review the performance of and to make recommendations to the Board
regarding the compensation of AF Financial&#146;s Chief Executive Officer and directors. The Committee is responsible for all matters regarding compensation and benefits issues for the Chief Executive Officer. Directors Greene, Burgess and Roten
serve as members of the Committee. All members of the Committee are independent directors as defined under the Nasdaq Stock Market listing standards. The Compensation Committee met one time during the 2006 fiscal year. The Board of Directors has
adopted a written charter for the Compensation Committee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Audit Committee</I>. The Audit Committee of the Board of Directors consists
of Dr.&nbsp;Kelley, Chair, Mr.&nbsp;Caddell and Mr.&nbsp;Moore. The Board of Directors has determined that these directors are &#147;independent&#148; as defined in Rule 4200(a)(15) of the NASD&#146;s listing standards and the Sarbanes-Oxley Act of
2002 and the SEC&#146;s rules and regulations. The Audit Committee oversees and monitors AF Financial&#146;s financial reporting process and internal control system, reviews and evaluates the audit performed by AF Financial&#146;s outside auditors
and reports any substantive issues found during the audit to the Board and reviews and evaluates the internal audit program. The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of our independent
auditors. The committee also reviews and approves all transactions with affiliated parties. The Board of Directors has adopted a written charter for the Audit Committee which is attached as <U>Appendix A</U> to this proxy statement. Dr.&nbsp;Claudia
Kelley received her Bachelor of Science in accounting from Waynesburg College, Masters of Accountancy from the University of Illinois and her Ph.D. and Masters of Taxation from the University of Alabama. Based on her educational and professional
credentials and financial background, the Board believes that Director Kelly qualifies as an &#147;Audit Committee Financial Expert&#148; as that term is defined by applicable SEC rules and has been so designated by the Board of Directors. The Audit
Committee met 13 times in the 2006 fiscal year. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-9- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Audit Committee Report </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>AF FINANCIAL GROUP&#146;S AUDIT COMMITTEE REPORT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>The following Audit Committee Report is
provided in accordance with the rules and regulations of the SEC. Pursuant to such rules and regulations, this report shall not be deemed &#147;soliciting materials,&#148; filed with the SEC, subject to Regulation 14A or 14C of the SEC or subject to
the liabilities of section 18 of the Securities Exchange Act of 1934, as amended. </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The purpose of the Audit Committee is to oversee the
accounting and financial reporting processes of AF Financial Group and the financial statements of AF Financial Group. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Audit Committee
reviewed with AF Financial Group&#146;s internal auditors and independent auditors the overall scope and plans for their respective audits and the results of internal audit examinations. The Committee also discussed with management, the internal
auditors and the independent auditors the quality and adequacy of AF Financial Group&#146;s internal controls and the overall quality of AF Financial Group&#146;s financial reporting process. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Audit Committee reviewed and discussed interim financial information contained in each quarterly report and earnings announcement with management and
independent auditors prior to public release as necessary. The Committee reviewed the audited consolidated financial statements of AF Financial Group as of and for the year ended June&nbsp;30, 2006, with management and the independent auditors.
Management has the responsibility for the preparation of AF Financial Group&#146;s consolidated financial statements and the independent auditors have the responsibility for the audit of those statements. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Audit Committee has discussed the matters required by Statement on Auditing Standards No.&nbsp;61 (Communication with Audit Committees), as amended,
with Dixon Hughes PLLC (&#147;Dixon Hughes&#148;). The Audit Committee has also received the written disclosures and the letter from Dixon Hughes required by Independence Standards Board Standard No.&nbsp;1 (Independence Standards Board Standard
No.&nbsp;1, Independence Discussions with Audit Committees), as may be modified or supplemented, and has discussed with Dixon Hughes its independence. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Based on the foregoing discussions, the Audit Committee recommended to the Board of Directors of AF Financial Group that the audited consolidated financial statements be included in AF Financial Group&#146;s Annual
Report on Form 10-KSB for the year ended June&nbsp;30, 2006. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Audit Committee of AF Financial Group</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"><FONT SIZE="">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>Claudia L. Kelley, Ph.D. (Chair)</I></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>Jan R. Caddell</I></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>Donald R. Moore</I></FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-10- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Principal Accountant Services </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">AF Financial Group&#146;s independent registered public accounting firm for the year ended June&nbsp;30, 2006, was Dixon Hughes PLLC (&#147;Dixon Hughes&#148;), which has also been retained by the Audit Committee as
AF Financial Group&#146;s independent registered public accounting firm for the year ended June&nbsp;30, 2007. A representative of Dixon Hughes is expected to attend the AF Financial Group Annual Meeting and will be afforded an opportunity to make a
statement, if they so desire, and to respond to appropriate questions from shareholders. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Audit Fees </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Audit fees include fees billed to AF Financial Group by Dixon Hughes in connection with the annual audit of AF Financial Group&#146;s financial statements
and review of AF Financial Group&#146;s interim financial statements. The aggregate fees billed or expected to be billed to AF Financial Group by Dixon Hughes for audit services rendered to AF Financial Group for the fiscal years ended June&nbsp;30,
2006 and 2005 are $75,000 and $55,500, respectively. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Audit-Related Fees </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Audit related services consist principally of accounting consultations. The aggregate fees billed to AF Financial Group by Dixon Hughes for audit-related
services for the fiscal years ended June&nbsp;30, 2006 and 2005 were $11,485 and $9,747, respectively. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Tax Fees </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Tax fees include corporate tax compliance, as well as counsel and advisory services. The aggregate fees billed to AF Financial Group by Dixon Hughes for
tax related services for the fiscal years ended June&nbsp;30, 2006 and 2005 were $15,415 and $12,914, respectively. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>All Other Fees </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">All other fees were principally related to non-audit related consultations. There were no additional fees billed to AF Financial Group by Dixon Hughes
during the fiscal year ended June&nbsp;30, 2006. The aggregate fees billed to AF Financial Group by Dixon Hughes for all other fees for the fiscal year ended June&nbsp;30, 2005 were $330. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Pre-Approval of Audit and Permissible Non-Audit Services </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">All audited-related services, tax services and other services rendered in 2006 and 2005 were pre-approved by the Audit Committee, which concluded that the provision of those services by Dixon Hughes was compatible with the maintenance of
that firm&#146;s independence in the conduct of its auditing functions. The Audit Committee&#146;s charter provides for pre-approval of all audit and non-audit services to be provided by the Company&#146;s independent auditor. The charter authorizes
the Audit Committee to delegate to one or more of its members pre-approval authority with respect to permitted services, provided that any approvals using this procedure are presented to the Audit Committee at its next scheduled meeting. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Directors&#146; Compensation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Director&#146;s
Fees. </I>Currently, each non-employee director of AF Financial Group receives an annual retainer of $5,000 if the director attends a minimum of 75% of the aggregate number of Board and committee meetings called during the year. Each non-employee
director also received fees of $800 per month and $250 per committee meeting attended. In addition, the chairman of each committee received an additional $50 per committee meeting attended. Total fees paid for fiscal 2006 were $148,350. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-11- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Retirement Plans. </I>AF Financial Group adopted a nonqualified Retirement Plan for Board Members of
AF Financial Group (the &#147;Directors&#146; Retirement Plan&#148;), which provide benefits to each eligible outside director commencing on his or her termination of Board service at or after age 65. Each outside director automatically becomes a
participant in the Directors&#146; Retirement Plan. An eligible outside director retiring at or after age 65 will be paid an annual retirement benefit equal to the annual rate of retainer paid to outside directors immediately prior to his or her
termination of Board service, multiplied by a fraction, the numerator of which is the number of his years of service as an outside director (including service as a director or trustee of AF Financial Group or any predecessor) not in excess of 10
years and the denominator of which is 10. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Recognition and Retention Plan and Stock Option Plan. </I>In addition, AF Financial
Group&#146;s directors are eligible to participate in the Stock Option Plan and Recognition and Retention Plan. These stock benefit plans are discussed under &#147;Certain Employee Benefit Plans and Employment Agreements,&#148; &#147;Stock Option
Plan&#148; and &#147;Recognition and Retention Plan.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Shareholder Communications with the Board of Directors </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Shareholders may communicate in writing with the Board of Directors or any individual director(s) by sending such written communication to the following
address: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Board of Directors</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">c/o Melanie Paisley Miller</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT
FACE="Times New Roman" SIZE="2">AF Financial Group</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">21 East Ashe Street</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">P.O. Box 26</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT
FACE="Times New Roman" SIZE="2">West Jefferson, North Carolina 28694-0026</FONT></P></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Any written communications received will be forwarded unopened to the Board or the
appropriate director(s). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Attendance at Annual Meetings </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">AF Financial Group encourages, but does not require, the attendance of the members of the Board at its Annual Meetings. Nine directors attended the 2005 Annual Meeting. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Executive Officers </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following individuals are
executive officers of AF Financial Group and holds the offices set forth opposite their name. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="23%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="63%"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Name</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Age</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="1"><B>Position and Occupations During Last Five Years</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Robert E. Washburn</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">48</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Director, President and Chief Executive Officer of AF Financial Group and AF Bank November 2004 to present; City Executive for High Country Bank a Division of Yadkin Valley Bank and Trust
Company 2004; Chief Credit Officer for High Country Bank 1998 to 2003</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Melanie Paisley Miller</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">35</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Executive Vice President, Secretary, Treasurer and Chief Financial Officer of AF Financial Group and AF Bank 1998 to present</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-12- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Board of Directors elects the executive officers of AF Financial Group annually. The elected officers
hold office until their respective successors have been elected and qualified, or until death, resignation or removal by the Board of Directors. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>Executive Compensation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following table sets forth the compensation paid by AF Financial Group and its subsidiaries for
services rendered in all capacities during the fiscal years ended June&nbsp;30, 2006, 2005 and 2004 to the President and Chief Executive Officer and Executive Vice President, Secretary, Treasurer and Chief Financial Officer of AF Financial Group.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Summary Compensation Table </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="43%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" ROWSPAN="3"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Name and Principal Positions</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9" ROWSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Annual Compensation</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="8" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Long Term Compensation</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Awards</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Payouts</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>All Other<BR>Compensation<BR>($)</B></FONT></TD>
<TD VALIGN="bottom" ROWSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Year</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Salary</B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>($)(1)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Bonus($)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Other<BR>Annual<BR>Compensation<BR>($)(2)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Restricted<BR>Stock<BR>Awards<BR>($)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Options<BR>(#)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>LTIP<BR>Payouts<BR>($)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Robert E. Washburn<BR><I>Director, President and Chief Executive Officer</I></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2006</FONT><br><FONT FACE="Times New Roman" SIZE="2">2005</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">139,528</FONT><br><FONT FACE="Times New Roman" SIZE="2">85,300</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">9,001</FONT><br><FONT FACE="Times New Roman" SIZE="2">1,747</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(3)</FONT><br><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Melanie Paisley Miller<BR><I>Executive Vice President, Secretary, Treasurer and Chief Financial Officer</I></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">2006</FONT><br><FONT FACE="Times New Roman" SIZE="2">2005</FONT><br><FONT FACE="Times New Roman" SIZE="2">2004</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">108,215</FONT><br><FONT FACE="Times New Roman" SIZE="2">103,770</FONT><br><FONT FACE="Times New Roman" SIZE="2">106,827</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">12,500</FONT><br><FONT FACE="Times New Roman" SIZE="2">3,500</FONT><br><FONT FACE="Times New Roman" SIZE="2">10,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT><br><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">8,334</FONT><br><FONT FACE="Times New Roman" SIZE="2">10,246</FONT><br><FONT FACE="Times New Roman" SIZE="2">6,381</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">(3)</FONT><br><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT><br><FONT FACE="Times New Roman" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE><HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Includes amounts, if any, deferred pursuant to Section&nbsp;401(k) of the Internal Revenue Code (&#147;Code&#148;) under AF Bank&#146;s 401(k) Plan. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">AF Financial Group provides its executive officers with non-cash benefits and perquisites. AF Financial Group believes that the aggregate value of these benefits for fiscal 2006 did
not, in the case of any named executive officer, exceed $50,000 or 10% of the aggregate salary and bonus reported for him or her in the Summary Compensation Table. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">For Mr.&nbsp;Washburn and Ms.&nbsp;Miller, respectively, this figure includes (i)&nbsp;an allocation with a total market value of $2,437 and $2,806 as of June&nbsp;30, 2006; and
(ii)&nbsp;a matching contribution of $4,351 and $3,664 and profit-sharing contribution of $2,213 and $1,864 for fiscal year ended June&nbsp;30, 2006 under the 401(k) plan for the benefit of Mr.&nbsp;Washburn and Ms.&nbsp;Miller, respectively.
