Teche Holding Company Earns $0.80 per Share for Second Quarter Record $1.62 for Fiscal Year to Date 2010

FRANKLIN, LA, Apr 22 (MARKET WIRE) --
Patrick Little, President and CEO of Teche Holding Company (NYSE Amex:
TSH), holding company for Teche Federal Bank, today reported on earnings
for the Company for the quarter ended March 31, 2010, the second quarter
of fiscal 2010.

Earnings for the quarter ended March 31, 2010 amounted to $1.7 million, or
$0.80 per diluted share, compared to $1.7 million, or $0.78 per diluted
share, for the same quarter in fiscal 2009, an increase of $0.02 per
diluted share, or 2.6%.

Earnings for the six month period ended March 31, 2010 amounted to $3.4
million, or a record $1.62 per diluted share, compared to $3.4 million, or
$1.61 per diluted share, for the same period in fiscal 2009, an increase
of $0.01 per diluted share, or 0.6%.

"Our record earnings of $1.62 diluted EPS for the fiscal year to date is
remarkable, especially considering that we posted record EPS for fiscal
2009," said Little.

The Company reported the following key achievements:

-- Diluted EPS for the quarter remained robust at $0.80.
-- Net Charge Offs for the quarter amounted to 0.07% of average loans.
-- Tangible equity increased to 9.20% at March 31, 2010.
-- Tangible book value per share increased to a record $33.27
-- The Bank's total risk-based capital was a strong 12.91% at March 31,
2010.
-- Quarterly operating revenue increased 1.9% to $11.4 million from $11.2
million in fiscal 2009.
-- SmartGrowth Loans in the past twelve months increased $11.4 million or
2.5%. SmartGrowth Loans now comprise 77.8% of all loans.
-- SmartGrowth Deposits in the past twelve months increased $19.9 million
or 5.3%. SmartGrowth Deposits now comprise 67.3% of all deposits.
-- Quarterly Dividends were maintained at $0.355 per share compared to
$0.35 per share for the quarter ended March 31, 2009, an increase of
1.4%.

Asset Quality

Non-performing assets totaled $17.3 million, or 2.3% of total assets, at
March 31, 2010, compared to $11.9 million, or 1.58% of total assets, at
December 31, 2009, and $8.3 million, or 1.05% of total assets, a year ago.
Non-performing assets consist of non-accrual loans, accruing loans 90 days
or more past due and other real estate owned.

The $5.4 million increase this quarter was primarily due to loans totaling
$6.4 to a commercial credit relationship involving a residential land
development and five show homes in the Baton Rouge market area that the
borrower of which filed for protection under chapter 11 bankruptcy. Due to
the bankruptcy, Management indicated that an extended period of time may
be required to resolve this credit but feels that the allowance for loan
loss is adequate to absorb losses, if any.

The following table sets forth asset quality ratios for each of the past
five quarters:

Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
------- ------- ------- ------- -------
Net Charge-offs/Average Loans 0.07% 0.04% 0.22% 0.03% 0.03%
ALLL/NPLs 52.18% 72.12% 95.44% 74.34% 84.60%
ALLL/NPAs 47.76% 64.83% 74.85% 68.01% 77.78%
ALLL/Loans 1.37% 1.29% 1.14% 1.10% 1.05%
Non-Accrual Loans/Loans 2.32% 1.59% 1.02% 1.07% 0.84%
NPAs/Assets (Net of specific
reserves) 2.00% 1.58% 1.19% 1.27% 1.05%

Net charge-offs for the quarter were $0.4 million, or 0.07% of average
loans, compared to $0.2 million or 0.03% of average loans for the same
period a year ago. For the last four quarters, net charge-offs were 0.36%
of average loans.

The following table sets forth the activity in the allowance for loan
losses for each of the past 5 quarters.

(in 000's) Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
------- ------- ------- ------- -------
Beginning ALLL $ 7,744 $ 6,806 $ 6,836 $ 6,478 $ 5,631
Provision for Loan Losses 900 1,196 1,286 550 1,035
Net Charge-offs 391 258 1,316 192 188
Ending ALLL $ 8,253 $ 7,744 $ 6,806 $ 6,836 $ 6,478

The Company recorded a loan loss provision during the quarter of $0.9
million. As a result the allowance for loan losses was 1.37% of total
loans, or $8.3 million, at March 31, 2010 compared to 1.04% of total
loans, or $6.5 million at March 31, 2009 and 1.29% of total loans, or
$7.8 million at December 31, 2009.

Operating Revenue

Operating revenue for the quarter, consisting of net interest income
(before provisions for loan losses) plus non-interest income, amounted to
$11.4 million, an increase of 1.9% or $0.2 million, compared to $11.2
million for the same period in fiscal 2009.

