ex_b.htm

Pursuant to the Agreement, all Citizens Financial common stock shares held by any shareholder who holds in the aggregate, 825 or more Citizens Financial common stock shares will remain common stock shares. All Citizens Financial common stock shares held by any shareholder who holds, in the aggregate, less than 825 common stock shares will be converted into the right to receive Citizens Financial Class A common stock on a one-share-for-one-share exchange basis. The Class A common stock will have rights and privileges separate and distinct from the existing common stock which are summarized below:

The Class A common stock has a right of first refusal in favor of Citizens Financial. The first of first refusal requires a Class A common stock shareholder to notify Citizens Financial in writing of the terms of any transfer or sale of the Class A common stock. Following receipt of the written notice, Citizens Financial has five business days to either request additional information regarding the sale or to immediately exercise its right of first refusal and purchase the shares of Class A common stock that are subject to the proposed transfer or sale upon the same terms as the proposed transfer or sale.

In giving our opinion, we have assumed and relied, without independent verification, upon the accuracy and completeness of all of the financial and other information that has been provided to us by Citizens Financial, and its representatives, and of the publicly available information that was reviewed by us. We are not experts in the evaluation of allowances for loan losses and have not independently verified such allowances, and have relied on and assumed that the allowance for loan losses set forth in the balance sheet of Citizens Financial at June 30, 2009 was adequate to cover such losses and complied fully with applicable law, regulatory policy and sound banking practice as of the date of such financial statements. We were not retained to and we did not conduct a physical inspection of any of the properties or facilities of Citizens Financial, did not make any independent evaluation or appraisal of the assets, liabilities or prospects of Citizens Financial, were not furnished with any such evaluation or appraisal, and did not review any individual credit files. Our opinion is necessarily based on economic, market, and other conditions as in effect on, and the information made available to us as of, the date hereof. Accordingly, it is important to understand that although subsequent developments may affect its opinion, we do not have any obligation to further update, revise, or reaffirm its opinion. We express no opinion on matters of a legal, regulatory, tax or accounting nature of the Merger or the ability of the Merger, as set forth in the Agreement, to be consummated. No opinion is expressed as to whether any alternative transaction might be more favorable to holders of Citizens Financial’s common stock than the Merger.

Howe Barnes Hoefer & Arnett, Inc. (“Howe Barnes”), as part of its investment banking business, is regularly engaged in the valuation of banks and bank holding companies, thrifts and thrift holding companies, and various other financial services companies, in connection with mergers and acquisitions, initial and secondary offerings of securities, and valuations for other purposes. In rendering this fairness opinion, we have acted on behalf of the Board of Directors of Citizens Financial and will receive a fee for our services, which is payable upon delivery of this opinion.

Howe Barnes’ opinion as expressed herein is limited to the fairness, from a financial point of view, of the merger consideration to be received by holders of Citizens Financial’s common stock and does not address Citizens Financial’s underlying business decision to proceed with the Merger. We have been retained on behalf of the Board of Directors of Citizens Financial, and our opinion does not constitute a recommendation to any director of Citizens Financial as to how such director should vote with respect to the Agreement. In rendering this opinion, we express no opinions with respect to the amount or nature of any compensation to any officers, directors, or employees of Citizens Financial, or any class of such persons relative to the consideration to be received by the holders of the common stock of the Citizens Financial in the transaction or with respect to the fairness of any such compensation.

Except as hereinafter provided, this opinion may not be disclosed, communicated, reproduced, disseminated, quoted or referred to at any time, to any third party or in any manner or for any purpose whatsoever without our prior written consent, which consent will not be unreasonably withheld, based upon review by us of the content of any such public reference, which shall be satisfactory to us in our reasonable judgment. This letter is addressed and directed to the Board of Directors of Citizens Financial in your consideration of the Merger and is not intended to be and does not constitute a recommendation to any shareholder as to how such shareholder should vote with respect to the Merger. This opinion was approved by the fairness opinion committee of Howe Barnes.