</FONT></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Certain Employee Benefit Plans </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">Salary Continuation Agreement. AF Financial Group has entered into a Salary Continuation Agreement with Ms.&nbsp;Miller. Under this agreement, Ms.&nbsp;Miller is guaranteed monthly payments equal to $5,532, after retirement for a period of
forty-three years. The amount of these payments may be increased for service to AF Financial Group after the retirement date for the Senior Executive (as defined in the agreements). This agreement also provides for benefits upon death, disability, a
change of control and early retirement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Employee Stock Ownership Plan and Trust. </I>AF Financial Group has established and adopted,
for the benefit of eligible employees, an ESOP and related trust. All salaried employees of AF Bank, AF Financial Group and subsidiaries are eligible to become participants in the ESOP. The ESOP purchased 36,942 shares of common stock issued in
connection with the formation of AsheCo, MHC and the related public offering (the &#147;MHC Reorganization&#148;). In order to fund the ESOP&#146;s purchase of such common stock, the ESOP borrowed funds from an unaffiliated lender equal to the
balance of the aggregate purchase price of the common stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-13- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Shares purchased by the ESOP were pledged as collateral for the loan, and were held in a suspense account
until released for allocation among participants in the ESOP as the loan was repaid. The pledged shares have been released from the suspense account and the loan has been paid in full. The released shares have been allocated among the accounts of
participants on the basis of the participants&#146; compensation for the year of allocation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The ESOP Committee, which is currently
comprised of members of the Compensation Committee, may instruct the trustee regarding investment of funds contributed to the ESOP. The ESOP trustee, subject to its fiduciary duty, must vote all allocated shares held in the ESOP in accordance with
the instructions of the participating employees. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-14- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Stock Option Plan </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">The Stock Option Plan was adopted by the Board of Directors of AF Bank and approved by AF Bank&#146;s shareholders at the 1997 Annual Meeting. AF Financial Group assumed sponsorship of the Stock Option Plan in the MHC
Reorganization. The purpose of the Stock Option Plan is to promote the growth of AF Financial Group, AF Bank and other affiliates by linking the incentive compensation of officers, key executives and directors with the profitability of AF Financial
Group. The Stock Option Plan is not subject to ERISA and is not a tax-qualified plan. AF Financial Group has an aggregate of 13,604 shares of common stock for issuance upon the exercise of stock options granted under the Plan. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following table sets forth the number and value of unexercised stock options held by Ms.&nbsp;Miller. The value of an unexercised, in-the-money
option at fiscal year-end is the difference between its exercise or base price and the fair market value of the underlying stock on the last trading day of the fiscal year ended June&nbsp;30, 2006 for AF Financial Group. On that date, the price was
$19.00 per share, based on the closing price of AF Financial Group&#146;s common stock as reported on the OTC Bulletin Board. Since the market value of AF Financial Group common stock was higher than the exercise price of the options held by
Ms.&nbsp;Miller, the options were in-the-money at fiscal year-end. No stock options were exercised by Ms.&nbsp;Miller during the fiscal year ended June&nbsp;30, 2006. The table below reflects stock options as of June&nbsp;30, 2006. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Aggregated Options/Exercises in 2006 Fiscal Year and 2006 Fiscal Year-End Options </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="60%"></TD>
<TD VALIGN="bottom" WIDTH="14%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="14%"></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-right:0px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Name</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="1"><B>Number&nbsp;of&nbsp;Securities<BR>Underlying&nbsp;Unexercised<BR>Options/SARs at
Fiscal<BR>Year-End<BR>(#)<BR>Exercisable/Unexercisable</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT FACE="Times New Roman"
SIZE="1"><B>Value&nbsp;of&nbsp;Unexercised<BR>In-the-Money<BR>Options/SARs&nbsp;at&nbsp;Fiscal<BR>Year-End(1)<BR>($)<BR>Exercisable/Unexercisable</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Melanie Paisley Miller<BR><I>Executive Vice President, Secretary,<BR></I><I>Treasurer and Chief Financial Officer</I></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">3,895/0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">1,948/0</FONT></TD></TR>
</TABLE><HR WIDTH="8%" SIZE="1" NOSHADE COLOR="#000000" ALIGN="left">
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The closing price per share of common stock on June&nbsp;30, 2006 was $19.00, and all options have an exercise price of $18.50 per share, and as such, all options are
&#147;in-the-money.&#148; </FONT></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Recognition and Retention Plan </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Ashe Federal Bank 1997 Recognition and Retention Plan (the &#147;RRP&#148;) was maintained to grant awards of restricted stock to officers and outside
directors. All awards under the RRP have vested and no shares of AF Financial are currently reserved to the RRP for grants in the future. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Transactions
with Certain Related Persons </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Financial Institutions Reform, Recovery and Enforcement Act of 1989 requires that all loans or
extensions of credit to executive officers and directors must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the general public and must not involve
more than the normal risk of repayment or present other unfavorable features. AF Bank makes loans to executive officers, directors and their affiliates that are no more favorable then those made to general public. These insider loans are made in the
ordinary course of business and do not involve more than the normal risk of collectibility or present unfavorable features. AF Bank intends that any transactions in the future between AF Bank and its executive officers, directors, holders of 10% or
more of the shares of any class of its common stock and affiliates thereof, will contain terms no less favorable to AF Bank than could have been obtained by it in arm&#146;s-length negotiations with </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-15- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">unaffiliated persons and will be approved by a majority of independent outside directors of AF Bank not having any interest in the transaction. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Mr.&nbsp;Jimmy&nbsp;D. Reeves, Chairman of the Board of Directors of AF Financial Group and AF Bank, is a partner in the law firm of Vannoy&nbsp;&amp;
Reeves, PLLC. His firm acts as counsel to AF Bank from time to time. The legal fees received by the law firm from professional services rendered to AF Bank during the year ended June&nbsp;30, 2006 did not exceed five percent of the firm&#146;s gross
revenues. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Section&nbsp;16(a) Beneficial Ownership Reporting Compliance </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;16(a) of the Exchange Act requires that AF Financial Group&#146;s directors, executive officers, and any person holding more than ten percent
of AF Financial Group&#146;s common stock file with the SEC reports of ownership changes, and that such individuals furnish AF Financial Group with copies of the reports. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons, AF Financial Group believes that all of our executive officers and directors complied
with all Section&nbsp;16(a) filing requirements applicable to them. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-16- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>PROPOSAL 2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>RATIFICATION OF APPOINTMENT OF </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>INDEPENDENT AUDITORS </B></FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Audit Committee has appointed
Dixon Hughes as our independent auditors for AF Financial Group for the fiscal year ending June&nbsp;30, 2007, and we are asking shareholders to ratify the appointment. A representative of Dixon Hughes is expected to be present at the Annual
Meeting, will have the opportunity to make a statement at the Annual Meeting if he or she so wishes, and will be available to respond to appropriate questions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Dixon Hughes served as AF Financial Group&#146;s independent auditors for the fiscal years ended June&nbsp;30, 2006 and June&nbsp;30, 2005. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>The Board of Directors unanimously recommends a vote &#147;For&#148; the </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ratification of the
appointment of Dixon Hughes PLLC, as </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>independent auditors for AF Financial Group. </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-17- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ADDITIONAL INFORMATION </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2"><B>Information About Shareholder Proposals </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">It is presently anticipated that the 2007 Annual Meeting of
Shareholders will be held in November 2007. In order for stockholder proposals to be included in the proxy materials for that meeting, such proposals must be received by the Secretary of the Company at the Company&#146;s corporate offices (21 East
Ashe Street, West Jefferson North Carolina) not later than June&nbsp;11, 2006, and meet all other applicable requirements for inclusion in the proxy statement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">In the alternative, a shareholder may commence his own proxy solicitation subject to the SEC&#146;s rules on proxy solicitation and may present a proposal from the floor at the 2007 Annual Meeting of Shareholders. In
order to do so, the shareholder must notify the Secretary of the Company, in writing, of his or her proposal at the Company&#146;s main office no later than August&nbsp;25, 2006. If the Secretary of the Company is not notified of the
shareholder&#146;s proposal by August&nbsp;25, 2006, the Board of Directors may vote on the proposal pursuant to the discretionary authority granted by the proxies solicited by the Board of Directors for the 2006 Annual Meeting. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">SEC rules contain standards as to what shareholder proposals are required to be in the proxy statement. Any such proposal will be subject to 17 C.F.R.
&#167;240.14a-8 of the rules and regulations promulgated by the SEC. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="43%" BORDER="0">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By Order of the Board of Directors,</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">

<IMG SRC="g48862img4.jpg" ALT="LOGO"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Melanie Paisley Miller</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>Executive Vice President</I></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>Secretary, Treasurer</I></FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2"><I>and Chief Financial Officer</I></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">West Jefferson, North Carolina</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">October&nbsp;11, 2006</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>To ensure that your shares are represented at the Annual Meeting, PLEASE complete, sign, date
and promptly return the accompanying proxy card in the postage-paid envelope provided. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-18- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B><U>Appendix A </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>AUDIT COMMITTEE CHARTER OF AF FINANCIAL GROUP </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><U>Objective </U></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The objective of an Audit Committee (&#147;Committee&#148;) is to assist the directors in fulfilling their fiduciary responsibilities in connection with
financial objectives, operations and procedures. The Committee in this document refers to the Audit Committees of AF Financial Group and AF Bank. Members of the Committee should evaluate both AF Financial Group and AF Bank&#146;s compliance with
laws, regulations, policies, plans, procedures, ethical standards and public responsibilities. The Committee should determine that AF Financial Group and AF Bank have adequate administrative, operating and internal accounting controls. In addition,
the Committee should seek to give assurance regarding the integrity of financial and other data based on AF Financial Group and AF Bank activities. The Committee&#146;s main purpose is to oversee the accounting and financial reporting processes of
AF Financial Group and AF Bank and the audits of the financial statements of AF Financial Group and AF Bank, including the qualifications and independence of the auditors. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Responsibilities and Authority </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2"><U>Responsibilities Relating to Retention of Public Accounting Firms and Relationship with Auditor </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall be directly responsible for appointing, compensating, overseeing, evaluating, and terminating the independent auditor (including resolving disagreements between
management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report and related work, subject to shareholder ratification. The accounting firm shall report directly to the Committee.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><U>Preapproval of Services</U> - The Committee shall preapprove all auditing services and permitted non-audit services (including the fees and terms) to be performed for AF
Financial Group by its independent auditor, subject to the de minimis exceptions for non-audit services described below which are approved by the Committee prior to completion of the audit. </FONT></TD></TR></TABLE> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"><U>Exception</U>: The preapproval requirement set forth above, shall not be applicable with respect to non-audit services if: </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="7%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by AF Financial Group to its auditor during the fiscal
year in which the services are provided: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="7%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Such services were not recognized by AF Financial Group at the time of the engagement to be non-audit services; and </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="7%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by one or more members of the Committee
who are members of the board of directors to whom authority to grant such approvals has been delegated by the Committee. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman"
SIZE="2"><U>Delegation</U> - The Committee may delegate to one or more designated members of the Committee the authority to grant required preapprovals. The decisions of any member to whom authority is delegate under this paragraph to preapprove any
activities under this subsection shall be presented to the full Committee at its next scheduled meeting. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-19- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall obtain a formal written statement concerning the independence of the independent auditor. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall serve as the primary communication channel between the internal and external auditors and Board of Directors, and assure that the independent auditors have free
access to the Committee, without the presence of management, to discuss the results of their audits. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall obtain and review a report from the independent auditor at least annually regarding (a)&nbsp;the independent auditor&#146;s internal quality-control procedures;
(b)&nbsp;any material issues raised by: (i)&nbsp;the most recent internal quality-control review, (ii)&nbsp;the most recent peer review of the firm, or (iii)&nbsp;by any inquiry or investigation by governmental or professional authorities within the
preceding five years concerning one or more independent audits carried out by the firm; (c)&nbsp;any steps taken to deal with any such issues; and (d)&nbsp;all relationships, both direct and indirect, between the auditor and AF Financial Group The
Committee shall evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor&#146;s quality controls are adequate and the provision of non-audit services is compatible with
maintaining the auditor&#146;s independence, and taking into account the opinions of management and the internal auditor. The Chairman of the Committee shall present the conclusions to the Board and, if so determined by the Committee, recommend that
the Board take additional action to satisfy itself of the qualifications, performance and independence of the auditor. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the
audit as required by law. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">7.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall recommend to the Board policies for AF Financial Group&#146;s hiring of employees or former employees of the independent auditor who participated in any capacity
in the audit of AF Financial Group </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">8.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall monitor the accomplishments of audit goals and objectives, and evaluate management&#146;s response to audit findings and reports of examinations conducted by
external auditors and regulatory authorities. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Financial Reporting and Disclosure Matters.</U> The
Committee, to the extent it deems necessary or appropriate shall: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management&#146;s discussion and analysis, and