The table below reflects Teche's operating revenues in millions over the
past five quarters:

Operating Revenue Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
-------- -------- -------- -------- --------
Net Interest Income $ 7.4 $ 7.4 $ 7.5 $ 7.6 $ 7.1
Non Interest Income 4.0 4.0 4.2 4.0 4.1
-------- -------- -------- -------- --------
Operating Revenue $ 11.4 $ 11.4 $ 11.7 $ 11.6 $ 11.2
======== ======== ======== ======== ========

Net Interest Income

Net interest income for the three months ended March 31, 2010 amounted to
$7.4 million compared to $7.0 million for the quarter ended March 31,
2009, an increase of 5.3%, or $0.4 million primarily due to a decrease in
the cost of interest bearing liabilities.

Net Interest Margin and Spread

Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
------- ------- ------- ------- -------
Yield on Earning Assets 5.99% 6.01% 6.01% 6.07% 6.11%
Cost of Interest Bearing
Liabilities 1.91% 1.99% 2.12% 2.22% 2.47%
Spread 4.08% 4.02% 3.88% 3.85% 3.64%
Net Interest Margin 4.29% 4.26% 4.14% 4.12% 3.92%

Net interest margin amounted to 4.29% for the three-month period ended
March 31, 2010; compared to 3.92% for the three-months ended March 31,
2009. The increase was primarily due to a decrease in the cost of interest
bearing liabilities.

Spread amounted to 4.08% for the three month period ended March 31, 2010,
compared to 3.64% for the same period in the previous year. Compared to
the same quarter last year, average yield on earnings assets decreased 12
basis points from 6.11% to 5.99%, while average cost of funds decreased 56
basis points from 2.47% to 1.91%.

"Our increased net interest income this quarter compared to fiscal 2009 is
the result of our focus on SmartGrowth Deposits and Loans, and also due to
lower market interest rates," said Little. "The result has been higher
margin and higher spread."

Non Interest Income

Non-interest income remained stable at $4.0 million for the quarter
compared to $4.0 million in the linked quarter and $4.1 million a year
ago. This amounted to 2.08% of average assets for the quarter, compared
to 2.11% for the linked quarter and 2.12% a year ago. Deposit fees
comprised 90.2% of non-interest income for the quarter, compared to 91.9%
for the linked quarter and 90.9% a year ago.

Non-interest income amounted to 34.7% of operating income for the quarter
ended March 31, 2010, compared to 37.0% for the three months ended March
31, 2009 and to 35.1% for the linked quarter.

"There has been considerable interest and discussion regarding the
potential impact to non-interest income because of the effect of the new
debit card 'opt-in' regulation," said Little. "At Teche, we started our
opt-in program early. Thus far, we have engaged over 85% of our customers
and over 82%, or approximately 96% of those engaged, have opted in. It is
clear that our customers appreciate and value our services. Of the few
customers not opting-in, the majority seldom incur services charges. We
expect that, by the August 15 deadline, approximately 95% of our affected
customers will have opted-in. Debit card related service charge income is
less than 30% of non-interest income. As a result, we believe that the new
regulation will not have a material effect on our non-interest income. It
is also possible that we could see an increase in new customers who
appreciate this service that other banks may discontinue."

Non Interest Expense

For the quarter, non-interest expense was $8.0 million or 4.20% of average
assets, compared to the linked quarter of $7.6 million or 4.01% of average
assets, an increase of 5.3%, primarily due to compensation and occupancy
expenses. Compared to the same quarter in fiscal 2009, non-interest
expense increased slightly.

Net Income

Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
------- ------- ------- ------- -------
Net Income $ 1,700 $ 1,733 $ 1,983 $ 1,733 $ 1,656
Dividends Declared Per Share $ 0.355 $ 0.355 $ 0.355 $ 0.35 $ 0.35
Basic Earnings Per Common
Share $ 0.81 $ 0.83 $ 0.95 $ 0.82 $ 0.78
Diluted Earnings Per Common
Share $ 0.80 $ 0.82 $ 0.94 $ 0.81 $ 0.78
Annualized Return on Avg.
Assets 0.89% 0.91% 1.01% 0.88% 0.85%
Annualized Return on Avg.
Equity 9.14% 9.37% 10.91% 9.55% 9.24%
Annualized Return on Avg.
Tangible Equity 9.64% 9.91% 11.53% 10.11% 9.79%

"The bottom line is that our net income has been consistent and
substantial for the past five quarters," said Little.

Since 2003, the Company has increased dividends for seven consecutive
years and on March 31, 2010 paid a $0.355 per share quarterly dividend,
its fifty-ninth consecutive. Based on the closing price of the Company's
common stock on March 31, 2010 of $32.90, the annualized dividend yield
was
4.3%.

Capital

Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
------- ------- ------- ------- -------
Ratio of Equity to Assets 9.63% 9.55% 9.34% 8.87% 8.81%
Tangible Equity Ratio (2) 9.20% 9.07% 8.90% 8.44% 8.38%
Risk-Based Capital Ratio 12.91% 12.70% 12.72% 12.15% 11.98%
Book Value per Common Share $ 35.02 $ 34.49 $ 34.09 $ 33.43 $ 33.08
Tangible Book Value Per Common
Share $ 33.27 $ 32.74 $ 32.33 $ 31.67 $ 31.33

The tangible equity ratio increased to 9.20%, compared to 8.38% a
year ago, primarily due to earnings. Tangible book value per common share
increased to $33.27, from $31.33 a year ago, an increase of $1.94, or
6.2%, primarily due to earnings. "We have increased our capital and
various capital ratios by organic capital growth. We are very pleased
that we did not take TARP," said Little.