Citizens Financial Corp., Elkins, West Virginia ("Citizens Financial") has engaged Howe Barnes Hoefer & Arnett, Inc. to determine whether the terms of the proposed merger of Citizens Financial with and into CFC Merger Corp. ("Merger Corp") with Citizens Financial being the surviving corporation (the "Merger") pursuant to the Agreement of Merger (the "Agreement") are fair to the shareholders of Citizens Financial, from a financial point of view. The following presents our general observations and conclusions as a result of our analysis.

Structure of Transaction. Subject to the terms and conditions of the Agreement, Pursuant to the Agreement, all Citizens Financial common stock shares held by any shareholder who holds in the aggregate, 825 or more Citizens Financial common stock shares will remain common stock shares. All Citizens Financial common stock shares held by any shareholder who holds, in the aggregate, less than 825 common stock shares will be converted into the right to receive Citizens Financial Class A common stock on a one-share-for-one-share exchange basis. The Class A common stock will have rights and privileges separate and distinct from the existing common stock which are summarized below:

■

The Class A common stock will be allowed voting rights only if the shareholders are being asked to approve a merger, consolidation, conversion, sale of assets other than in the regular course of business, voluntary dissolution of the corporation, or as required by law. The Class A common stock will not enjoy general voting rights, including the right to participate in the annual election of directors.

■

If Citizens Financial declares dividends, dividends must be paid on the Class A common stock before dividends may be paid on the existing common stock. If dividends are paid the dividends paid on the Class A common stock will enjoy a 5% premium over and above what is paid on the existing common stock.

■

In the event Citizens Financial is party to a merger, share exchange, sale of assets other than in the regular course of business, voluntary dissolution of Citizens Financial, or other change in control which will result in the merger, sale, dissolution or effective dissolution of Citizens Financial, the Class A common stock will be converted into common stock shares and will be treated equally in all respects with the existing common stock.

■

The Class A common stock will have a liquidation preference over the existing common stock and the Class B common stock. In the event of a liquidation, the Class A common stock holders will be entitled to receive liquidation assets equal to those assets received by the common stock shareholders or the book value of the corporation's common stock, whichever is greater.

The terms of the Merger are more fully set forth in the Agreement and all capitalized items used in this paragraph shall have the meanings ascribed to them in the Agreement.

As a result of this reorganization or "going-private" transaction, Citizens Financial will have less than 300 shareholders owning Citizen Financial's existing common stock and less than 500 shareholders owning the newly created Class A common stock. Citizens Financial's management believes it will be able to suspend its SEC reporting obligations, which will allow Citizens Financial to save $200,000 to $300,000 annually.

Analysis of Comparable Going Private Transactions. We reviewed certain publicly available information regarding 17 selected going private transactions (the "Guideline Transactions") announced from June 30, 2005 to September 11, 2009 involving U.S. banking organizations. The transactions included in the group are shown on the following page and in Section 2. The data was obtained from public filings.

			Date	Dividend	Liquidation
Company	City	State	Announced	Premium	Rights
Southcrest Financial Group, Inc.	Thomaston	GA	9/11/2009	10%	Preference over common
Piedmont Community Bank Group, Inc.	Grey	GA	5/6/2009	5%	Equal to common
Thomasville Bancshares, Inc.	Thomasville	GA	11/26/2008	Equal to common	Preference over common
First Freedom Bancshares, Inc.	Lebanon	TN	10/12/2008
Class A Common				3%	Equal to common
Class B Common				5%	Equal to common
Series A Preferred				10%	Preference over common
Mountain Valley Bancshares, Inc.	Cleveland	GA	8/8/2008	5%
Treaty Oak Bancorp, Inc.	Austin	TX	11/15/2007	Equal to common	Preference over common
Tri-State 1st Banc, Inc.	East Liverpool	OH	11/9/2007	Equal to common	Preference over common
CB Financial Corp.	Wilson	NC	10/25/2007	Greater of $0.04 or same as common	Preference over common
Southern Heritage Bancshares, Inc.	Cleveland	TN	10/19/2007
Class A Common				3%	Equal to common
Class B Common				5%	Equal to common
Series A Preferred				10%	Greater of common stock or book value
Chestatee Bancshares, Inc.	Dawsonville	GA	10/19/2007
Class A Preferred				5%	Equal to common
Class B Preferred				Greater of 5% prem. on Class A Preferred or $0.10 per share annually	Equal to common
FMB Equibanc, Inc.	Statesboro	GA	10/3/2007	10%	Preference over common
First Ipswich Bancorp	Ipswich	MA	9/11/2007	Equal to common	Preference over common
Southeast Bancshares, Inc.	Athens	TN	8/15/2007
Class A Common				3%	Equal to common
Class B Common				5%	Equal to common