recommend to the Board whether the audited financial statements should be included in AF Financial Group&#146;s Annual Report on Form 10-KSB. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Review and discuss with management and the independent auditor AF Financial Group&#146;s quarterly financial statements prior to the filing of its Form 10-QSB, including the results
of the independent auditor&#146;s review of the quarterly financial statements. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of AF Financial
Group&#146;s financial statements, including any significant changes in AF Financial Group&#146;s selection or application of accounting </FONT>
</P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-20- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P>
<FONT FACE="Times New Roman" SIZE="2">principles, any major issues as to the adequacy of AF Financial Group&#146;s internal controls and any special steps adopted in light of material control
deficiencies. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Review and discuss quarterly reports from the independent auditors on: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="7%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">All critical accounting policies and practices to be used; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="7%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment preferred by the independent auditor; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="7%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">other written material communications between the auditor and management. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Discuss with management AF Financial Group&#146;s earnings press releases, including the use of &#147;pro forma&#148; or &#147;non-GAAP financial measures.&#148;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Assess the impact on AF Bank and AF Financial Group of new accounting principles or policies, promulgated by the accounting profession or proposed by AF Bank and AF Financial Group
personnel. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">7.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Review published AF Bank and AF Financial Group financial statements and the annual report for accuracy, timeliness and appropriate disclosure. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">8.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Discuss with management and the independent auditor the effect of accounting initiatives as well as off-balance sheet structures on the financial statements.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">9.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall prepare the report required by the rules of the Securities and Exchange Commission (&#147;SEC&#148;) to be included in AF Financial Group&#146;s annual proxy
statement. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Internal Audit.</U> The Committee shall: </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Approve the selection and participate in the compensation and performance evaluation of the internal auditor. Evaluations should be based on audit reports submitted and on
discussions with management and the external auditors. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Review the significant reports to management prepared by the internal auditing department and management&#146;s responses. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Discuss with the internal auditor and management the internal audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal
audit. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Follow-up on corrective actions taken to strengthen internal control. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2"><U>Oversight and Compliance.</U> The Committee shall: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Obtain from the independent auditor assurance that Section&nbsp;10A(b) of the Securities Exchange Act of 1933, as amended (the &#147;Exchange Act&#148;) has not
been implicated, which requires the independent auditor, if it detects or becomes aware of any illegal act, to assure that the Committee </FONT>
</P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-21- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P>
<FONT FACE="Times New Roman" SIZE="2">is adequately informed and to provide a report if the independent auditor has reached specified conclusions with respect to such illegal acts.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Coordinate the investigation of conflicts of interest and unethical conduct. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Review and approve all related party transactions and Regulation O transactions, i.e., transactions required to be disclosed pursuant to SEC Regulation S-8, Item&nbsp;404.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Establish procedures for the receipt, retention and treatment of complaints received by AF Financial Group or AF Bank regarding accounting, internal accounting controls or auditing
matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Discuss with the legal counsel legal matters that may have a material impact on the financial statements or AF Financial Group&#146;s compliance policies. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Ascertain that appropriate policy and procedures manuals are in place and in use. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">7.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Ascertain the sufficiency of budget funds for the audit function. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">8.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Conduct an annual review of the Committee charter and recommending revision, as necessary. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">9.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Committee shall also have the authority without the consent of management or the Board, at the Company&#146;s expense, to the extent it deems necessary or appropriate, to retain
special independent legal, accounting or other consultants to advise the Committee in connection with fulfilling its obligations hereunder. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2">The above responsibilities of the Committee will be discharged through review of audit reports and discussions with the internal and external auditor and AF Financial Group and AF Bank management. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Committee Membership </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">The Committee shall consist of at least three &#147;independent&#148; directors elected annually by the Board of Directors. An &#147;independent&#148; director is defined as an individual who (a)&nbsp;meets the Nasdaq Stock Market&#146;s
definition of independent director; (b)&nbsp;meets the requirements of Section&nbsp;10A(m)(3) of the Exchange Act; and (c)&nbsp;does not own or control 10% or more of AF Financial Group&#146;s voting stock (or such lower measurement as may be
established by the SEC). Additionally, Committee members should have few or no ties to AF Financial Group other than through their duties as Board members. In selecting the members of Committee, the Board of Directors will take into account the
requirements imposed by, and the interpretations of the applicable federal banking regulators. Each Committee member must be able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow
statement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">At least one member of the Committee shall be an &#147;audit committee financial expert&#148; as defined by the SEC. AF
Financial Group must also certify that it has, and will continue to have, at least one member of the Committee, who has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable
experience or background which results in the individual&#146;s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-22- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The members of the Committee shall be designated by the full Board of Directors at each annual meeting of
the Board on the recommendation of the Nominating/Corporate Governance Committee. The Board shall designate one member of the Committee to serve as Chair of the Committee. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Committee Meetings </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">The Committee shall meet at least quarterly, including an executive session with the internal auditor and otherwise as needed. The Committee may request any officer or employee or AF Financial Group&#146;s outside counsel or independent
auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. Written minutes should be prepared for each meeting. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Limitation of Audit Committee&#146;s Role </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that AF Financial Group&#146;s financial statements and
disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent auditor. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">AF Financial Group, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions,
reports or statements, or other information prepared or presented to them by (i)&nbsp;officers and other employees of AF Financial Group or AF Bank, which such member believes to be reliable and competent in the matters presented, (ii)&nbsp;counsel,
public accountants or other persons as to matters which the member believes to be within the professional competence of such person. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-23- </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ANNUAL MEETING OF SHAREHOLDERS OF </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="4"><B>AF FINANCIAL GROUP </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>November&nbsp;6, 2006 </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3">Please date, sign and mail </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3">your proxy card in
the </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3">envelope provided as soon </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="3">as possible. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B></B></FONT><FONT FACE="SYMBOL" SIZE="2" COLOR="#000000"><B>&#175;</B></FONT><FONT FACE="Times New Roman"
SIZE="2"><B><B></B></B>&nbsp; Please detach along perforated line and mail in the envelope provided.&nbsp;<B></B></FONT><FONT FACE="SYMBOL" SIZE="2" COLOR="#000000"><B>&#175;</B></FONT><FONT FACE="Times New Roman" SIZE="2"><B><B></B></B> </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" STYLE="BORDER:1px solid #000000; padding-left:8px; padding-right:8px"><FONT FACE="Times New Roman" SIZE="1"><B>PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK
AS SHOWN HERE &nbsp;<FONT FACE="WINGDINGS">&#120;</FONT><B></B></B></FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="26%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="42%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="6%"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1">FOR</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1">AGAINST</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1">ABSTAIN</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="1">1.&nbsp;&nbsp;Election of three directors for terms of three years each:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ROWSPAN="2"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="1">2.&nbsp;&nbsp;Ratification of the appointment of Dixon Hughes PLLC as independent auditors of AF
Financial Group for the fiscal year ended June&nbsp;30, 2007.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4"></FONT><FONT FACE="WINGDINGS" SIZE="4" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4"></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4"></FONT><FONT FACE="WINGDINGS" SIZE="4" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4"></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4"></FONT><FONT FACE="WINGDINGS" SIZE="4" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4"></FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1"><B>NOMINEES:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="1"><B>&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"></FONT><FONT FACE="WINGDINGS" SIZE="4" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4"
COLOR="#000000"><B></B></FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;FOR ALL NOMINEES</FONT></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ROWSPAN="2"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"></FONT><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">O</FONT><FONT
FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000">&nbsp;&nbsp;Jan&nbsp;R.&nbsp;Caddell</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="1"></FONT><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">O</FONT><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="Times New Roman" SIZE="1"
COLOR="#000000">&nbsp;&nbsp;Claudia&nbsp;L.&nbsp;Kelley</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="1"></FONT><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">O</FONT><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000">&nbsp;&nbsp;Kenneth&nbsp;R.&nbsp;Greene</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="text-indent:2.00em"><FONT FACE="Times New Roman" SIZE="1">This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. <B>If no direction is given, this
Proxy will be voted FOR the election of all nominees listed in Item&nbsp;1 and FOR the proposal listed in Item&nbsp;2.</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"><B>&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"></FONT><FONT FACE="WINGDINGS" SIZE="4"
COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"><B></B></FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;WITHHOLD&nbsp;AUTHORITY</FONT></B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px; margin-left:2.00em; text-indent:-2.00em"><FONT FACE="Times New Roman" SIZE="1"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR ALL NOMINEES</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"><B>&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"></FONT><FONT FACE="WINGDINGS" SIZE="4"
COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"><B></B></FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp; FOR ALL EXCEPT</FONT></B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px; margin-left:2.00em; text-indent:-2.00em"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(See instructions
below)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="10%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="30%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="58%"></TD></TR>
<TR>
<TD HEIGHT="54"></TD>
<TD HEIGHT="54" COLSPAN="2"></TD>
<TD HEIGHT="54" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="right"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="right"><FONT FACE="Times New Roman" SIZE="1"><B><U>INSTRUCTION:</U></B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP><FONT FACE="Times New Roman" SIZE="1"><B>To withhold authority to vote for any individual<BR>nominee(s),&nbsp;mark&nbsp;&#147;FOR&nbsp;ALL&nbsp;EXCEPT&#148;&nbsp;and&nbsp;fill<BR>in the circle next to each nominee you wish
to<BR>withhold, as shown here: <FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"></FONT><FONT FACE="WINGDINGS" SIZE="3" COLOR="#000000">&#108;</FONT><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"><B></B></FONT><FONT FACE="Times New Roman"
SIZE="1" COLOR="#000000"></FONT></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="39%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="59%"></TD></TR>
<TR>
<TD HEIGHT="54"></TD>
<TD HEIGHT="54" COLSPAN="2"></TD>
<TD HEIGHT="54" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="1">To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account
may not be submitted via this method.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="Times New Roman" SIZE="4"
COLOR="#000000"></FONT><FONT FACE="WINGDINGS" SIZE="4" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1">The below signed acknowledges receipt from AF Financial Group, prior to the appointment of this Proxy, of a Notice of Annual Meeting and a Proxy Statement dated October&nbsp;11,
2006.</FONT></TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="21%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="7%"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="padding-left:8px"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="1">Signature&nbsp;of&nbsp;Stockholder&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1">Date:&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1">Signature&nbsp;of&nbsp;Stockholder&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1">Date:&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000; BORDER-BOTTOM:1px solid #000000; padding-right:8px">&nbsp;&nbsp;</TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="96%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="1"><B>Note:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="1">Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder may sign but only one signature is required. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by
authorized person.</FONT></TD></TR>
</TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AF FINANCIAL GROUP </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>This Proxy is solicited on behalf of the Board of Directors of AF Financial Group </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>for the Annual
Meeting of Shareholders to be held on November&nbsp;6, 2006. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The undersigned shareholder of AF Financial Group hereby appoints Jerry
L. Roten and Michael M. Sherman, and each of them, with full powers of substitution, to represent and to vote as proxy, as designated, all shares of common stock of AF Financial Group held of record by the undersigned on September&nbsp;18, 2006, at
the 2006 Annual Meeting of Shareholders (the &#147;Annual Meeting&#148;) to be held at the offices of AF Financial Group, 21 East Ashe Street, West Jefferson, NC at 6:00 p.m., local time, on November&nbsp;6, 2006, or at any adjournment thereof, upon
the matters described in the accompanying Notice of the 2006 Annual Meeting of Shareholders and Proxy Statement, dated October&nbsp;11, 2006, and upon such other matters as may properly come before the Annual Meeting. The undersigned herby revokes
all prior proxies. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>(Continued and to be signed on the reverse side) </B></FONT></P>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>g48862img1.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g48862img1.jpg
M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````/```_^X`#D%D
M;V)E`&3``````?_;`(0`!@0$!`4$!@4%!@D&!08)"P@&!@@+#`H*"PH*#!`,
M#`P,#`P0#`X/$`\.#!,3%!03$QP;&QL<'Q\?'Q\?'Q\?'P$'!P<-#`T8$!`8
M&A41%1H?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?