Loan Growth

Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
--------- --------- --------- --------- ---------
SmartGrowth Loans
Consumer $ 110,438 $ 109,899 $ 108,013 $ 106,563 $ 104,524
Commercial 212,485 213,505 210,201 209,091 204,973
Home Equity 57,443 57,373 58,348 58,216 57,852
SmartMortgages 86,677 86,462 83,775 88,200 88,305
--------- --------- --------- --------- ---------
Total SmartGrowth Loans $ 467,043 $ 467,239 $ 460,337 $ 462,070 $ 455,654
Mortgage Loans (owner
occupied conforming) 133,478 135,048 134,996 156,759 157,954
--------- --------- --------- --------- ---------
Total Loans $ 600,521 $ 602,287 $ 595,333 $ 618,829 $ 613,608

Three Month Period. Gross loans receivable decreased to $600.5
million at March 31, 2010, from $602.3 million at December 31, 2009, a
linked quarter decrease of $1.8 million, or 0.3%. SmartGrowth Loans,
consisting of commercial loans, home equity loans, SmartMortgage loans
and consumer loans, were $467.0 million, or 77.8% of total loans at March
31, 2010, compared to $467.2 million, or 77.6% at December 31, 2009.

Commercial loan balances at March 31, 2010 amounted to $212.5 million,
compared to $213.5 million at December 31, 2009, a three month decrease of
$1.0 million or 0.5%. Consumer loan balances at March 31, 2010 amounted to
$110.4 million, compared to $109.9 million at December 31, 2009, a linked
quarter increase of $0.5 million, or 0.5%.

Twelve Month Period. Gross loans receivable decreased to $600.5 million at
March 31, 2010 from $613.6 million at March 31, 2009 a twelve month
decrease of $13.1 million, or 2.1% primarily due to the sale, in 2009, of
$26 million in fixed rate mortgage loans, $5 million of which were
SmartMortgages. SmartGrowth Loans increased to $467.0 million at March 31,
2010, from $455.6 million at March 31, 2009, a twelve month increase of
$11.4 million, or 2.5%.

Commercial loan balances at March 31, 2010 amounted to $212.5 million,
compared to $205.0 million at March 31, 2009 a twelve month increase of
$7.5 million, or 3.7%. Consumer loan balances at March 31, 2010 amounted
to $110.4 million, a twelve month increase of $5.9 million, or 5.7%.
Commercial loan balances totaling about $59 million had average floor
interest rates of approximately 4.5% at March 31, 2010.

Deposit Growth

Mar '10 Dec '09 Sep '09 Jun '09 Mar '09
--------- --------- --------- --------- ---------
SmartGrowth Deposits
Checking $ 177,174 $ 170,552 $ 165,796 $ 168,733 $ 175,477
Money Market 68,763 80,034 95,461 108,668 120,865
Savings 149,233 128,254 106,479 93,485 78,944
--------- --------- --------- --------- ---------
Total SmartGrowth
Deposits $ 395,170 $ 378,840 $ 367,736 $ 370,886 $ 375,286
Time Deposits 191,573 196,651 217,733 234,556 236,403
--------- --------- --------- --------- ---------
Total Deposits $ 586,743 $ 575,491 $ 585,469 $ 605,442 $ 611,689

"Our SmartGrowth deposits increased both on a linked-quarter basis
and over the past year and our cost of interest bearing liabilities
decreased by 56 basis points," said Little. "This is consistent with our
long-term SmartGrowth strategy."

Three Month Growth. Total deposits increased to $586.7 million at March
31, 2010, from $575.5 million at December 30, 2009, a linked quarter
increase of $11.2 million or 2.0%. The Company's SmartGrowth Deposit
Accounts, consisting of checking accounts, money market accounts, and
savings accounts, had solid growth. Total SmartGrowth Deposits increased
$16.3 million to $395.2 million or 4.3% at March 31, 2010, from $378.8
million at December 31, 2009.

Checking account balances at March 31, 2010 increased $6.6 million, or
3.9%, to $177.2 million from $170.6 million at December 31, 2009.

Twelve Month Growth. Total deposits decreased to $586.7 million at March
31, 2010, from $611.7 million at March 31, 2009, a twelve month decrease
of $24.9 million, or 4.1% primarily due to reductions in total time
deposit balances, especially from June 2009 to December 2009, concurrent
with the sale of loans, described above. Total SmartGrowth Deposits grew
$19.9 million, or 5.3% from $375.2 million at March 31, 2009.

SmartGrowth Deposits amounted to 67.3% of total deposits as of March 31,
2010 compared to 61.4% at March 31, 2009.