			Date	Dividend	Liquidation
Company	City	State	Announced	Premium	Rights
First Commerce Bancorp	Lewisburg	TN	5/29/2007
Class A Common				3%	Equal to common
Class B Common				5%	Equal to common
First McMinnville Corp.	McMinnville	TN	5/25/2007	7%	Equal to common
Legends Financial Holdings, Inc.	Clarksville	TN	3/2/2006
Class A Common				3%	Equal to common
Class B Common				5%	Equal to common
First Community Corporation	Rogersville	TN	9/27/2005
Class A Preferred				5%	Preference over common
Class B Preferred				10%	Preference over common

We reviewed the terms of the transactions and the characteristics of the new classifications of common and preferred stocks and compared them with the terms of the Merger and the newly created Class A common stock. The dividend premium for the new classifications of common and preferred stocks ranged from zero to 10% with a median of 5%. In this instance, the Class A common stock will receive a 5% premium on the dividends paid to holders of Class A common stock, which falls within the range of values in the Guideline Transactions, which supports the fairness of the transaction.

Historical Financial Analysis. We prepared an overview of the historical financial performance of Citizens Financial, as shown in Section 3.

Trading Analysis. We reviewed the closing per share market prices and volumes for Citizens Financial common stock, which is thinly traded on the OTC Bulletin Board, on a daily basis from March 11, 2009 to September 11, 2009. A price and volume chart for Citizens Financial for the period between March 11, 2009 and September 11, 2009 is contained in Section 4. For the period between March 11, 2009 and September 11, 2009, the price of Citizens Financial common stock has ranged from a low of S4.15 to a high of S9.00. The

	Current YTD		2008 FYE		2007 FYE		2006 FYE		2005 FYE
	As Reported		As Reported		As Reported		As Reported		As Reported

VALUATION RATIOS

P/E Ratio - Basic		13.0678		13.9809		19.9051		17.2170		5.2179
P/E Ratio - Diluted		13.0678		13.9809		19.9051		17.2170		5.2179
Price/Core EPS		N/A		N/A		19.7616		17.1604		5.2179
Price/LTM Core EPS		N/A		N/A		19.7616		17.1604		5.2179
Price/Book Value		0.7006		0.6144		0.9763		1.7593		1.8538
Price/Tangible Book Value		0.7006		0.6144		0.9763		1.7593		1.8538
Price/Assets		0.0638		0.0453		0.0834		0.1468		0.1526
Price/Total Deposits		0.0855		0.0588		0.1022		0.1815		0.1908
Book Value/Shane		11.7753		11.3921		11.5227		11.0838		9.2602
Tangible Book Value/Share		11.7753		11.3921		11.5227		11.0838		9.2602
Market Capitalization		15,093		12,807		20,582		35,675		36,359
Volume/LTM Average Volume		236.22		85.35		76.03		75.02		62.94

PROFITABILITY RATIOS

Return on Average Assets		0.81		0.34		0.42		0.87		0.90
Return on Average Equity		9.87		4.23		4.94		10.29		10.02
Return on Average Common Equity		N/A		N/A		N/A		N/A		N/A
Return on Assets - As Reported		N/A		0.35		0.42		0.87		0.90
Return on Equity - As Reported		N/A		4.24		4.94		10.29		10.02
Return on Common Equity - As Reported		N/A		N/A		N/A		N/A		N/A
Income before Extra Items/Avg Assets		0.81		0.34		0.42		0.87		0.90
Income before Extra Items/Avg Equity		9.87		4.23		4.94		10.29		10.02
Operating Profit/Average Assets		1.15		0.39		0.52		1.28		1.31
Operating Profit/Average Equity		14.07		4.86		6.06		15.09		14.57