M'Q\?'Q\?'Q\?_\``$0@`30)[`P$1``(1`0,1`?_$`(X``0`"`P$!`0$`````
M```````%"`0&!P,"`0D!`0`````````````````````0``$#`P(#!0(&#0D'
M!0$```(!`P0`!081$B$3!S%!(A0(46$RDK)T%35Q@=%"4B-3<[/3E%88D6)R
M,R1U%A<WH;&"TI.T..&BPE4VE1$!`````````````````````/_:``P#`0`"
M$0,1`#\`ZKUVZTR.E\2T/LVH+G]*./`0FZK.SDH"ZIH)ZZ[Z#D/\<-P_=-G]
MK+]50/XX;A^Z;/[67ZJ@?QPW#]TV?VLOU5`_CAN'[IL_M9?JJ!_'#</W39_:
MR_54#^.&X?NFS^UE^JH'\<-P_=-G]K+]50/XX;A^Z;/[67ZJ@?QPW#]TV?VL
MOU5!U_H3UHD=4(=WD/6L+9]%N,MB(.J[OYPFNJZB&FFR@ZE0<2SOU4XGAV6W
M'&IMHFR)5N,6W7FE:0"4@%SP[B1>PZ"!_C9P?_Z&X_&9_P":@W?I]ZA<5S*S
M9!=VH4JWPL<8&3-)_82D"B9>!`5>/XM:#ZZ1^H'&>I5SGVR#"D6^;##G@W(4
M21QG<@[D(.Q454U%:#J5`H%`H%`H%`H%`H.4]6/4/B_3B^0K+/@R9\R2V,A_
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MHU%(0D''%"0"-%447BG;I03?^0W6+]TY_P#TT^[0/\ANL7[IS_\`II]V@@,I
MP3,,4*..1VE^UK+0EC)(%!WH&F[;Q7LW)068]#WU/EGSB'\AV@L[04CS:W0;
MEZN#@3V`E0Y-WAMR([B;@,"9:11).]%H+3_Y)])/W2MG[.%!GP\(P'&;3=/(
M66)`M\E@UNC;#*"+K+8%N0Q3X7A4J#1>A,KH5(G7;_+6*K4Q``K@XXV\A(V9
M+M`2>5?#N3L2@GHW7KIB_?KE8UNBL3;0+YSR?:-MIL8JZ.KS"3:NB]FG;W4&
MNQ?5IT;D7$87G9;($>Q)CL8A8[=-RKJI(/O4:#KS4V&[#&:T^V<,VT>"2A(K
M:MJFY#0^S;IQUH.59%ZI>C]DGN0BN+UQ=:51<.`RKS2*G!41Q5`2_P"%5H-A
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M[5!TK"\[Q7-+2EUQR>$V*A;'4347&STUVN-EH0K]F@J?`_\`,MS^^7OT)4%S
MZ!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0
M*!0*!0*!0*!0*"L/KA^JL3_/R_D-4%2J!0;=TMZ=77/\PAV""B@T:\R?*T51
M9CAQ,U71>.G`?:6E!_1*QV:S8U8H=HMX!#MD%L&(X*J(B<=$U5=-2(E^VJT&
MN]:O])<L_NR1\B@XUZ'_`*ARKYU%_1N4%B[ID-@M)-C=;G$MY/(JM)*?;94T
M'MV\PAUTU[J#!_Q]@O[R6O\`;8__`#T%7_6=?K'=I6*K:KC%N"-!,1U8KS;V
MS<K6F[ED6FNG?0;!Z'OJ?+/G$/Y#M!9V@H=UAM%VO/J4NMJM#Z1KI-N$9F'(
M(R;0'38:024P12'1>]*#<_X:?45^]3/_`/2F_JZ#K?3#`<YPSIME4++[B%RF
M26Y#T=T)#LE!;\JH[=SHBJ>).Q*#EGH?^N<I^;1OEG0:3CF#PLV]2%VL%P<-
MNW.W*>]-%LE$G&F#-Q6]4_"442@Z3ZG>B>`8]T];R#'+8%KF09+++B,J6UUI
MY5#QH2EXD+146@W[TUW!BX=!H0WPVSMT=)<5]9*HC210,D47%+AM055./=0<
M^9Z@>DK#7I,*W6(KXXKA[Y21`EBNY57:VY)(/`G8FU.R@YDSE>''UZQV^8!`
MD62W/3(@/0G1%I$<<<Y;R``$:(V8%V:^V@W/UL(2YKC2`NA+`/:O9HO/72@Z
MK;/3)TP7I\,&3;^?>9,/F/7HS-9"23;W*X*Z[41#7@.G90<H]&<Z7!SC)+63
MBK$2"KKS:*NU7([PBA(GMT,J"$P;'W>N77"ZRLDDN+;(W-E.LB2H7EFG4;8C
M-KQVCXDUT]_?06%O7I?Z/W+R/)M'T=Y)T'#\J9#SP'M:>W*6J%WJG'WT'%/6
M;"B0<BQ&%#9"/$C6XVF&&T00``=1!$43L1$2@L%GL7IW*Z7LLY\ZRS8O+,%S
M72V."ZC2;%85/%S>W3:FM!Q4^KOI3AVY;/#PUV;$V["<&`PIEHFF[FNN"]N]
M_;01/I"N<8.K.1PK3S6[)+AO.QH[R^,0:DAR=Z(JIO$#5*#!@?\`F6Y_?+WZ
M$J"Y]`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%!IV37S,[1=[?(
M9:@OV67/8@+!T<\Z0OKM5\'$+9J"ZDH;/@HJZT&<QD-Q+J#*QUQMGR#5L:N#
M+H[N=O-\FB$]5VZ>#5-$H,'-,MN5DR3&;8P]$8B7QV2S)D2A)>5Y=A7A451Q
ML?$J;>-!E,YG`BVT)5PG,S4DOOMP#MS3AJ\#`J3FUL5=55;V%N5%TX4&6F9X
MZ;D8&)*R?,ML/`3`&X(M2UVQS<4478+B_!5:#YPW,(&5VMRY06'V&&Y#\;;(
M;)LE6.Z3*JFOM4/M4$;>\]*V9O9[#Y53MLXRBS;EQVL3'6U=B,^S\8+9Z^]1
M]M!-2<FM+-T^BN81345H'!;;-P6BD:\GFJ*:!OVKIK0:QT]ZFP[W:807E\&+
MT^W+>-4:-F,;<20;9\MP]056P$5-$)53OH-DLF76&]394&!(4ID0&W7H[@$V
M?*>UY;HH2)N`]JZ$E!K,K/;D[E-UQV(]#A7F"ZRENM4\#;*=&,0)QYAY3`37
MB2(((NU4\5!)+U-QQF5>6IJ2(;-EEL0'Y+K#NPWI"`H("H*\%5T42@]PZC8F
M11!*4;/G'`9%7FG&D;=>51:;>WB/*)Q4\*'IKP]J4"?U%Q6%(?CN22-]IJ0\
MV#8$7/\`)CN?!A431PVT3B*+_NH)7';VQ?+)"NS#3C+4UH'@:>%0,4-$7145
M$]O;02-`H%`H%!6'UP_56)_GY?R&J"I5!Z1X[\A]N.PV3K[Q(#30(I$1$NB"
MB)VJJT%__3_TB9Z=X>(2P%<CN:"]=GDT+:J:[&!+3X+:+Q_G:T'.^JW6(;QU
MCQ;`[*_NMEON\4KP\"^%Z2+@J+2*B\1:[_YWV*#K_6O_`$ERW^[)'R*#C7H?
M^H<J^=1?T;E!"^N+3Z4Q+V\B9\MJ@K!0*"VWH>^I\L^<0_D.T%G:"E>3?^8H
M?WU"_1-4%U*"*RO_`/+7GYC)_0E05>]#_P!=93\VC?I#H(_HSI_%A>/G-V_^
M=!V#U;_Z+SOGD3]*E!S''+;?[CZ-YD>R"X[(26\Y(99U4SCA(0GA1!XKX4U5
M/900_I^ZI]%,0Q=Z/E%KVY&C[AG/*(,HG&ETV`!KJH;>S;P]M!KV792.5=>L
M=O\`'M;EJM4N7;TM+;S:-&[&;?01>4$X>,MVFE!M_K5__<8Q\Q+_`+A:"UT#
MZ@C_`#0/T24%2O2`@EU6R05XH4!]%3VIYIN@C+BWEGI^ZQ2KT$`IF.SS=%H]
M"1I^&^>_EHXB;1>;VIP7V>Q:#I-S]:F*ZP`LUBG2'7GFTG#(Y8;&570T91LS
M4W/P==$H-(]8]P8N-]PZX,"X#,NVD^V#P$VX@N.H2(8%H0EQXHM!+>KRVY"]
MB^%SV1<<L,>-LD[$50;D&V&PCTX)J"*B*M!+87U[Z"V'#X$2U6!Q+X$=MM;<
MS!`GGI>Q$75[COWN??:Z^[NH-4]*CDQWKGD+LZ/Y2:[#FN2(NFG*<*4T1-Z=
MVU5TH,6`J?QEG_?3WZ$J"Y]`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`
MH%`H%!I4^U=17LM2>TEF.TL&(0?,+)*0PTJ:.N"`HC:NFBJFNO!.'MU"0;Q^
MZ#U#>R)28^CG+8W;T;W%SMX/$]OTV[=/'IVT&)F.+WRZY-C5WMZ1"9L+LEYU
MF41BKJR&%91!V@:)MUUXT&+=<9S6:$06BML:($F0LJV-J\+)1WFE$25P!$R-
M'24R#1!+VT$5;>F>1,C8"<<B0[E9H\*,-W@.O`\348OQ[#S9#LD,NAP$3TVJ
MJK0;3@6-7+&[/)MDIUF0VDV9)AFUO0E;E2')"([N["17=OA]E!`WWIO<[WAM
MRC27&&<MF/K,8N+3KW)9DMNH<9P45-?Q0`(IX>Z@]Y.&9%-R2%?G?*0+DQY7
MGW"`\\#CS;2+SXTAM1V/M&O]7NXAKK00L7I)?'+/8;3.E1ACV]F\QIKT<G-Z
MA=MVPF=P(FK>_CN[:#:\#Q_(;6R7TZS:@D-MA&:?M;1@3P-]CCQ.(BHJ_@#P
M1=>-!%YO@=ZRR'+MDX()-E)1ZSWE%-)UO'42WM>#^L'1=JB:)[:#SOF!9+)<
MR`(;\,HUVN-LN3!/DZ+@E!\OS0<VB0^+RJ;53\+CV4&2]A=_#-IET82V2;-=
MG(\F8DUHG)<5Z,T+7]F710(31L53=IM7BE!AV'IQ?+=YZTO%;7++_;%MMRY)
M%<T\[S%5MTE38B-JZJ;Q74D1$X<:#<,2MURMF-6VVW(F2F0H[<<RC;U;5&A0
M!5-^A<435:"7H%`H%`H*P^N'ZJQ/\_+^0U05*H+.>D/I$$V674"\,JL>&:M6
M-HQ3:;J(HN/\>WE_!'^=K[*#M?7;J)-Q7&V+78OQN79&ZD"R,#Q-"-4$WM$_
M`0N'\Y4H/7IWT-PK%++;`E6R+<<ABJDB3>GFT-\Y1+O(Q<+4D02X#0;_`#X$
M*XPGH,Y@),.2"MOQW10@,"[1(5X*BT&#C^)8QCC;S5AM<:UMR%$GPBM"TAD*
M:"I;43736@\\@PO$LC-D[]:(ET.,A#'*4T+J@AZ*2#N1=-=$H*V^KW!\/QW%
MK"_8K-#MCS\YP'G(K(-$0HRJH)**)JFM!5B@MMZ'OJ?+/G$/Y#M!9V@YGU;R
M[IGT\C#DUYM$27D#[FZW@#+/G'G@1$W\TDW"@)IJ?=05]E>K+K-?)A_X=M<9
MAD5X,QXKDLT3^>2J7R4H%O\`5WU.MDM8F56>).CEX9$9U@XKR@O`D[5'BGM"
M@M#TS=Q.YXS#R3'K$W8VKLR+A,I&;CN[45=$/8B;DUXBO8J<:"9BXMC,2Y%=
M(MIAL7(U)3FM,-@\JG\-5<04+Q=_&@RKE:K9=(JQ+G$9FQ"5"*/(;%UM5%=4
M51-%3A0+;:K9:XB0[;$9A1!52&/';%IM%+BJ[01$XT$%)Z7].)5P6XR,9MKL
MU2WD^45I24NW5?#Q6@DY6+8S+EL3)5IAORXJ",:0XPV3C:-KJ"`2CJ*"O9IV
M4'[=<8QN\/-O7:U1+@\T.UIR2PV\0CKKH*FBZ)K022``@@(*(")M043AIV::
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MKIWZT$K0*!0*!0*!0*#SD2&8T=V0^:-L,@3CKA<$$`34B7W(B4&K7'*[^N+#
M?K-:VI0&P<X&Y#RL_P!E`=XIJ@FO-='B*::)WK0>=^S2_P`3&HF0VVR>9AK%
M9G3H[[O*D"VZB*K+0()[GA1>Q=$[J"1N&5(%^B8_`91ZZ2&/-O\`-+8W'CJ6
MT2<TU53,M1`$[=%[$2@S(E[;<O<JROHC<^.T$IH47@Y&<)01P=?P3%1+_P!:
M"!RS-;[8)K4E;*C^.#*CPIDWG;9`G*,6Q=;9VJA-`;@H6I(OL3A09U\S)NVY
M58\?;C%(=NSK@/OHN@1Q%DW0W>TG.6NB>SC0>MHRA+S>)T6W-@5OMCQ194TR
MXN2`3\8#()VHV2[2-5TW<$[*"4NUS8MEN?G/(IBR*J+8<3,EX"V"=Y&6B)0:
MD6=9#)P&'E5KLS;SCL(KC+B//JV@-@.XF@(0/<XJ(NG!$]]!F99GK5APYK($
MA.//R6F7&+<2[7$YNU2YGX*-">I4'OF&:-X\EJ;&,LN3<YD>+RQ)!1IM]P6R
M>-?P14D1/:M!LM`H%`H%`H%`H%!SO(.J%TLUTRAGZ(;E0<5BQI\UP'U%YQB2
MADO*`@V[FQ;551236@EH6:3;[<)L;&HK3[%N!A9,N6X38&](:1X6&T`37<+9
M"IDO9KIQH)3%<HC9-81ND%M67-SK#T5[X3,E@U;=:/;^"8]J=J<:#4K5U5N3
M^/6_(Y]I:9M$ZXK;'%9D*;S)K**(#B@38(8*X/8*ZHBT'0%GP$E^362TDO;N
M2/O'F;>W7;KK0?+-RMSZMHS*9=5U2%I`<$MRA\)!T7CM[_900&;Y+DECA/3+
M/9ANC,%@YD_F/<A5:;U56V/":&[M%5T71/?QH/US-FI,NU6^TLI(GW6*,]4=
M)`"-%-$4'']-2U,EV@(]JZ]R4&SIKHFO;WZ4"@4"@4"@4"@4"@4"@K#ZX?JK
M$_S\OY#5!P#I%TTN74/,HMDC;FH0_CKG,1%5&8X_"7^D7P1]]!_0%US&,%Q!