Checking account balances at March 31, 2010 increased 1.0% or $1.7 million
in the past 12 months. Checking account balances now account for 30.2% of
total deposits compared to 28.7% at March 31, 2009.

Teche Holding Company is the parent company of Teche Federal Bank, which
operates twenty offices in South Louisiana and serves over 60,000
customers. Teche Federal Bank is the fourth largest publicly owned bank
based in Louisiana with over $763 million in assets. Deposits at Teche
Federal Bank are insured up to the legal maximum amount by the Federal
Deposit Insurance Corporation (FDIC). Teche Holding Company's common stock
is traded under the symbol "TSH" on the NYSE AMEX.

Statements contained in this news release, which are not historical facts,
are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
are subject to risks and uncertainties which could cause actual results to
differ materially from those currently anticipated due to a number of
factors, which include, but are not limited to, factors discussed in
documents filed by Teche Holding Company with the Securities and Exchange
Commission from time to time. The Company does not undertake to update
any forward-looking statement, whether written or oral, that may be made
from time to time by or on behalf of the Company.

TECHE HOLDING COMPANY
(Dollars in thousands, except per share data)
Franklin, LA
Statements of Income
(UNAUDITED)

THREE MONTHS ENDED
------------------------------------------------
Mar. Dec. Sep. Jun. Mar.
2010 2009 2009 2009 2009
-------- -------- -------- -------- --------
Interest Income $ 10,374 $ 10,500 $ 10,880 $ 11,130 $ 11,013
Interest Expense 2,940 3,067 3,386 3,583 3,950
-------- -------- -------- -------- --------
Net Interest Income 7,434 7,433 7,494 7,547 7,063
Provision for Loan Losses 900 1,196 1,286 550 1,035
-------- -------- -------- -------- --------
Net Interest Income after
Provision for Loan Losses 6,534 6,237 6,208 6,997 6,028
Non Interest Income 3,956 4,014 4,225 4,036 4,114
Non Interest Expense 7,980 7,641 7,894 8,204 7,678
-------- -------- -------- -------- --------
Income Before Gain on
Securities and Sale of
Loans 2,510 2,610 2,539 2,829 2,464
Gain on Securities (8) (36) (183) (434) 18
Gain on Sale of Loans -- -- 559 -- --
Income Taxes 802 841 932 662 826
-------- -------- -------- -------- --------
Net Income (loss) $ 1,700 $ 1,733 $ 1,983 $ 1,733 $ 1,656
======== ======== ======== ======== ========
Selected Financial Data

Dividends Declared Per
Share $ 0.355 $ 0.355 $ 0.355 $ 0.35 $ 0.35
Basic Earnings Per Common
Share $ 0.81 $ 0.83 $ 0.95 $ 0.82 $ 0.78
Diluted Earnings Per
Common Share $ 0.80 $ 0.82 $ 0.94 $ 0.81 $ 0.78
Annualized Return on Avg.
Assets 0.89% 0.91% 1.01% 0.88% 0.85%
Annualized Return on Avg.
Equity 9.14% 9.37% 10.91% 9.55% 9.24%
Annualized Return on Avg.
Tangible Equity (1) 9.64% 9.91% 11.53% 10.11% 9.79%
Yield on Interest Earning
Assets 5.99% 6.01% 6.01% 6.07% 6.11%
Cost of Interest Bearing
Liabilities 1.91% 1.99% 2.12% 2.22% 2.47%
Spread 4.08% 4.02% 3.88% 3.85% 3.64%
Net Interest Margin 4.29% 4.26% 4.14% 4.12% 3.92%
Non-Interest Income/Avg.
Assets 2.08% 2.11% 2.16% 2.04% 2.12%
Non-Interest Expense/Avg.
Assets 4.20% 4.01% 4.03% 4.15% 3.94%
Quarterly Net
Charge-offs/Avg. Loans 0.06% 0.04% 0.22% 0.03% 0.03%
Weighted avg. shares
Outstanding
Basic 2,100 2,098 2,096 2,107 2,118
Diluted 2,118 2,116 2,117 2,125 2,128

AVERAGE BALANCE SHEET DATA

Total Assets $759,908 $761,312 $784,058 $790,499 $780,054
Earning assets $692,527 $698,268 $724,678 $733,368 $720,998
Loans $600,554 $599,115 $608,769 $615,616 $606,951
Interest-bearing deposits $511,521 $512,049 $534,850 $538,403 $532,033
Total deposits $576,502 $576,534 $600,339 $604,681 $596,291
Total stockholders'
equity $ 74,416 $ 73,977 $ 72,723 $ 72,568 $ 71,689

(1) Eliminates the effect of goodwill and the core deposit intangible
assets and the related amortization expense on a tax effected basis.
The amount was calculated using the following information.