Total Interest Income/AEA		5.38		6.01		6.90		6.81		6.09
Total Interest Expense/AEA		1.87		2.53		2.93		2.60		1.90
Net Interest Income/AEA		3.51		3.48		3.97		4.21		4.18
Net Interest Margin - As Reported		3.79		3.68		4.12		4.31		4.29
Noninterest Income/AEA		1.17		0.78		0.79		0.73		0.69
Overhead Expense/AEA		3.23		3.07		3.44		3.40		3.35
Net Overhead Expense/AEA		2.06		2.29		2.65		2.67		2.66

Interest Income/Average Assets		5.13		5.68		6.50		6.41		5.73
Interest Expense/Average Assets		1.78		2.39		2.76		2.45		1.79
Net Interest Income/Average Assets		3.34		3.29		3.74		3.97		3.94
Noninterest Income/Average Assets		1.12		0.74		0.75		0.69		0.65
Noninterest Expense/Average Assets		3.08		2.90		3.25		3.20		3.15
Net Operating Expense/Average Assets		1.96		2.15		2.32		2.51		2.50

Yield/Cost Spread		3.12		3.02		3.41		3.74		3.83
Int Exp/Avg Int-bearing Liabilities		2.26		2.98		3.48		3.07		2.25

Efficiency Ratio		69.10		72.01		72.33		68.73		68.72

Highline Financial, LLC

NPAs/Equity		1.37		27.75		22.26		10.89		3.04

	Current YTD		2008 FYE		2007 FYE		2006 FYE		2005 FYE
	As Reported		As Reported		As Reported		As Reported		As Reported

Core Efficiency Ratio		70.39		72.01		72.33		68.73		68.72
Noninterest Income/Total Revenue		17.92		11.49		10.32		9.69		10.16
Net Overhead Exp/Net Int Margin		58.76		65.73		66.80		63.31		63.58

Salary Expense/Total Revenues		24.11		23.39		21.81		23.10		25.78

Dividend Payout Ratio (%)		20.83		79.89		84.93		50.33		48.63
Dividend Yield		3.39		5.71		4.27		2.92		9.32
LTM Payout Ratio (%)		44.35		79.89		84.93		50.33		48.63
LTM Dividends		0.28		0.40		0.48		0.57		1.60
Effective Tax Rate		26.04		8.67		18.52		31.42		31.16

CAPITAL ADEQUACY RATIOS

Tier 1 Capital Ratio (%)		N/A		11.77		11.57		11.87		12.32
Total Capital Ratio (%)		N/A		12.99		12.52		12.95		13.30
Leverage Ratio (%)		N/A		7.70		8.75		8.49		8.46
Total Capital/Asset for Leverage (%)		N/A		8.49		9.47		9.26		9.13

Tangible Equity		21,543		20,842		21,081		20,278		19,613
Tier 1 Capital		N/A		21,690		21,565		20,540		20,084
Total Capital		N/A		23,922		23,328		22,413		21,681
Risk-weighted Assets		N/A		184,157		186,326		173,073		163,015
Assets for Leverage		N/A		281,688		246,457		241,932		237,399

Tangible Equity/Tangible Assets		9.11		7.38		8.55		8.35		8.23
% Change in Tangible Equity		2.89		-1.13		3.96		3.39		-3.01
% Change in Tier 1 Capital		N/A		0.58		4.99		2.27		0.31
% Change in Total Capital		N/A		2.55		4.08		3.38		1.31

Goodwill/Equity		N/A		N/A		N/A		N/A		N/A
Total Intangible Assets/Equity		N/A		N/A		N/A		N/A		N/A
Total Debt/Equity		155.96		189.00		106.14		115.12		130.81
Long-term Debt/Equity		35.57		35.77		11.12		13.41		18.25
Long-term Debt/Total Debt		22.81		18.93		10.48		11.65		13.95
Nonperf Loans/Core Capital + Reserve		N/A		24.18		20.12		9.85		2.75

ASSET QUALITY RATIOS

Nonperforming Loans/GL		0.10		3.25		2.72		1.31		0.39
Unreserved Nonperf Lns/GL		-1.34		2.00		1.70		0.20		-0.65
Loans Past Due 90+ Days/GL		N/A		0.18		0.12		0.00		0.35
Nonaccrual Loans/GL		0.10		3.07		2.60		1.31		0.04
Restructured Loans/GL		N/A		0.00		0.00		N/A		N/A