M35&[;C]DC<!3@(-@G!$]I$OVU5:"A69]:LOOW45W-(<IRWRF=S5H!-I^5CJB
M@@@A(0H2HJJ2HG:JT&W=*.N'5>[]2,<MERR25)@2YS+4F.:-[3`BT45T!%XT
M%N>JUUN%IZ;Y)<[:^4:?#@/.QI`:;@,1U0DUU3A0<N])F>9?E]GR)[);H[<W
M8DB.$8GMNH"8&I(FU![52@B_5IU'S?$+AC;>-7=ZV!,9E%)%E`\:MDV@JNX2
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MLI!SG'WA,5;,2+>2H@(.U`XT&E9;ZR\'M5P<AV.VR+X#2[2F(8QV25%T79N0
MC)/?M2@F^F_JGP+,;FU:);3MBN<@D",$HA-ETUX((NCIH2KV(2)K0;?U;ZKV
MOIK8XMWN,%^<U*D)&%N.H"2$H$>Y=ZHFGAH)["LIC97BELR.*R<:/<V4?;8=
M5%,45530E'AW4&AL>H6PO=5BZ<I:I27`91P_/*3?)W`"GNTUW:<*#[ZC>H''
ML%S2!BUQMTAYV<#+OG0-L66Q?<5O4]ZHN@[=5H-+RCUG8=;;J["LUHD7B.P:
M@4[F"PV>U=%5M%$R4?8JZ4&_]*.O.&=1U<B6_F0+RR*N.6N3IO4$X*;9#X31
M->/>GLH.DT"@4"@4"@4"@4"@4"@4$%GELFW7";];(.OG9EODL1D3@JN.-$(I
M]M5TH(1YR-=L(M=J=LTNX0+E;Q:>2,0M<DP:$>4XN]LP7=JFJ=BIQH,"[8]=
MY."P\-N4.;<KD-N;Y5Z:>0&VYS:;6R-U'`<W-EH>[:J+I[:".OO3^\.R<@&1
M%6YS[W;(+%OO0*(E&G1&U:4U)50VDYBH\A#[T[:">CVV>YU5@2=ZO-VFP'%N
M,ON.1(?;(`7WZ,D>G=K[Z!DUPR&3D3,)<6F7&S0G6GF'FW8P,O245%%QSF."
M?+97BB;>)<>Y*",NG3_,TRRQ7&-?"DPVKL]/FB49A"9!R.X")O5=QIM5&A]B
M<>Z@Q<>Z?W>"=FBLQBM]RM%RG/R[Z"BJ2H<CG*.O'5PG"=!5`TX*.M!L4W"L
MMD1XV_+77941QQT'7(,4D)3!!%.6B`.H<=J^^@A+)CEWB=,[;AV16R7=G)$,
MVWCC*TP,<Q_JV3-MP%31>PTU]]!C99TWSJ;AQ,Q[\<FZ);(T%V(;#+G,-HA5
MPA?<5"3>J:DO?HE![YGT[S>:+$B#D!2'SG6YQYLH<=%;"*X*D8DJIX05%<V=
MZT'4`0A`4,MYHB(1Z::KWKHE!]4"@4"@4"@4"@YPWA"77J1E<J^6QQVPW*+;
MF8RFYHP^45'.:#C8'XAU,=$,=%H,ZP6FY8C>LC1NWNSK7>)?TG!<B[%,'7&Q
M!V.X!$&U$($4"[-%TX:4&;TXQF?CF/RDN.U;C<ITNZRV&5W"V<MQ31D%^^V#
MHBKWK0<VM'3[(DQ*UP6K+(A95#N[LYBY//`L6.!SC>5TV^88.:QS4=J!KJO=
MVT&PMX?D;A%;Y,8UN;&1?2T?(T4-/)D]S51"UWH7)UCJWIII[J#,Q?'KK9\S
M6YM6=6K-?.>XL).6GT3(0O$X*;M-)R(A.(WV$B4$MU`FWTT:M,.P3+M:I0$M
MT=B.,-DH=GEQ5UQI?QGWZ_@\._@&J9!@5TGW#)9I6A3<R6SPH]J$#!#MTR(+
M@HVKB*G+02<%Q##O%?=0=6@,OL08S,AWG2&F@!Y[\,Q%$(OMKQH/>@4"@4"@
M4"@4"@4"@K#ZX?JK$_S\OY#5!C=#NK/0GIQB`02N;[M[F[7KQ*&(^J$[QVMB
MNWX#:+HGMXKWT&F>I'K_``\Z2+C^,.NIC;.CTQTQ)LI+_:**!(A(#7O[5X]R
M4'!J#:>EMZMMDZB8]=[F[R+?!FM/2GMI%M;%=57:**J_:H+6]3_41TCO?3S(
M;1;;VKT^=!>8BM>7D#N<,=!34@1$^W007H?^H<J^=1?T;E!#>N+ZTQ+\Q,^6
MU05?H%!;;T/?4^6?.(?R':"SJIJBI[:"C_1B8UA_J4=@W=>23DN;;5,^"(X\
M1(TJ_P!(D1/MT%WG`WMF&NFY%'7[*:4%-.L/I@A81AMQRMN_N3G&'6](I1Q;
M1>>Z@?"0R[-WLH.A>EK_`$'R#\_/_P"V&@Y5Z3>GN.9;F5QDWZ,$Z-9XP/,0
MW4W-&ZX>T2,?OD%$7@O?0=@]5AP\6Z6%#L$)BV#?9K,6>4-H&-[+8&YL+EH.
MJ*HZ?8H,WTR]*\/@].+;D,B`Q/N]Z`GWI4AL75;#>HBTVAH2"B(/'3M6@T'U
M?=-<8LD2U9;9(S=MFR)*Q9C,<4;!Q=BN`Z@CHB&.S153MH/+KK?IU_\`3=@=
MVGDIS)+S7/<7M(P9<;4E_I;=:#N_0+_1O$OF(_**@KE;O_,MW^^'OT)4'SZM
MX/G^L]G@[T;\W!B,<Q>P>9(<'=]K6@M!C/2C`,>Q]FQQ;+#=C`V@/N/L-NN/
M%IH1N$:$JJ7;051ZA8_"Z8>HVT+C&L>([(AS&HHJNC8R75;=83OV*B+HGL6@
MNXM`H%`H%`H%`H%`H%`H%!XS9/EHCTGED[R0)SECHA%M371-51-:#7<7R]F]
M1+=/A6>5'MMY%7V99(UM\0J2$Z`&I"I;>W3MH-F%QLD0A)%%>"*BII0?2*B]
MBZT$%_B"*,6;(M,!VX<J0;&R,@(KTD%5'40C4!T!4T4R737A08K6<MRL99OM
MNM4Z:KO,0[>``#[9,$H/"?,,0U`@5.!>+NUH/=,WLIV>T7)A'7OIU`6U0Q!4
MD.J8<S38NFW:/$R)=![UH)`+PREQ9MLD%C3)#1/QP)4)#0-$<$23AN#<FJ>S
MC01F6YJQC;1R'K;-G1(S?F+C)B-B01F$UU</<0J>FBKM#4M..E!ZWW-+)9X-
MMF/D;S=V?CL019'<IK)(1`U[-H)O155:#)=R*)]-K9(K9R[@T`/2Q;T0([3B
MJ@$Z9:(BEHNT4\2]NFE!E72<Y"AF^U%=FO)P:C,(.\R7L34E$13WDNE!`0.H
M5KG6V#(8BR$GW"2_!8M;HB#R28N[G@2JNQ$;Y9:ENT]E!ZL]0+`]:8\\%<5V
M3*.WLV]`UDE,:(A<8V=FH*"J1:[43CKI09UPR2/`.#%>8<*ZW%22+;6MIN+L
M34R(D78(`GPC5=/MT$J"DH"I#L)412'771?9JE!]4"@4"@4&G7/J9;;=_B9'
MK?+(\5;:?N+0(V1FP\*F+K([_$.T55?L*E!-M9"T[*MC#49PQN48I8OBH*#3
M8H*ZN>+7CS$1--:"4YK6Q#WCL+X):IHNOL6@\&;C!>FR(+3X'+BH!26174@1
MU%4-W])$H(US*&`RYK&?*O+*>BE.&0FSE<D#1LM?%NUWJB::4&5?K_;+'99M
MYGN[8,!LG'R#Q+X?O41.]5X4$`SG\IVYO6H;%)*Y1.2[+C`ZR6V+(-0:D-EN
MT<3PDI#P5-%]VH;<+C9)N$D4==-45%35*`CC:J@H2:JFJ)JFJI[:#]0P521"
M15'@6BIP^S0$(5UT5%T[=%[*"%S'+(6*61V]W!AYZW1B#SCD<4,V@,D#F*&J
M$2(I<=NJT'VYDT+S=I9C`4N/>`-R-,:(%90&P1Q2)55%T45X:)01S.?195L=
MO4"W2IUB;4T&X,H"\U&R4"-IHB1PP0D7Q:<>U.%!+WR\';(@NL0G[E)=7;'A
MQ4'>:Z:KXG"`!1$[R)*"%M_4BRW*%:W8#+[DV[NR8\:WNBC+PO0M?,@YO5!%
M6]J]_'NH,EK/+'(MMKF1>:^]>2,+;!`?Q[ALJJ.\%5!$6]J[C5=OOXI0?%XS
MVVVHIJ/,/._1##4J]*SM/RK3VNU2XHI\!(E0=?"FM!E7G,+/:I-GC/$;KM\D
M!&A(RFY/Q@J2.&O8(<.V@G*"L7K?`SM6)H`J7X^7V(J_>-4%3?+R/R1_%6@>
M7D?DC^*M`\O(_)'\5:!Y>1^2/XJT#R\C\D?Q5H.Q]".N;?3"WW:)(L;]S6YN
MM.B;;J-;.4)#HJ*!ZZ[J#!Z\=8@ZH2K._'LSUL^BVWP(7'.=OYQ`NJ:`&FFR
M@Y5Y>1^2/XJT#R\C\D?Q5H+:>B`#"SY8ABHKYB'VHJ?>.T%FZ"M_J1]/5VR*
MY_XTPQKF7C0?I.W@2`X\K:>!]E55$YB(*(H]_#3C0:5C?JQZC8I$&S9;8OI*
M3%_%I(DJY$DZ#PT<U`D-??HE!$=1_4-FW5&Q'BMMQI&(DMQM71CH[+?-6R0Q
M1%010?$GX-!VSH)A>3XKT5O$"_P3@SI*S)+48U$G.6<=!'<(J6U545\*\:#G
MOHIM\^+D&3+*C.L(41C:KH$"+HX79N1*#O/6?IP'4'`YEA!P69XD,FW/%\$9
M#6NU"_FFBJ*_9H*S81U?ZH=%67L1R+'3EP6'"**R^I-JTI+J7)?`7`-LEXT'
MA>IG5CU$9-!CM6M;;C\$N"Z$D:.)JB..FZ:#S7-J<$'[24':^O'2*5<.BT''
M<88*0]C7)=BQDTWNM,MJVYHG>:H6[3OH.-=+O4?G&(XPQA36-%=IL4B:MBDK
MH.AO)51LVA!5+:2^U/90873BS9G']2MMD9-&<^EGIQR+BZ($K8NOL$ZH[D3;
MX=^WMT[J#/\`5]'?D]8;7&CKI(>M\5ME57;H9ON(/'NXK0;$GJ>ZGX/$_P`-
MY=BB2;Y;QY"3G#-I'=B:"9((&+FNGP@+C00_27`L^ZJ=46NH>6L&Q:8L@)1/
M.@K8.FPJ*Q&8`M%V#HFI=FGO6@N/0*!0*!0*!0*!0*!0*!08EV54M<S0"<+D
MN(@`*F2JHJB((IQ5:#FF)XQ,MO29EUV#<7[NS97(4BQN/.M$1+H1`V.O@+AH
MBAW<$H(^'C4NX0\DMCUNF,C<IL"189213C-17O*MIYD0U7EBRZVJFA<2["^%
M0;[T]\\F->6FP'+==V''6[@3@*(2).Y=\MLE^$#R^-/9KIW4$+@,P+7TPMD.