Average Stockholders'
Equity $ 74,416 $ 73,922 $ 72,723 $ 72,568 $ 71,689
Less average goodwill and
other intangible assets,
net of related income
taxes 3,705 3,687 3,694 3,703 3,708
Average Tangible Equity $ 70,711 $ 70,235 $ 69,029 $ 68,865 $ 67,981
======== ======== ======== ======== ========

Net Income 1,700 1,733 $ 1,983 $ 1,733 $ 1,656
Plus Amortization of core
Deposit intangibles, net
of related income taxes 5 7 7 7 7
-------- -------- -------- -------- --------
Net Income, as adjusted $ 1,705 $ 1,740 $ 1,990 $ 1,740 $ 1,663
======== ======== ======== ======== ========

TECHE HOLDING COMPANY
(Dollars in thousands, except per share data)
Franklin, LA
Statements of Income
(UNAUDITED)

FISCAL YEAR TO DATE (SIX MONTHS) ENDED
----------------------------------------------
Mar. 2010 Mar. 2009 $Change %Change
---------- ---------- ---------- ----------
Interest Income $ 20,875 $ 22,227 $ (1,352) -6.1%
Interest Expense 6,007 8,329 (2,322) -27.9%
---------- ---------- ---------- ----------
Net Interest Income 14,868 13,898 970 7.0%
Provision for Loan Losses 2,096 1,190 906 76.1%
---------- ---------- ---------- ----------
Net Interest Income after
Provision for Loan Losses 12,772 12,708 64 0.5%
Non Interest Income 7,970 8,068 (98) -1.2%
Non Interest Expense 15,621 15,273 348 2.3%
---------- ---------- ---------- ----------
Income Before Gain on
Securities and Sale of
Loans 5,121 5,503 (382) -6.9%
Gain (Loss) on Securities (45) (419) 374 -89.3%
Gain (Loss) on Sale of Loans - - - 0.0%
Income Taxes 1,643 1,664 (21) -1.3%
---------- ---------- ---------- ----------
Net Income (loss) $ 3,433 $ 3,420 $ 13 0.4%
========== ========== ========== ==========
Selected Financial Data

Dividends Declared Per
Share $ 0.71 $ 0.70 $ 0.01 1.4%
Basic Earnings Per Common
Share 1.64 1.61 0.03 1.9%
Diluted Earnings Per Common
Share 1.62 1.61 0.01 0.6%
Annualized Return on Avg.
Assets 0.90% 0.88% 0.02% 2.7%
Annualized Return on Avg.
Equity 9.25% 9.68% -0.43% -4.4%
Annualized Return on Avg.
Tangible Equity (1) 9.77% 10.26% -0.49% -4.8%
Yield on Interest Earning
Assets 6.00% 6.21% -0.21% -3.4%
Cost of Interest Bearing
Liabilities 1.95% 2.62% -0.67% -25.6%
Spread 4.05% 3.59% 0.46% 12.8%
Net Interest Margin 4.28% 3.88% 0.40% 10.3%
Non-Interest Income/Avg.
Assets 2.08% 2.08% 0.00% 0.0%
Non-Interest Expense/Avg.
Assets 4.11% 3.94% 0.17% 4.3%
Quarterly Net
Charge-offs/Avg. Loans 0.11% 0.04% 0.07% 175.0%
Weighted avg. shares
Outstanding
Basic 2,117 2,118 (1) 0.0%
Diluted 2,099 2,128 (29) -1.4%

AVERAGE BALANCE SHEET DATA

Total Assets $ 759,908 $ 775,087 $ (15,179) -2.0%
Earning assets $ 692,527 $ 715,784 $ (23,257) -3.2%
Loans $ 600,554 $ 601,299 $ (745) -0.1%
Interest-bearing deposits $ 511,789 $ 529,407 $ (17,618) -3.3%
Total deposits $ 576,502 $ 593,382 $ (16,880) -2.8%
Total stockholders' equity $ 74,194 $ 70,648 $ 3,546 5.0%

(1) Eliminates the effect of goodwill and the core deposit intangible
assets and the related amortization expense on a tax effected basis.
The amount was calculated using the following information.

Average Stockholders'
Equity $ 74,194 $ 70,648 $ 3,546 5.0%
Less average goodwill and
other intangible assets,
net of related income taxes 3,711 3,712 (1) 0.0%
Average Tangible Equity 70,483 66,936 3,547 5.3%
========== ========== ========== ==========

Net Income 3,433 3,420 13 0.4%
Plus Amortization of core
deposit intangibles, net
of related income taxes 10 14 (4) -28.6%
---------- ---------- ---------- ----------
Net Income, as adjusted $ 3,443 $ 3,434 $ 9 0.3%
========== ========== ========== ==========

TECHE HOLDING COMPANY
(Dollars in thousands, except per share data)
Franklin, LA
Balance Sheet
(UNAUDITED)