NPAs/(Loans + OREO)		0.18		N/A		N/A		N/A		N/A
NPAs/Equity		1.37		27.75		22.26		10.89		3.04

	Current YTD		2008 FYE		2007 FYE		2006 FYE		2005 FYE
	As Reported		As Reported		As Reported		As Reported		As Reported

NPAs (Net of Loan Loss Rsrv)/Equity		-9.41		17.04		13.90		1.65		-5.10
Nonperforming Assets/TA		0.13		2.05		1.90		0.91		0.25
Nonperforming Loans/TA		0.07		2.05		1.90		0.91		0.25
OREO/TA		0.06		N/A		N/A		N/A		N/A

Loan Loss Reserve/GL		1.44		1.25		1.02		1.11		1.04
Loan Loss Reserve/Nonperf Loans		1,470.89		38.59		37.57		84.83		267.95
Loan Loss Reserve/Nonperf Assets		785.14		38.59		37.57		84.83		267.95
Equity + Loan Loss Reserve/Assets		10.10		8.17		9.26		9.12		8.90
Net Charge-offs/Ln Loss Reserve		17.38		66.76		107.37		7.85		3.51

Net Charge-offs/Avg Loans		0.23		0.85		1.11		0.09		0.04
Loan Loss Provision/Avg Loans		0.34		1.12		1.05		0.26		0.18
Loan Loss Provision/Net Charge-offs		145.54		131.48		94.19		287.76		491.07

LIQUIDITY RATIOS

Total Loans/Total Deposits		90.12		80.82		84.92		84.57		79.87
Noninterest-bearing Deposits/TD		14.53		13.59		13.87		13.79		15.04

Total Nonearning Assets/Total Assets		5.14		5.42		6.93		6.99		7.22
Total Earning Assets/Total Assets		95.84		95.37		93.79		93.78		93.45
Avg Earning Asst/Avg Int-bear Liab		120.56		117.92		118.98		118.29		118.42

Current YTD

2008 FYE

2007 FYE

2006 FYE

2005 FYE

As Reported

BALANCE SHEET

Assets

Cash and Cash Equivalents:

3,244

13,381

7,062

6,095

8,773

Cash and Due from Banks

3,103

3,943

7,050

6,065

6,770

Fed Funds Sold & Secs Purchased

N/A

2,003

Interest-bearing Deposits in Banks

141

9,438

N/A

Other Cash and Equivalents

N/A

Total Securities:

65,176

82,051

58,559

59,746

66,854

Investment Secs Available for Sale

45,636

59,284

51,048

50,642

59,347

Investment Secs Held-to-Maturity

N/A

MBS Available for Sale

17,887

21,575

6,561

8,226

6,803

MBS Held-to-Maturity

N/A

FHLB Stock

N/A

842

770

596

Trading Account Assets

N/A

Restricted Investments

1,653

N/A

Other Securities

N/A

1,192

108

Total Cash and Securities

68,420

95,432

65,621

65,841

75,627

Total Loans, Gross

161,237

177,953

172,702

168,091

153,733

Less: Allowance for Ln & Lse Losses

2,324

2,232

1,763

1,873

1,597

Total Loans, Net

158,913

175,721

170,939

166,218

152,136

Total Interest Earning Assets

226,554

269,442

231,273

227,867

222,590

Customer Acceptance Liability

N/A

Credit Card Receivables

N/A

Premises and Fixed Assets

2,651

4,106

4,260

4,331

4,192

Other Real Estate Owned

138

N/A

Acquired Real Estate

N/A

Intangible Assets:

N/A

Goodwill

N/A

Loan Servicing Rights

N/A

Other Intangible Assets

N/A

Total Other Assets

6,261

7,275

5,774

6,591

6,234

Loans Held for Sale

N/A

Accrued Interest Receivable

1,049

1,410

1,385

1,393

1,321

Deferred Income Taxes

N/A

Bank Owned Life Insurance

N/A

Income Taxes Receivable

N/A

Cash Surrender Value Life Ins Policy

N/A

Other Assets

5,212

5,865

4,389

5,198

4,913

Total Assets

236,383

282,534

246,595

242,980

238,190

Current YTD

200S FYE

2007 FYE

2006 FYE

2005 FYE

As Reported

Liabilities

Total Deposits:

176,337

217,429

201,296

196,543

190,486

Total Domestic Deposits:

176,337

217,429

201,296

196,543

190,486

Noninterest-bearing Deposits

25,619

29,552

27,920

27,103

28,648

Interest-bearing Deposits

150,718

187,876

173,377

169,440

161,838

Total Foreign Deposits:

N/A

Noninterest-bearing Deposits

N/A

Interest-bearing Deposits

N/A

Total Borrowings:

33,599

39,391

22,375

23,345

25,656

Short-term Borrowings

25,936

31,935

20,030

20,626

22,076

Short-term FHLB Advances

409

375

793

1,565

Federal Funds Purch & Sec Sold

25,936

30,286

15,658

16,395

19,080

Commercial Paper

N/A

Other Short-term Borrowings

1,240

3,998

3,438

1,431

Long-term Borrowings

7,663

7,456

2,344

2,719

3,580

Long-term FHLB Advances

7,663

7,456

2,344

2,719

3,580

Senior Debt

N/A

Subordinated Debt

N/A

Trust Preferred Securities

N/A

Other Long-term Borrowings

N/A

Total Interest-bearing Liabilities

184,317

227,267

195,752

192,785

187,494

Acceptances Outstanding

N/A

Advance Payments by Borrowers

N/A

Total Other Liabilities

4,904

4,873

1,843

2,814

2,434

Accrued Interest Payable

N/A

Income Tax Payable

N/A

Dividends Declared, Not Yet Paid

N/A

All Other Liabilities

4,904

4,873

1,843

2,814

2,434

Total Liabilities

214,840

261,693

225,514

222,702

218,577

Total Mezzanine Items

N/A

Mandatory Redeem Pre Stk

N/A

Total Contingencies

Minority Interest

N/A

Other Contingencies

N/A

Other Mezzanine Items

N/A

Equity

Total Preferred Stock

Preferred Stock

N/A

Redeemable Preferred Stock

N/A

Common Stock & Surplus

N/A

Common Stock (Aggregate Par Value)

4,500

1,500

Additional Paid in Capital

N/A

2,100

Common Stock Warrants

N/A

Retained Earnings

21,945

21,110

20,999

20,843

20,705

Accumulated Other Comprehensive Inc

-1,070

-937

-586

-1,233

-1,316

	Current YTD		200S FYE		2007 FYE		2006 FYE		2005 FYE
	As Reported		As Reported		As Reported		As Reported		As Reported

Net Unrealized Gain/Loss on Securities		-1,070		-937		-586		-1,233		-1,316
Cumulative Foreign Currency Translation Adj		N/A		N/A		N/A		N/A		N/A
Less:Treasury Stock		3,832		3,832		3,832		3,832		3,375
ESOP		N/A		N/A		N/A		N/A		N/A
Deferred Compensation		N/A		N/A		N/A		N/A		N/A
Other Equity		0		N/A		N/A		N/A		N/A
Total Equity		21,543		20,842		21,081		20,278		19,613
Total Liabilities and Equity		236,383		282,534		246,595		242,980		238,190

Total Shares Outstanding		1,829,504		1,829,504		1,829,504		1,829,504		2,117,988
Treasury Shares Outstanding		420		420		420		420		132
Preferred Shares Outstanding		N/A		N/A		N/A		N/A		N/A