MXLRW)+9O6^XI#;==>;D<YP73+DHICXN.]/:BT"RP9%IPPL>OJ7.1#G2)<:W.
M1P=<EM03)5CB^XPBD![%TW%_Q<:"!#"KPW-QN3E+4JXPHMCE6IU8ZFK[,EQX
M"9,DCJB[C8!`4AX(2>^@DV;?D@?Y9P+DZ3M^A/.OW-TB0C\NW#=;<YA)P55)
MUL57O*@G,^N[A(EA.UW*7;IK:K<I,&*;XJRJZ+'%15-"=35"7N'WK0:YG&*Y
MS/9:FVDHR,.RK8L:WNQ3*1%CL/-GL(A=0-H$BF:(GN[DH,21A]]9NM]-IN2.
M32[Y&N5INK*N#'*)HR#@.*B\M`;:!P"`^*\-->%!O;C^06E)DF^2_I&W/FC4
M1BV07DD,BX2IN-6W'B)!'34A%-.V@U2WX;-C6*.Y)?N*2[1=9,O%3`4>F#%>
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MD+(`$<CO,-H!Q$<+^J)--JZKV+0;1A=FD0LYR&;)M!0BN,6VN,R$%#;16X_+
M>:YR?"(331?;VT&#>H.37O*+Q<K+%?M\F)8IEJAORAY6Z:;R&R31:JA`0CN0
MT[._C0:S>,92Y=/,F<M]BNX76X08T5^WRVA%"E1SX<ED!%"(=5W/)P)-.*T$
MC>\8O)Y!EDC&[6<2;(L$2/9Y?)Y`+(`GE=:!TD1`-6S$=?N4&/(QN)-A1YT.
MRWEMN7=;8Y/ARVE;V)&4@?(([*!M1`X&?8YW:T$A<,8N\'+>7C4;6*FUF/'D
MQB%N`00B;:EPY:>$FT(D%QD_OM=*")G8W>)>/L+;[5*AS&L?GP<EC$V:'*F&
MR(QA14_KS\SN,7!5=$7MXT$MCP+B5ZNEX.TSF[4EAMI2Q98<,G9;)."\NTOA
M.@!CN[]/L4&[9B9OX\"QV'I*NR(;@MLM$X6P9#;A*HHBKH@(JKK0:<S@%ZM6
M4MVJUHO^"9;%P=AJB^.V293.PV11>*LN$:N!^"NH]FE!*].9EQLN)6O%[E:)
M35YM,<89@VT1174:\`NMR43E;#%$+B6J=BIK0;%EE]FV>V"[#@29\IXT:;"*
MR4CEZ]KK@CQV@G=W]E!H-YQN/=L=L=L2VW&%9!DRGIMR5HF[JS+42-N2`!N<
M!'7C+<J)V<%3:M!C-8I>7I-GF9;`>?;2Q/VM/H\3;)B2DC<VYRXZHK9/LB"\
M.`DFG"@_9^!95(Q](K<N0.6W^UQK9DSVT"B$`(H+(=<)%3F-M&8Z-KJ:_P`M
M!EY)A&<,7"SG:Y,23$8NT(F]T9TGF(L5HP;YA(Z@J`(JZZ(FI%K0=5\7M3L_
MVT'RXTTYIS`$].S<B+_OH/GRD3\@W\4?N4#RD3\@W\4?N4#RD3\@W\4?N4#R
MD3\@W\4?N4#RD3\@W\4?N4#RD3\@W\4?N4#RD3\@W\4?N4#RD3\@W\4?N4#R
MD3\@W\4?N4'TVTTWKRP$->W:B)K_`"4'W0*#QDPH<I$&5';?%.Q'0$T_]R+0
M?3$:-'#9':!D/P6Q04_D32@]*!0*#Y-L'!VF*&/L)$5/]M!^HB(B(B:(G8B<
M$H/V@^4;;0U<0!YB\%/1-=/LT'UK04X]5"I_GMCWS:#_`-T=!<5QMMS1'`$T
M3BFY$71?MT'U0*!0*!0*!0*!0*!0*!0*!0*!0*#R:B1FGG7FFT!U]45XAX;E
M%-$54]NG#6@]:!0>0Q(PR3E(VGF7!0#=[2V#Q0=>Y/=0>M`H%`H%`H%`H%`H
M%`H%`H%`H%`H%`H%`H%!\/,M/-JV\".-KHJ@2:HNBZIP7WT'W0*!0*!0*!0*
M!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*"!O7^!/I)KZ;^B_I/0>1YWR_
M/V[O!LYOCTW=FG?03U`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%
A`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H/_9
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>g48862img2.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g48862img2.jpg
M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````/```_^X`#D%D
M;V)E`&3``````?_;`(0`!@0$!`4$!@4%!@D&!08)"P@&!@@+#`H*"PH*#!`,
M#`P,#`P0#`X/$`\.#!,3%!03$QP;&QL<'Q\?'Q\?'Q\?'P$'!P<-#`T8$!`8
M&A41%1H?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?
M'Q\?'Q\?'Q\?_\``$0@`4@#*`P$1``(1`0,1`?_$`'D``0`"`P$!`0``````
M```````%!@($!P,!"`$!`````````````````````!```0,$``0$!`,&!`<`
M`````@$#!``1!08A,1('02(3%%%A<3*!,Q610F)R@B/!4I(DH4-S@S1T%A$!
M`````````````````````/_:``P#`0`"$0,1`#\`_5%`H%`H%`H%`H%`H%`H
M%!6=OR>\XQZ+,U_$L9S'`)ID<?ZOMYG@HG',_P"T=DO<"M?P6@K.&[WL9=MW
MVFI9YQ^.:MRXPQVB=8._VNAZJ$"JG%+I029=VL8TKGN=?V&-Z7W*>*D$GX*V
MCEZ#ZSWG[?J2!,ER<87"_P"HPI<04O\`$WFA!/\`506W&Y;%92,DG&3&)L<N
M3T=P70_:"JE!MT"@4"@4"@4"@4"@4"@4"@4"@4"@YI+[A;Q@=QGX/*:XYFH!
M`L[%SL20>M[12Z5;..Z0DXXT2HA*"\E1;4&P/?/3V51,K"S&'7@B^^QDH!15
M_C;!P?\`C026/[Q=KY[PLQ]EA(\7)MYST"X^%G4#C\J"TP\A`FMH[#DM26UY
M&R8N"OXBJT%9W+3I4R2UL6NNI!VR`*(P_>S4IE%N424B?<V?(27B"\4H)34=
MIB[)AQG--E&DMD3&0@._FQ9+?!UAQ/B*\E\4LJ<Z"8<`'`)MP4,"2Q`2714^
M"HM!SS;NVW;[&0<AL["NZI+B,G(DY?#&L4^EM%)>IH?[+E_@0+>@F.U3^U2=
M&QLO9Y!2<G+$GQ-QL&G48<)58%T6[#ZGIV4K)SH+;0*!0*!0*!0*!0*!0*!0
M0FP[IK&O"B96>VR\2?VH@7=D.?R,-H3A?@-!#_\`V>VY($+7M4D*R7V3,NZ.
M/;^OHV=D?M!*#)O']UI@B<K,8O$JO$F8<1V6J?+U'W&[_P"B@^=LMBS.<A9<
M\A):GQX.2?@P,FTU[?W#;'2)DK:$:)TN]0(J+QM0?>Y+!PX4':XS:G,UI])1
MH-[E"<LW-"R<_P"RO7]12@M[3K;K0.M$AMN"A@2<E$DNBI0:>0P6$R32M9#'
MQIC9<"!]D'$6_P#,BT%3>[(]LU>61!Q"8B9>XRL6Z]"<%?BGHD(_M2@T7\#W
M3U-LY6!S);?`;7J+!YCH;E]'BC$YM!N7P1T>/QH(]-JQPG&[F8!##%2C"!NN
M-='H=8Z"],9#S?,7HA+TG\6UOR1*#JXF!BA@2$!(BB2+=%1>**BT'..X*+M6
MX8706E7]/#IS6RJ/)8L=RT>,7_7>3C_"-!TA$1$LG!/!*#$W&PMUD@]2](W5
M$NJ^"7H,J!08JXVAH"DB&2*HC=+JB<U1*#*@4"@4"@4"@T,WG<3@X!S\K)&+
M%"R=1752)?M`!&Y&2^`BBJM!6D3<]J'J$W=5P1\0L@KE9`?/J0@B(O\`4?\`
M+03>!T_7,"KAXR"#4E[_`,B85W9+J_%Q]Q2</\2H)#(9/'XZ/[G(26XD?J%M
M'7B0!ZW"00&Y>)$MD2@K7<S8YN*P"0,0J%LN=/\`3L&SX^NZGG=7X"PWU.$O
MRH)C4];@:SKF/P4%/]O`9%I"7F9\S<+^(S527ZT$F\RT\R;+HH;3HJ#@+R(2
M2RHOU2@J7;)]UG#S=>D.J[(UN:[C4,N)%'&SL4B_[#@)^%!<*!08//-,LF\\
M:-LM"IN.$MA$12ZJJKX(E!S?M3$#/,;7M$F(`8G;YQ'"B$/!Z"RTD87C1?&0
M@J7TM0;.J9?_`./E3=-SCZI#QK#D[7I[O_.QC2=1LD7BY$^U?%0Z5^-!Z]I(
M$J1CI^Y9(5')[9(]\(&GF9@BG1"8_I:\WU):"T;-LN,US$N9/(D?I`HMM,M"
MINO.FMFVF@3B1FO!$_PH.383#9+N/O\`C]ES)*>)U]PGFHC+JE"9DCP9C@0^
M60\%_4?=2XB2(`^-!:N[O=(M.9@XS&-MR-DS"DD!AQ")!`+(3B-AYG2ZB00!
M+=2^*(BT$?ITK.:-AXV2[DYZ1/SVT3F8PQUZ4C1''$)0:`1Z6P012[A7M_B%
MF>[A]OBF2)23V'UQ39)(R38JXRSZA"GHH^**"N.*B6;!5);<J!I.\9+:9>1?