Mar. Dec. Sep. Jun. Mar.
2010 2009 2009 2009 2009
-------- -------- -------- -------- ---------
SmartGrowth Loans
Consumer $110,438 $109,899 $108,013 $106,563 $ 104,524
Commercial 212,485 213,505 210,201 209,091 204,973
Home Equity 57,443 57,373 58,348 58,216 57,852
SmartMortgage Loans 86,677 86,462 83,775 88,200 88,305
-------- -------- -------- -------- ---------
Total SmartGrowth Loans 467,043 467,239 460,337 462,070 455,654
Mortgage Loans (owner
occupied conforming) 133,478 135,048 134,996 156,759 157,954
-------- -------- -------- -------- ---------
600,521 602,287 595,333 618,829 613,608
Allowance for Loan
Losses -8,253 -7,744 -6,806 -6,836 -6,478
-------- -------- -------- -------- ---------
Loans Receivable, Net 592,268 594,543 588,527 611,993 607,130

Cash and Securities 116,367 108,282 125,058 127,441 139,149
Goodwill and Other
Intangibles 3,700 3,707 3,715 3,723 3,734
Foreclosed Real Estate 1,426 1,128 1,953 604 672
Other 49,874 49,604 45,818 45,752 44,811
-------- -------- -------- -------- ---------
TOTAL ASSETS $763,635 $757,264 $765,071 $789,513 $ 795,496
======== ======== ======== ======== =========

SmartGrowth Deposits
Checking $177,174 $170,552 $165,796 $168,733 $ 175,477
Money Market 68,763 80,034 95,461 108,668 120,865
Savings 149,233 128,254 106,479 93,485 78,944
-------- -------- -------- -------- ---------
Total Smart Growth
Deposits 395,170 378,840 367,736 370,886 375,286
Time Deposits 191,573 196,651 217,733 234,556 236,403
-------- -------- -------- -------- ---------
Total Deposits 586,743 575,491 585,469 605,442 611,689

FHLB Advances 97,857 103,451 100,628 106,890 107,089
Other Liabilities 5,484 6,000 7,490 7,129 6,656
Stockholders' Equity 73,551 72,322 71,484 70,052 70,062
-------- -------- -------- -------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $763,635 $757,264 $765,071 $789,513 $ 795,496
======== ======== ======== ======== =========

Ratio of Equity to Assets 9.63% 9.55% 9.34% 8.87% 8.81%
Tangible Equity Ratio (2) 9.20% 9.07% 8.90% 8.44% 8.38%
Risk-Based Capital Ratio 12.91% 12.70% 12.72% 12.15% 11.98%
Book Value per Common
Share $ 35.02 $ 34.49 $ 34.09 $ 33.43 $ 33.08
Tangible Book Value Per
Common Share (2) $ 33.27 $ 32.74 $ 32.33 $ 31.67 $ 31.33
Non-performing
Assets/Total Assets 2.27% 1.58% 1.19% 1.27% 1.05%
Shares Outstanding (in
thousands) 2,100 2,097 2,097 2,095 2,118

The amount was
calculated using the
following information:

Stockholders' Equity $ 73,551 $ 72,322 $ 71,484 $ 70,052 $ 70,062
Less goodwill and other
Intangible assets, net
of related income taxes -3,683 -3,687 -3,692 -3,697 -3,704
-------- -------- -------- -------- ---------
Tangible Stockholders'
Equity $ 69,868 $ 68,365 $ 67,792 $ 66,355 $ 66,358
======== ======== ======== ======== =========

Total Assets $763,635 $757,264 $765,071 $789,513 $ 795,496
Less goodwill and other
Intangible assets, net
of related income taxes -3,683 -3,687 -3,692 -3,697 -3,704
-------- -------- -------- -------- ---------
Total Tangible Assets $759,952 $753,577 $761,379 $785,816 $ 791,792
======== ======== ======== ======== =========

Quarter-End Loan Data 90 Days + 90 Days +
March 31, 2010 Total Charge- Charge- Non Non
Loans Offs Offs Accrual Accrual
Dollars Dollars Percentage Dollars Percentage
--------- --------- -------- ---------- ---------
Real Estate Loans
Construction $ 22,512 $ - 0.00% $ 1,568 6.97%
Permanent, Secured
by:
1-4 Dwelling Units:
Revolving, Open-End
Loans (HELOC) 18,748 13 0.07% 94 0.50%
All Other
Secured by First
Liens 304,778 60 0.02% 4,852 1.59%
Secured by Junior
Liens 12,535 - 0.00% 148 1.18%
Multifamily (5+
Dwelling Units) 24,821 - 0.00% - 0.00%
Nonresidential
Property (Except
Land) 87,283 256 0.29% 1,113 1.28%
Land 39,353 2 0.01% 5,585 14.19%
--------- --------- -------- ---------- ---------
Subtotal - Real
Estate Loans $ 510,030 $ 331 0.06% $ 13,360 2.62%
--------- --------- -------- ---------- ---------

Non-Real Estate
Loans:
Commercial Loans 29,251 - 0.00% 7 0.02%
Consumer Loans:
Loans on Deposits 7,450 51 0.68% 23 0.31%
Auto Loans 2,964 - 0.00% 12 0.40%
Mobile Home Loans 40,265 (2) (0.00)% 321 0.80%
Other 10,561 11 0.10% 27 0.26%
--------- --------- ----------
Subtotal - Non Real
Estate Loans $ 90,491 $ 0 0.07% $ 390 0.43%
--------- --------- -------- ---------- ---------