INCOME STATEMENT

Interest Income
Interest and Fees on Loans		5,121		11,945		13,431		12,934		10,745
Interest and Fees on Commercial Loans		N/A		N/A		N/A		N/A		N/A
Interest and Fees on Consumer Loans		N/A		N/A		N/A		N/A		N/A
Interest and Dividends on Securities		N/A		3,075		2,426		2,349		2,108
Interest and Dividends on Secs Avail for Sale		N/A		N/A		N/A		N/A		N/A
Interest and Dividends on Secs Held to Maturity		N/A		N/A		N/A		N/A		N/A
Interest and Dividends on Tax Investment Secs		1,110		N/A		N/A		N/A		N/A
Interest and Dividends on Tax Exempt Investme		408		N/A		N/A		N/A		N/A
Inton Fed Funds Sold & Sec Purch		0		28		14		21		123
Interest on Commercial Paper		N/A		N/A		N/A		N/A		N/A
Interest on Trading Account Secs		N/A		N/A		N/A		N/A		N/A
Interest on Deposits with Banks		40		128		96		48		N/A
Interest and Dividends on FHLB Stock		N/A		N/A		N/A		N/A		N/A
Other Interest Income		0		1		0		-1		0
Total Interest Income		6,679		15,177		15,967		15,351		12,976

Interest Expense
Interest on Deposits		1,943		5,681		5,962		4,882		3,377
Interest Exp on Short Term Borrowings		235		462		684		801		502
Interest Exp on Federal Funds Purchased		N/A		N/A		N/A		N/A		N/A
Interest Exp on Long Term Borrowings		146		247		135		173		178
Ineterest Exp on Borrowed Funds		N/A		N/A		N/A		N/A		N/A
Other Interest Expense		0		0		0		0		-1
Total Interest Expense		2,324		6,390		6,781		5,856		4,056

Net Interest Income		4,355		8,787		9,186		9,495		8,920
Provision for Loan Losses		294		1,959		1,783		423		275
Net Interest Income after Provision		4,061		6,828		7,403		9,072		8,645

Current YTD

2008 FYE

2007 FYE

2006 FYE

2005 FYE

As Reported

Noninterest Income

Service Charges on Deposits

498

1,143

1,018

852

772

Trust Income

126

306

231

207

201

Loan Servicing Income and Fees

N/A

Trading Account Income

N/A

Credit Card Fees

N/A

Debit Card Fees

N/A

Overdraft Charges

N/A

Discount Interchange Revenue

N/A

Earnings Investment in Life Insurance

N/A

Insurance

N/A

Real Estate Commissions

N/A

Real Estate Management Fees

N/A

Secondary Market Origination Fees

N/A

Securitization Income

N/A

Transaction Processing Fees

N/A

Merchant Card Services

N/A

Non Deposit Investment Product Fees

N/A

VISA Share Redemption

N/A

Bank Owned Life Insurance Income

N/A

Foreign Exchange Income

N/A

Gain/Loss on Sale of Loans

N/A

Brokerage Income

160

117

Gain/Loss on Sale of OREO

N/A

Other Noninterest Income

768

361

428

472

416

Total Noninterest Income

1,458

1,970

1,837

1,648

1,468

Total Revenues

8,137

17,147

17,804

16,999

14,444

Noninterest Expense

Salaries and Employee Benefits

1,962

4,011

3,883

3,926

3,723

Occupancy and Equipment

381

795

812

823

817

Foreclosed Property Expense

N/A

441

N/A

Amortization on Intangibles

N/A

Amortization on Interest Only Strip

N/A

ATM

N/A

Legal & Professional Fees

144

427

421

350

246

FDIC Premiums

243

N/A

Postage

N/A

Data Processing

336

565

517

524

599

Directors Fees

137

N/A

Other Noninterest Expense

744

1,913

1,899

2,036

1,754

Total Noninterest Expense

4,017

7,746

7,973

7,659

7,139

G&A Expense

4,017

7,711

7,532

7,659

7,139

Operating Profit

1,502

1,052

1,267

3,061

2,975

Securities Gains (Losses)

-49

-18

Nonrecurring Income

-163

N/A

	Current YTD		2008 FYE		2007 FYE		2006 FYE		2005 FYE
	As Reported		As Reported		As Reported		As Reported		As Reported

Nonrecurring Expense		N/A		N/A		N/A		N/A		N/A
Total Nonrecurring Items		163		N/A		N/A		N/A		N/A

Income Before Taxes		1,425		1,003		1,269		3,043		2,975
Provision for Income Taxes		371		87		235		956		927
Aftertax Nonrecurring Items		106		N/A		N/A		N/A		N/A