M'!2L7@(JHW"GS[L/R7$5?4M%)$-L!\"+G\*"<'9M=+*-XD,I%/)NH2MPA>`G
ME0$N7D1>K@E!)4"@4"@@MGVN-A48BLL'D,U-51QV)85/5=).*D2KP;:']YPN
M"?7A0:6`U"6L\,_L[X9'/\5CMA?VD`22RMQ`+QM]SI>8ODG"@M5`H(W8<)@,
MQC3BYZ*S,QS9(^;<E$5L5:\R.+?ET\[T%4TR$YL>PN[[,0DA*TL/5(ICTJU#
MO_=DJB\4.40W3^!$^-!?:!0<GDY[*X/OL6#@Q4>';68DQ]USJZ&F(+3S<@QL
MOWK9L4H.L4'PS`!(S)!`452)5LB(G-56@Y=F9DCNG+7`89PV]#CN=.?S3:J*
M3R!;^RAE^^TI)9YQ.%O*E!TZ-&CQ8S4:.V+,=@!;9:!$$0`4L(BB<D1*#F??
M'$N;+&P^I8P&UV&<^<N+(<4D2/'C!>09J"H70\A(PJ<EZZ"X:'LT38]:C3V6
M$B/-=46;C^%XLF.OINL*B?Y"'A\K4%,[F=K,_GYD;*1\H_EH\*8$L=5F.C&A
MN`@$#C8/,@CHDJ%Y>LE3FB\Z"1AIW6=B,X[$X7#ZCCF!],"==6<;8)]OHL,"
MRTG]1T&[K?:_'XW/CL^8R$G8-H%HF`R<Q1$6FS6ZC'8!$;:3Z<?G06C+X/#9
MF'[/+P6)\3J0_0DMBZ'4/(NDD5+I01N;T76<O@F\&[%2)`CNA(B#"7VQ,/-+
MU`ZRK73TD*T$$79C5)+OJ9>;E\SQNC<_)23#E:W0!-BJ?6@]-=[-Z)KNW%L^
M'QX1)B14AL,-HB--(JJKC@I;J5QR]B(E7A07B@4"@K^V[2N':9AP&/?[#D>I
MO$XU%5/4,4\SCI)^6RWS,U^B<52@:IJHXA'I\Y[]0V*>@KD\H:(A&HW46FT3
M[&6[V`$^JW7C06"@YSW:SO=#%Q3+56,='Q?M3.9FY[A=<=V]A%ID;J9%=$#R
MKYJ"VQX>8?U)F(.0=CY9R&`?J3C8$Z#RMI=PV[="EU<TM:@IDG!S9'L^WQY>
M5F/5_P!]MV4D&B/+%)5]-A.A$%OW!CT]`I^6A?&@D]KVO=L9[J'K6HE*"$SU
MAD9<EF-"00&_E$2)TD1$Y(*4'KV@V_.;?HL3/YAF.S)ENOHW[3K]$VFG2;`Q
M]15+S=/C072@IAZME7>[[6T.`*XF-A"@,&I^=)#DGU#L'P4$3C07.@YQ+U/<
M=RSLYG;S''Z9$D*&/PL)Q4/(`-K.3716_IJO)H;7_>H.@PX<2%%:B0V`C16!
M0&6&A0&P%.0B(V1$H/:@H^C`>9V;8=N?$2:<>_2,(YQO[.$2HZ2>%G9/6OSZ
M4H(^42:9W2C/-HC>`W@E9DBGVMYAH;M.(GA[AH5$OB0I0=(H%`H%`H%`H%`H
M(3;-IC:]CA>5HIF0E&D?%XQI41Z5))+BTW?EP3J(EX"**JT&II^K2<>4G,YI
MT9>SY5!7(2!_+:`>+<6.B_:TU?ZDOF7C06:@4'Q10DLJ(J?!:#4S.5C8G%2L
ME)NK,5M341XD2\A`4\2(K"GSH(K2L)+Q^-<FY1!+.Y9Q9F5<3C9PDL#(JO[K
M#=FQ^GSH);+XX<EB9N.-PV0FL.1R=;LABCH*"D-[I=+\*#4U/6X.LZUC=?@*
M2Q,8P$=HBMU$@)Q(K<+DO%:"6H%`H%!!Y[67<MD,;,#,9#&_IQJXL>$Z+;4B
MZBO2^*B76/EM^-!Y;[EY6-UJ1[%%+*3U&!C`3FLF4OI@O]%U-?DE!(Z_A8F#
MP<'#Q$M'@,`P"^)="64E^9+Q6@T-XU")MFONXF0\<1WU&Y$*<S^;'DL$AM/!
M?Q$DY>*<*"6QK$UB`PS.DI,F`*(_*1M&D<+_`#>F*J@_2]!LT"@4"@4"@4&+
MKK331NNF+;38J3CA*B"(BEU557DB4%)TUAW9<J>]3Q)(S@DQJ\-T43T(BKTG
M*LO)V7:]_!OI3XT%XH%`H%!X3(,28`-R6T=!MP'@%;VZVRZ@54\;$EZ#WH%`
MH%`H%`H%!4\@T>6[A8YC@4'7XYSG_P#VY5V8Z?TM(X7XI06R@4"@4"@4"@4"
M@4'/N\.3(\?B=1:%U7-NFCCWW&!(C;A@GJRS\MU_*'H^75>@OS##3#+;#((V
MRT*`V`I9!$4L*(GR2@SH%`H%`H%`H%`H%`H%!\(A$5(EL*)=57P1*"N:/'4X
M4S-.75_.2CF77FC"6:C"GR1D!7\:"R4"@4"@4"@4"@4"@Q5L%,3444@OT$J<
M4OP6U!E0*!0*!0*!0*!0*!0*!01^P1YTG"S8T#I27(:)ILB6R)U^52O\A55H
M-R-'9C1FH[(]#+("VV*<D$$LB?L2@]*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0
5*!0*!0*!0*!0*!0*!0*!0*!0?__9
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
<FILENAME>g48862img3.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g48862img3.jpg
M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````/```_^X`#D%D
M;V)E`&3``````?_;`(0`!@0$!`4$!@4%!@D&!08)"P@&!@@+#`H*"PH*#!`,
M#`P,#`P0#`X/$`\.#!,3%!03$QP;&QL<'Q\?'Q\?'Q\?'P$'!P<-#`T8$!`8
M&A41%1H?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?
M'Q\?'Q\?'Q\?_\``$0@`+@$U`P$1``(1`0,1`?_$`($``0`!!0$!````````
M```````&`0(#!`4'"`$!`0$```````````````````$"$``!`P,"!`0$`@4*
M!P`````!`@,$``4&$1(A,1,'05$B%&$R0A;2%7&A4F*4@9'!DB,S0]-55O&"
M4Y,D91<1`0$````````````````````1_]H`#`,!``(1`Q$`/P#ZGH%`H%`H
M%`H&E`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%`H%!YYF
MW=%Z"T_$Q2*F[W1M096^0I41J0O^[8W(XO/+_8;^7B5E(%!+\>;O;%AA)OTA
MN3>$L@SWVD!ILNGBK:D$@)3RH(;8\ER#)>Y`>MLUL8;;XCW59:`5[AYU24,.
MK61P!V.*;"?I&X_,*"=W6XQ[;!?G25;(T9!<?62`$H2-5*X^0H(GVWOF5WI=
MWGWHH3$4^VW`C-HVAE2&]7V]WS+VJ(2HJ^L*\*";T"@4$;RC*)-MN5HL]LC"
M;=[L^`&5$A#,-H@R9+A')*$D!/FH@4$CH*T&O-N$&`R'YLAN,R5H;#CJ@E.]
MQ02A.I\5$Z"@V*!0<C*<CBX]9)%SD`N=/:VQ'3\[S[B@AII'[RUD"@XO;*XY
M%=+;<+G>92)*)4UW\N#*0EE##0#1#1^92"ZA>U2N)Y^-!V;WE=BLLJ!#GR0B
M9<WDQX49(*W%K6=`=J02$CQ4>%!V*!0*!0*!0*!0*!0*!0*!0*!0*!0*!06.
MNMM-J<<4$-H!4M:B``D#4DD^`%!YW?+X,EBN2G)KMDP"'ZI]U)+#MQXZ!J.?
MF3'5R*P`ISDCSJP;^%X\J1*9ODRW)M4*$@LXO9`CIJAQU`I6\ZV/2'WP>(YI
M3PYE50:/=S(;D6H.%X^VX_?\B44+#1V^W@((]P\ZOZ$J'H!^)TXT'7L2L1PV
M`W:9EW@QIY`>EE]UEAQQQ0T"MBBDA"4@(;'@D`4$*[P=PK!=+=:\;L-TB3I-
MTG-^[++A=0U&CGJ+6YT0LE/42D;=/4>%!+\>R>RP+9%M-GM5WEQXB$MI>$%Y
M`62>+BEOAH$K42M1^.M!([;<;G+45/VQR"S])><;4X1I^PV5Z'7XT'2H,,R9
M&A17I<IQ+,9A"G7W5G1*$(&Y2E'R`H(A@<61=)]RS6<VI#EX*&K,R\"%LVMK
M^Z])^4OKU=4/B*":'=O''T:<1XZT%KCC;:%+<4$(0"I:U$!(`&I))\`*"%07
M',UOD>Z!)^T+6HN6TJ^6X2_IDA)YL,?X1/S*]7("@G%!36@\FR%NZ=P<_9M=
MN<4SA^.=07:YH_QI[@`Z,8\E*;;)2M?T;CIZM*"8W/)8%FZ6.V"&)]Y;:"8=
MHC`);80!HA4E8]+#0_>XGZ030<#`\??D9-/OMQ=1<'XRBPJY;>#T[B'^B#\K
M$5/]BT//>3QH/2#0*!0*!0*!0*!0*!0*!0*!0*!0*!04)H/.<CGP\K<N,>X3
M$V[`+0KIWB:M?13/?;(*F$/:@".TI.UW3BM7HY:T$=NF66^Z6<9M?8JV<-M:
M],2Q[;H[<Y"=$LR7&3PVA0'MT\DCUGPK0[C?=^5<+`S,M5G?;E^S,FZR9S;C
M,&WK0-7&GG%!*W7000E#8XGF161HV&X*PO%I66Y5(-PS"_N-==AQ;;2V]Y/M
MX:4E6C+;#:M[@\/4>-!UD+QR9BL3-,UL$+\ZZ1:`,;>ZX>L1';90\"YN>(26
MTGCQH,?:NU3W[U?LBN;$9ASJ)M=KB1$!+,5B,-S[32@!OU?60M?BI/D*#TC0
M?\:"M`H(%?W/O2_N8K'.['K6XA64/@D=9W@XS`;4.8.@4_Y)T3XT$[0A*4@)
M```T`'`#3R%!AGSX4"([,FR&XT1A)6\^ZH(0A(YE2CP`H(&Z9_<)APR0[:,$
M0I1<WDM2;FVV=25:Z=&&K3C]2QY#F&Y8>Y^'O^^::UM=EM9C1XERD[&(<CW&
MY#*8IU]2?1HG@-1RX4$T??9896\^XEEEM)4XZLA*4I'$E2CP`%!Y)W"[ER)6
M-ONVI;D"RRWDVV'=AJE^>^^=J?8)&IZ(X[G>9TT0/JH.MA^%95"QB!9(<I.,
MV..SM0PR@/W516=RUOON:LMN+42I6Q"M->=!V9N/M8GA5\.,QW%W5<=^3UU*
M4]*D2NF0''7%:J<7Y:_H%!N]O#83AEI18Y:9T!J.E(D)5O4IS35PN>(67"HJ
M!XZT$CT-`T-`T-`TH&AH&AH&AH%!:XZTVG<XM*$\M5$`?KH,*[A`;25N26D(
M3Q4I3B0`/B2:#7^XL>_U2'_WVOQ4&G]]X-N*?N*V;AKJGWC&HTY_705;SK!W
M%I;;R&V+6LZ)2F8P23\`%T&U]R8Y_JL/^(:_%0;34^"Z$EJ2TX%<4E*TJU'P
MT-!G''EQ_10*!0*"/9['RN3C,F-BI:1>9!0TV\^X6DM-K4`ZX%!*SN#>NWAS
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M:;/[[SCA2?\`D"J#`Q@UVOES3<\VDLS&(Z@NWXY&W&WLJ3R<>*PE4EP<P5I"
M4^`\:#>SW$[OD4"'#M]P:AL,24O3(K[2G6)3201T74H4V=FOJVZZ'30\*#SV
M[8;F]X;7:W<<:7)=4A,O()\J.&0R"`M,*/'0OI*6A(1NVZI'C03A."W&\RO=
M9I.3<8[:MT6P10INW-@<NL%>N4H>;GI_=H-5JQ/Y#W%3=)\%R-9\10J-9&GT
M!+<B8^D%V6VCEL:;T;;/GNTH)Z.5`(UH(E=.U6#7"2]+]@J%-?.YZ5;WGH3B
ME?M*Z"T)*OB10::.T5J;U4U?\A;<TT"Q=9!(^.BBI/ZJ`KM2@J)&79,D'Z1<
MCH/YT4`=J$`Z_=^3'X&Y'_+H+D]JVQJ#E62J'/4W-7]"!07/=J[<^A*7K_D"
MPCD?S20D^7TE-!B3V?L`6%+N]^=`XA*[M+*=?Y%B@R'L[A9.I-RU/_LY_P#G
M4%R.SN!!)2]%E2DD@Z2)\UW0CRW/<*"Y/9WMJ#ZK(V\/V'G7WDZ^>UQQ2:#,
MUVF[:-$E&-0./`A3*5@C]"M109V^V/;AMQ+C>+VM*TG5*A#9X'^K0;7V+@_^
MWK9_!L?@H'V+A'^WK9_!L?@H'V-A)YX];/X-C\%!B3V\P1"PM&/P$+')28[:
M2-/+04%G_P`ZPX)*6K?[<%06>@\^R=PY'5M::#;8Q:WQU)4P_,;">(09;ZT?