Gross Loans $ 600,521 $ 391 0.07% $ 13,750 2.29%
========= ========= ==========

Non-accruals $ 12,295
90 + Days Past Due 1,455
OREO & Foreclosed 1,464
---------
Nonperforming
Assets $ 15,214
=========

NPAs/Assets 2.00%
NPAs/(Loans + OREO) 2.53%
LLR/Loans 1.37%
Net Charge-offs/Loans 0.07%

Quarter-End Loan Data 90 Days + 90 Days +
December 31, 2009 Total Charge- Charge- Non Non
Loans Offs Offs Accrual Accrual
Dollars Dollars Percentage Dollars Percentage
--------- --------- --------- ---------- ---------
Real Estate Loans
Construction $ 15,716 $ 3 0.02% $ 54 0.34%
Permanent, Secured
by:
1-4 Dwelling Units:
Revolving, Open-End
Loans (HELOC) 18,120 31 0.17% 119 0.66%
All Other
Secured by First
Liens 305,083 7 0.00% 5,626 1.84%
Secured by Junior
Liens 13,237 38 0.29% 135 1.02%
Multifamily (5+
Dwelling Units) 26,337 (1) 0.00% 1,707 6.48%
Nonresidential
Property (Except
Land) 91,947 0 0.00% 1,565 1.70%
Land 40,712 0 0.00% 965 2.37%
--------- --------- --------- ---------- ---------
Subtotal - Real
Estate Loans $ 511,152 $ 78 0.02% $ 10,171 1.99%
--------- --------- --------- ---------- ---------

Non-Real Estate
Loans:
Commercial Loans 29,984 82 0.27% 7 0.02%
Consumer Loans:
Loans on Deposits 7,558 6 0.08% 149 1.97%
Auto Loans 3,123 5 0.16% 30 0.96%
Mobile Home Loans 40,862 85 0.21% 357 0.87%
Other 9,608 2 0.01% 24 0.25%
--------- --------- --------- ----------
Subtotal - Non Real
Estate Loans $ 91,135 $ 180 0.20% $ 567 0.62%
--------- --------- --------- ---------- ---------

Gross Loans $ 602,287 $ 258 0.04% $ 10,738 1.78%
========= ========= ========= ========== =========

Non-accruals $ 9,589
90 + Days Past Due 1,148
OREO & Foreclosed 1,208
---------
Nonperforming
Assets $ 11,945
=========

NPAs/Assets 1.58%
NPAs/(Loans + OREO) 1.98%
LLR/Loans 1.29%
Net Charge-offs/Loans 0.04%

Quarter-End Loan Data 90 Days + 90 Days +
September 30, 2009 Total Charge- Charge- Non Non
Loans Offs Offs Accrual Accrual
Dollars Dollars Percentage Dollars Percentage
--------- --------- -------- ---------- ---------
Real Estate Loans
Construction $ 21,707 $ 0 0.0% $ 1,066 4.91%
Permanent, Secured
by:
1-4 Dwelling Units:
Revolving, Open-End
Loans (HELOC) 17,529 0 0.0% 50 0.29%
All Other
Secured by First
Liens 302,072 4 0.0% 4,408 1.46%
Secured by Junior
Liens 13,882 5 0.04% 88 0.63%
Multifamily (5+
Dwelling Units) 23,921 1,139 4.76% 324 1.35%
Nonresidential
Property (Except
Land) 91,428 63 0.07% 371 0.41%
Land 34,644 0 0.0% 388 1.12%
--------- --------- -------- ---------- ---------
Subtotal - Real
Estate Loans $ 505,183 $ 1,211 0.24% $ 6,695 1.33%
--------- --------- -------- ---------- ---------

Non-Real Estate
Loans:
Commercial Loans 30,395 96 0.32% 98 0.32%
Consumer Loans:
Loans on Deposits 7,779 1 0.01% 50 0.64%
Auto Loans 3,044 (5) (0.16)% 19 0.62%
Mobile Home Loans 40,327 6 0.01% 266 0.66%
Other 8,605 7 0.08% 2 0.02%
--------- --------- -------- ---------- ---------
Subtotal - Non Real
Estate Loans $ 90,150 $ 105 0.12% $ 435 0.48%
--------- --------- -------- ---------- ---------

Gross Loans $ 595,333 $ 1,316 0.22% $ 7,130 1.20%
========= ========= ======== ========== =========

Non-accruals $ 6,048
90 + Days Past Due 1,082
OREO & Foreclosed 1,962
---------
Nonperforming
Assets $ 9,092
=========

NPAs/Assets 1.19%
NPAs/(Loans + OREO) 1.52%
LLR/Loans 1.14%
Net Charge-offs/Loans 0.22%