Income Before Extraordinary Items		1,054		916		1,034		2,087		2,047
Extraordinary Items		N/A		N/A		N/A		N/A		N/A
Net Income		1,054		916		1,034		2,087		2,047
Comprehensive Income		921		566		1,681		2,169		673

Memorandum:
Net Income Applic to Common Shares		1,054		916		1,034		2,087		2,047
Core Income		1,104		948		1,033		2,099		2,047

Net Interest Income, FTE		N/A		9,300		9,530		9,721		9,143
Net Income Before Taxes, FTE		1,425		1,516		1,613		3,269		3,198
Taxable Equivalent Adjustment		N/A		513		344		226		223

Average Shares O/S - Basic		1,829,504		1,829,504		1,829,504		1,842,662		622,188
Average Shares O/S - Diluted		1,829,504		1,829,504		1,829,504		1,842,662		622,188

Total Dividends Paid:		219		732		878		1,048		993
Preferred Dividends		0		0		0		0		0
Common Dividends		219		732		878		1,048		993

Dividends per Share-Common Stock		0.12		0.40		0.48		0.57		1.60

EPS As Reported - Basic		0.58		0.50		0.57		1.13		3.29
EPS As Reported - Diluted		0.58		0.50		0.57		1.13		3.29

EPS Before Extra Items - Basic		0.58		0.50		0.57		1.13		3.29
EPS - Basic		0.58		0.50		0.57		1.13		3.29
EPS Before Extra Items - Diluted		0.58		0.50		0.57		1.13		3.29
EPS - Diluted		0.58		0.50		0.57		1.13		3.29
Core EPS		0.60		0.52		0.56		1.14		3.29
Core LTM EPS		N/A		N/A		0.57		1.14		3.29

LTM EPS Before Extra Items - Diluted		0.63		0.50		0.57		1.13		3.29
LTM EPS After Extra Items - Diluted		0.63		0.50		0.57		1.13		3.29

Subchapter S		N/A	No		No		No		No

	Current YTD		2008 FYE		2007 FYE		2006 FYE		2005 FYE
	As Reported		As Reported		As Reported		As Reported		As Reported

CASH FLOW STATEMENT

Cash and Cash Equiv., beginning of the year		13,381		7,062		6,095		N/A		N/A
Cash Flows from Operating Activities		2,039		3,141		3,056		N/A		N/A
Cash Flows from Investing Activities		34,072		-29,239	^,993			N/A		N/A
Cash Flows from Financing Activities		-46,248		32,417		2,905		N/A		N/A
Net Inc/Dec in Cash and Cash Equiv.		-10,137		6,319		967		N/A		N/A
Cash and Cash Equiv., end of the year		3,244		13,381		7,062		N/A		N/A

AVERAGE BALANCES

Average Securities		72,940		71,748		59,130		61,822		60,165
Average Loans, Gross		172,896		175,544		170,263		162,252		149,177
Average Earning Assets		248,411		252,644		231,559		225,451		213,149
Average Assets		260,636		267,014		245,527		239,464		226,465
Average Interest-bearing Deposits		199,948		188,879		172,324		164,372		153,067
Average Interest-bearing Liabilities		206,050		214,246		194,618		190,587		180,000
Average Equity		21,357		21,639		20,913		20,284		20,421

ASSET QUALITY

Loans Past Due 90+ Days		N/A		313		206		0		538
Nonaccrual Loans		158		5,471		4,487		2,208		58
Restructured Loans		N/A		0		0		N/A		N/A
Nonperforming Loans		158		5,784		4,693		2,208		596
Other Real Estate Owned		138		N/A		N/A		N/A		N/A
Total Nonperforming Assets		296		5,784		4,693		2,208		596
Charge-offs		218		1,771		1,935		162		90
Recoveries		-16		-281		-42		-15		-34
Net Charge-offs		202		1,490		1,893		147		56

	Section
Discussion	1
Selected Comparable Transactions	2
Historical Financial Analysis	3
Historical Stock Trading Analysis	4

	Sincerely,

	/s/ Hoew Barnes Hoefer & Arnett, Inc.

	Howe Barnes Hoefer & Arnett, Inc.