1124676--3/31/2009--FIRST_CENTURY

related topics

{condition, economic, financial}

{acquisition, growth, future}

{loan, real, estate}

{loss, insurance, financial}

{control, financial, internal}

{regulation, change, law}

{competitive, industry, competition}

{personnel, key, retain}

{investment, property, distribution}

{capital, credit, financial}

{stock, price, operating}

{system, service, information}

{stock, price, share}

We have experienced significant losses since our inception and have a significant accumulated deficit. We have only recently adopted our new business plan and may not be able to implement it effectively. We may need to raise additional capital, which may not be available or may only be available on unfavorable terms Our ability to estimate our loan loss reserves accurately may have an adverse effect on our financial performance. We will face risks with respect to future expansion and acquisitions or mergers. Our success depends on our ability to identify and retain individuals with experience and relationships in the markets in which we compete. We have previously identified weaknesses in our overall credit risk management process. We are subject to extensive regulation that could limit or restrict our activities. There can be no assurance that recently enacted legislation will help stabilize the U.S. financial system. If we participate in the Capital Purchase Program our shareholders ownership interests and voting powers will be diluted and other rights of shareholders could be adversely affected. Our regulatory capital ratios meet the guidelines established by our regulators for adequately capitalized financial institutions but do not meet the guidelines established by our regulators for well-capitalized institutions. Current adverse market conditions have resulted in a lack of liquidity and reduced business activity. Recent negative developments in the financial industry and the domestic and international credit markets may result in more legislation and regulatory oversight. The economic downturn, especially in Northern Georgia, has had an adverse effect on the quality of our loan portfolio and our financial performance. The FDIC Deposit Insurance assessments that we are required to pay may materially increase in the future, which would have an adverse effect on our earnings and our ability to pay our liabilities as they come due. Weakness in the real estate market, including the secondary residential mortgage loan markets, has adversely affected us and may continue to do so. Changes in interest rates and our ability to successfully manage interest rate fluctuations may reduce our profitability. Industry competition may have an adverse effect on our profitability Efforts to comply with Sarbanes-Oxley Act involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us. Our directors and executive officers own a significant portion of our common stock and can influence shareholder decisions and may vote to take actions adverse to our interests. One of our directors and major shareholders, William R. Blanton, holds an executive position, serves on the board of directors of two other banks and holds significant shares of banks within our target market and could vote to take actions adverse to our interests. We are exposed to the possibility of technology failure.

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1124676--3/31/2009--FIRST_CENTURY_BANCORP.