Average Loan Balances & 03/31/ 03/31/ 12/31/ 12/31/
Yields 2010 2010 2009 2009 Change Change
Balance Yield Balance Yield Balance Yield
-------- ----- -------- ----- -------- -----
Real Estate Loans
1-4 Family $350,776 6.05% $349,819 6.04% $ 957 0.01%
Commercial 139,929 5.69% 139,403 6.01% 526 -0.32%
-------- -------- --------
490,705 5.95% 489,222 6.03% 1,483 -0.08%

Non-Real Estate Loans
Commercial 29,291 6.44% 29,587 6.49% (296) -0.05%
Consumer 80,558 9.11% 80,306 9.32% 252 -0.21%
-------- -------- --------
109,849 8.40% 109,893 8.56% (44) -0.16%

Total All Loans $600,554 6.40% $599,115 6.50% $ 1,439 -0.10%
======== ======== ========

Average Loan Balances & 03/31/ 03/31/ 03/31/ 03/31/
Yields 2010 2010 2009 2009 Change Change
Balance Yield Balance Yield Balance Yield
-------- ----- -------- ----- -------- -----

Real Estate Loans
1-4 Family $350,776 6.05% $374,209 6.26% $(23,433) -0.21%
Commercial 139,929 5.69% 127,326 6.15% 12,603 -0.46%
-------- -------- --------
490,705 5.95% 501,535 6.23% (10,830) -0.28%

Non-Real Estate Loans
Commercial 29,291 6.44% 28,849 6.37% (442) 0.07%
Consumer 80,558 9.11% 76,567 9.17% 3,991 -0.06%
-------- -------- --------
109,849 8.40% 105,416 8.40% 4,433 0.00%

Total All Loans $600,554 6.40% $606,951 6.61% $ (6,397) -0.21%
======== ======== ========

Interest-bearing Liabilities: Linked Quarter Comparison

03/31/ 12/31/
03/31/ 2010 12/31/ 2009 Change %
Average balances 2010 Avg. 2009 Avg. Change Avg. Balance
$Balance Yield $Balance Yield $Balance Yield Change
-------- ----- --------- ----- -------- ----- -------
NOW Accounts $105,087 0.45% $ 102,103 0.47% $ 2,984 -0.02% 2.9%
Non-interest
bearing
Deposits 64,981 0.00% 64,526 0.00% 455 0.00% 0.7%
-------- ----- --------- ----- -------- ----- -------
Checking Total 170,068 0.28% 166,629 0.29% 3,439 -0.01% 2.1%

Savings
Accounts 137,921 1.01% 118,486 0.98% 19,435 0.03% 16.4%
Money Market
Accounts 73,672 0.39% 86,776 0.40% (13,104) -0.01% -15.1%
-------- ----- --------- ----- -------- ----- -------

Total Smart
Growth
Deposits 381,661 0.56% 371,891 0.53% 9,770 0.03% 2.6%

Time Deposits 194,841 2.64% 204,684 2.80% (9,843) -0.16% -4.8%

Total Deposits 576,502 1.26% 576,575 1.34% (73) -0.08% 0.0%

FHLB Advances 103,257 4.34% 103,400 4.40% (143) -0.06% -0.1%
--------

Total
Interest-bearing
liabilities $614,778 1.91% $ 615,449 1.99% $ (671) -0.08% -0.1%
======== ========= ========

Non-interest
bearing
Deposits $ 64,981 0.00% $ 64,526 0.00% $ 455 0.00% 0.7%

Interest-bearing Liabilities: Prior Year Comparison

03/31/ 03/31/
03/31/ 2010 03/31/ 2009 Change %
Average balances 2010 Avg. 2009 Avg. Change Avg. Balance
$Balance Yield $Balance Yield $Balance Yield Change
-------- ----- --------- ----- -------- ----- -------
NOW Accounts $105,087 0.45% $ 102,831 0.60% $ 2,256 -0.15% 2.2%
Non-interest
bearing
Deposits 64,981 0.00% 64,437 0.00% 544 0.00% 0.8%
-------- ----- --------- ----- -------- ----- -------
Checking Total 170,068 0.28% 167,268 0.37% 2,800 -0.09% 1.7%

Savings
Accounts 137,921 1.01% 65,605 0.90% 72,316 0.11% 110.2%
Money Market
Accounts 73,672 0.39% 120,379 1.46% (46,707) -1.07% -38.8%
-------- ----- --------- ----- -------- ----- -------

Total Smart
Growth
Deposits 381,681 0.56% 353,252 0.84% 28,429 -0.28% 8.0%

Time Deposits 194,841 2.64% 243,039 3.27% (48,198) -0.63% -19.8%

Total Deposits 576,502 1.26% 596,291 1.83% (19,789) -0.57% -3.3%

FHLB Advances 103,257 4.34% 106,795 4.57% (3,538) -0.23% -3.3%
--------- --------

Total
Interest-bearing
liabilities $614,778 1.91% $ 638,649 2.47% $(23,871) -0.56% -3.7%
======== ========= ========

Non-interest
bearing
Deposits $ 64,981 0.00% $ 64,437 0.00% $ 544 0.00% 0.8%

Contact:
Patrick Little
President & CEO

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