MU7%KH.DW'4VRVV'5JZ9XK60I2AY*.E!G\/C04.GC04].OQH*^%!;_9[CRW>/
MGI07#3PH-!W\B_-X_5,?\XZ3GM-^SW/1U'5Z>OKV:[=VG#SH-\::<*"M`H%!
M0::_&@>7ZJ!05H*>GC^N@K04X4%:!0*!0*!0*!0*!0*!0*!0*!0*!0*!0*!0
#?__9
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>5
<FILENAME>g48862img4.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g48862img4.jpg
M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````/```_^X`#D%D
M;V)E`&3``````?_;`(0`!@0$!`4$!@4%!@D&!08)"P@&!@@+#`H*"PH*#!`,
M#`P,#`P0#`X/$`\.#!,3%!03$QP;&QL<'Q\?'Q\?'Q\?'P$'!P<-#`T8$!`8
M&A41%1H?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?'Q\?
M'Q\?'Q\?'Q\?_\``$0@`,0#G`P$1``(1`0,1`?_$`'4``0`"`@,!````````
M```````%!@,$`0('"`$!`````````````````````!```@(!!`$"!`0$`PD`
M`````0(#!`4`$1(&(3$305$B%&$R(P=Q0E)B@=$5D7*"DC-#<S0E$0$`````
M````````````````_]H`#`,!``(1`Q$`/P#ZHT#0-`T#0-`T#0-`T#0-`W&@
MX5E;\K`_P.^@Y!!]-`T#0-`T#0-`T#0-`T#0-`T#0-`T'42QF0Q!U,B@,R;C
MD`=P"1\CMH.V@@\SV_%XO/8;`R!Y\GFWD6M!$`Q2.%"\DTFY'&-=MM_F=!(Y
M?*TL3C+.2NO[=6I&996`W.R_`#XD^@'ST'3"9>MF,56R=9)(X;2<UCE7C(AW
MV9'7SLRL"#H-[0-!P2`-R=A^.@YT%5O]AR^4RT^#ZQ[:/3(7+9F=?<@K.0#[
M$<8*^[/Q()&_%1Z_+0=)?VUPU]A)G[=W-S[$%K%F2*+SY/&"N88@/^'0=KO[
M6]&M!3_IQK2Q_P#3FJ3SUI%\@_FB=#\/CH-7)P=DZE7.3HWY<O@::%\CC+I]
MRTD*>7EK6?I9BB_44DWY?!@=!<*MF&U6ALP-SAG198G^:..2G_8=!ET%*QO[
MK]4FL74R-^IC(HK4E>@UBPBM8BB/MFQL?RQM*&5"?S;;Z":[9V6+!8"7)1I]
MW88I#CZL9\V+,Y"01*?[V8>?@/.@D\>;S4:YR"QI>,:FTD))B$I`YA"WDJ#Z
M;Z#F]52W2L5'9D2Q&\3/&>+J'4J2K?`C?P=!"Y+*8;H_58&L//+3HQQUH%+-
M8LRD#BJ[L>4C[`L23Z`G0;V=SU/#X.QE[`9H88PZQIMSD=]ECB3?QSD=@J_B
M=!AZIGI\UBS8LU?LKL$TM6[4$@E$<T+<67FNP;X'03.@:!H&@:#@D`;D[`>I
M.@ULGE,?BZ4EW(6$JU8AO)-(P4#_`#)^`'KH/,.F=MR67R&5S>*I/8RG8IA]
MG7L[Q0T,;1Y00O<(#.CS/[DBQ@<FW^`&^@GKE_M6!R^'.7SL-R+(V94M5$JQ
MUX8JT59Y7=&Y/+^FR+]3-\=M!@_;^K#V/-7OW%N0NLECGCL##.I5Z]"NY1VX
MG\KSRJSM^&PT&UWC+XO)T,-!7MQ3XZYD!+:GC</$T&-5[<REE.VV\`4Z#<Z+
MD:U+J&"BREJ"M?OP?<1UWD6-F,[&79%8[G;W`/&@M$]FM7C]V>5(H]P.<C!5
MW/IY.@[<T^D\AL_Y?(\_'QH,&2QU/)4I:5Q/<KS`!U!*GP000RD$$$;@C0=K
M4PK5)90"3&C,J^I)520`/B3MH*S^U*\N@8>VP'W.1A^^MR;;,\]EC+(S?CNV
MV@D,KW;KF+:[%;L[6Z(3G24<K$AE7E$L$?YI6?T4+\=!5\-V7)8SM5^SVRZF
M-I9+'Q7ZU*S,B1TQ',T0B\GS(R,K2$?S>!Z:#8M9O)=[J38SKT,M/`3DP9#/
M6XFC$T!^F6.C$VS/S7=?=8!1\.1T%@[!A,C)@8*F!L"E;Q[0RTE9G$+BOMQ@
MF*GE[;J.+:#SWNG;OW$R.1Q73Z5:+KV4SKE)>,J7+24D_P#:LJ8Q[<,:KNJ,
MV[,Q&P&@]!PW2^I8#!+BJ>/KQXV"+A)[RK)S11Y,SR;E_F2QT'F75HSD,SUB
M99S)U>/,Y$=6@1S[9K5X9BDK\M_<'/=8?Z4`V]=![7H(+'=G-_M>5P<%8FOB
M(H#9R'(<#9G!?[<+MZI'Q9CO\=!3NY32=A[I7P->;G%6(KO`!N%DE427+#?^
M*H5B7^Z703/;9Z]WM&'PMC]/%XN)^P920[B/A3;A61CZ;>Z3)L?Z-!EZ=8J8
MSI]OL-LM!4R,UO.2!@>20V7,R`K_`%>WQ\?/02'3^W)V2O<<T+&-GI3B":K;
M"B4!XDFC8A2P4M'(NZ^JGP=!LY_M>!P*(<G:$4LWBO60-)/*1\(X4#._^`T$
M?U?O^-[)E;N.I4,A7?'QQO8FNUFKIO+Y6,<_JY\?JV(]-!9]`T&*U5K6Z\E:
MS$LU>92DL3C=65AL00?4:#SKN76^N]7PPGPF/$_9+TJ8_`"S++9>.>RW'E`)
MW?@(4Y2GCMX707'J75,5U;!5<-C5;V:R!6FD/*69_P":25SY9V/S_AZ:"A05
M'[GW?,=EL'W>L];C?'X>N1^E:N0GW;,['^9(Y55!MX)7\-`ARW^B_L'BIY)^
M$EVI4@>PV_(-D9561OI!);]9MOF=!!_Z'/D.R]=ZE`D=;G!D<CGXXRH^UALS
MQ$0<%WVD>':+;?P"3H-GL-ZG/B^\R^S!D.QV[-K'X^E*$9H:6/B5'9=PW"-%
M9Y"=OS$?';07#K>)QV5JIV/+U?\`YT-<)@Z-M"17HH@_6>-]_P!68#D2PY!=
ME^>@HV%@QXPW6LU?M-7QMW,-)AI;CB**EBJKSV8%3W"O$S"-?J/U%2%]!H)_
ML?:J>2[3U[(6Q;J]*H-+;CR1BE$-N\J@5U**IE]I%9G5F'%F_AH-3L^?KYGO
M.'FNFQ4Z351+,.7FAEBKO>BD+^V&905Y*%_4<`;!E4^3H)C%YW_0;TZX1E['
MU.RSVV3&R)9M8YYGY,JQ(=Y*[,2P"_4OIL1H-C-]O_:C+1\,G?5+,8!79;-:
M\@W!XKP5+`!/JJ^N@Q]'Z?B9LWD.SOA5I12+'4PL=M"]D5HBS-8;W>3HTSOX
M4_4%`W]=!<+E3//E:4]._%!C(@PNTI(/<>;?\I24.OMD?[IT$EH*;TK]OSA,
MSF>QY6T,EV3-S,T]O8A(:JM^C5@4DE8T7U^9T&YW3JE_M"5L5)>-3KKDMF:\
M/);%M!MQK^X".$3_`/<V\D>/&@UN]X"HO5(7Q\D&+L=>>.[A9)&6*M%+64JD
M3[[*L<D9:,_('?0:&*_<&_V^HM?JL'VUU449:U<7Z:$CIRX+$>+3N?Y"/TR/
M/(^F@P]1R&8Q'6(L;3P-ZWV-BTF3GMJ*T$EZ0\IIIK!\,&;SO&&\;`:#5ZC%
MD^KW<RV4P-_)Y_)7)[4V2HHDE62-VY1QP-+*OLHH\<&^(W\Z#!E\=W&_V*3-
MY/KTCX&W7AJV<13LQ/><5)7FB]\,T<1B<RGG&CGT&Y(W&@=_L_N'G\$M;&];
MDQU"K<IVIY)IH9K4E>O,DKK%3B+*Y`7?BTGG;;8Z";P_9L+B\2]7"T<IE<AS
M:6Q&:<\4TUF;ZG>:29(8E+-^8[[+\/`T$OU?#9-+5G/YP1C-Y!40P1GFE2NF
MY2K&_P#/LS%G?8<F^&P&@@:F/_<KJT,E3%4<=V&B\\D_O2SO1NN9G+LT[%)H
MY)/.W+Z?3TT&[)V[]P(5C$O1II9&7=_M\A4=%._IR?VB?^702N-RW;;$-Z>]
M@DI"&+G1K+;2::>0*24;95CCW.R@\CH)_056MU[*V^^6\]EUC^QQL2UNLPHQ
M8K[R`V[$@]!(YVC7Y*#_`%:"RVJ\=FM+7D+".9&C<HQ5MF&QV9=B#Y]1H,%#
M$8VABX<53@6''P1>Q%`OH(]MMO\`,_'0>8=$ZC5NBYU/M-@Y%>KR_;X_#,#'
M`M-OKIVVV.\SE1LKD_0RG8`^=!Z%'TWJ\0I^UCHHCCV:2HR;HR-)MS/)2&;E
ML.7(G?XZ"0BQ>-AN378JL,=RP`MBRJ*))`OH'<#DVWXZ#9(!&Q]/EH,4M6M+
M$(I8DDB7;BCJ&4;>G@C;091X&PT'#*K*58!E/@@^01H,5>G4K`BO#'"&_,(U
M5-_X[`:#*40MR*CE_5MYT'.@:!H&@:#I+##,ACF19$/JC@,/'X'01&<ZEB,O
M)%9D$E3)5]OM\E4<P64V]%YK^=/['!7\-!&PV>^8:7V\A"G8\<2!'<J!*]Y!
M\3-`Q6&3^,94_P!N@M$$RS1AU#*"-^+@JP_`@Z#)H&@:!H&@:!H&@:!H&@K_
M`&CJ@R\M3(4K)QN=QS<J61C4,>!/ZD$JG;W(9/YE_P`1L=!,T3>-6/[X1K;V
M_6$!8Q\O[2VS;?QT&?0-`T#0-`T#0-`T#0-`T#0-`T#0-`T#0-`T#0-`T#0-
D`T#0-`T#0-`T#0-`T#0-`T#0-`T#0-`T#0-`T#0-`T#0?__9
`
end
</TEXT>
</DOCUMENT>
</SUBMISSION>
