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Delaware		36-3145350
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Theodore L. Eissfeldt, Esq. Joseph B. Hemker, Esq. Timothy E. Kraepel, Esq. Howard & Howard Attorneys PC One Technology Plaza, Suite 600 211 Fulton Street Peoria, Illinois 61602-1350 Phone: (309) 672-1483 Fax: (309) 672-1568		John E. Freechack, Esq. Karyn L. Doerfler, Esq. Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP 333 West Wacker Drive, Suite 2700 Chicago, Illinois 60606 Phone: (312) 984-3100 Fax: (312) 984-3150

Proposed Maximum

Proposed Maximum

Amount of

Title of Each Class of

Amount to be

Offering Price

Aggregate

Registration

Securities to be Registered

Registered(1)

Per Share(2)

Offering Price(2)

Fee

Common stock, $1.00 par value

2,698,655 shares

$23.60

$53,073,544

$5,679

(1)	Represents the estimated maximum number of shares to be issued pursuant to the agreement and plan of merger dated as of June 30, 2006, between UnionBancorp, Inc., a Delaware corporation, and Centrue Financial Corporation, a Delaware corporation.
(2)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) of Regulation C under the Securities Act of 1933, as amended.

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Proxy Statement for the Special		Proxy Statement for the Special
Meeting of Stockholders of		Meeting of Stockholders of Centrue
UnionBancorp, Inc.		Financial Corporation

For UnionBancorp stockholders:		For Centrue Financial stockholders:
[          ]		[          ]
[          ]		[          ]
[          ]		[          ]
[          ] [  ], 2006,		[          ] [  ], 2006, [  :  .m.], local time
[  :  .m.], local time

Scott A Yeoman		Thomas A. Daiber
President and Chief Executive Officer		President and Chief Executive Officer
UnionBancorp, Inc.		Centrue Financial Corporation

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	1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger dated as of June 30, 2006, between UnionBancorp, Inc., a Delaware corporation, and Centrue Financial Corporation, a Delaware corporation, and approve the transactions it contemplates, including the merger of Centrue Financial with UnionBancorp and the adoption of an amended and restated certificate of incorporation attached as Exhibit A to the merger agreement.
	2. To transact such other business as may properly be brought before the special meeting, or any adjournments or postponements of the special meeting.
	The close of business on [                    ], 2006, has been fixed as the record date for determining those stockholders entitled to vote at the special meeting and any adjournments or postponements of the special meeting. Accordingly, only stockholders of record on that date are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.

	By Order of the Board of Directors,
	Scott A. Yeoman
	President and Chief Executive Officer

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	1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger dated as of June 30, 2006, between UnionBancorp, Inc., a Delaware corporation, and Centrue Financial Corporation, a Delaware corporation, and approve the transactions it contemplates, including the merger of Centrue Financial with UnionBancorp.
	2. To transact such other business as may properly be brought before the special meeting, or any adjournments or postponements of the special meeting.

	By Order of the Board of Directors,
	Thomas A. Daiber
	President and Chief Executive Officer

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HOW TO OBTAIN ADDITIONAL INFORMATION			iii
QUESTIONS AND ANSWERS ABOUT THE MERGER			iv
SUMMARY			1
	General		1
	The Companies		1
	Special Meetings		1
	Record Date; Vote Required		2
	Authority to Adjourn Special Meeting to Solicit Additional Proxies		2
	Appraisal Rights		2
	Recommendation to Stockholders		2
	Share Ownership of Directors		3
	The Merger		3
	What You Will Receive in the Merger		3
	Exchange of Stock Certificates		4
	Ownership After the Merger		4
	Effective Time of the Merger		4
	Federal Income Tax Consequences		5
	Reasons for the Merger		5
	Opinion of Financial Advisors		5
	Conditions to Completion of the Merger		5
	Termination and Termination Fees		6
	Waiver and Amendment		6
	Regulatory Approvals		6
	Management and Operations After the Merger		7
	Interests of Certain Persons in the Merger		7
	Accounting Treatment		7
	Expenses		7
	Material Differences in the Rights of Stockholders		7
	Comparative Market Prices of Common Stock		8
	Comparative Per Share Data		8
	Market Price Information		9
	Historical Market Prices and Dividend Information		10
	Unaudited Pro Forma Financial Data		11
	UNIONBANCORP SELECTED HISTORICAL FINANCIAL DATA		19
	CENTRUE FINANCIAL SELECTED HISTORICAL FINANCIAL DATA		20
RISK FACTORS			21
A WARNING ABOUT FORWARD-LOOKING STATEMENTS			22
INTRODUCTION			23
UNIONBANCORP SPECIAL MEETING			24
	Date, Place, Time and Purpose		24
	Record Date, Voting Rights, Required Vote and Revocability of Proxies		24
	Solicitation of Proxies		25
	Authority to Adjourn Special Meeting to Solicit Additional Proxies		25
	Appraisal Rights		25
	Recommendation of UnionBancorp’s Board		25
CENTRUE FINANCIAL SPECIAL MEETING			25
	Date, Place, Time and Purpose		25
	Record Date, Voting Rights, Required Vote and Revocability of Proxies		25
	Solicitation of Proxies		26
	Authority to Adjourn Special Meeting to Solicit Additional Proxies		27
	Appraisal Rights		27
	Recommendation of Centrue Financial’s Board		27
DESCRIPTION OF TRANSACTION			27
	General		27
	Surrender of Stock Certificates		28
	Effective Time of the Merger		29
	United States Federal Income Tax Consequences of the Merger		29
	Background of the Merger		32
	UnionBancorp’s Reasons for the Merger and Board Recommendation		36
	Centrue Financial’s Reasons for the Merger and Board Recommendation		37
	Fairness Opinion of UnionBancorp’s Financial Advisor		39
	Fairness Opinion of Centrue Financial’s Financial Advisor		48
	Conduct of Business Pending the Merger and Certain Covenants		57
	Conditions to Completion of the Merger		58
	Termination and Termination Fees		60
	Waiver and Amendment		62
	Regulatory Approvals		62

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	Management and Operations After the Merger		62
	Interests of Certain Persons in the Merger		64
	Accounting Treatment		68
	Expenses		68
	Resales of UnionBancorp Common Stock		68
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS			69
	General		69
	Anti-Takeover Provisions Generally		69
	Authorized Capital Stock		70
	Voting Rights		70
	Classification of Board of Directors		71
	Size of the Board of Directors; Vacancies; Removal		72
	Stockholder Nominations and Proposals		72
	Special Meetings of Stockholders		73
	Action by Written Consent		73
	Dividends		74
	Evaluation of Proposals		74
	Special Voting Requirements; Business Combinations		74
	Amendment of Governing Documents		75
	Limitations on Director Liability		76
	Indemnification		76
	Dissenters’ Rights		77
	Rights Plan		77
	Summary of Amendments to UnionBancorp’s Certificate of Incorporation		79
BUSINESS OF UNIONBANCORP			80
	General		80
	Properties		80
	Management’s Discussion and Analysis		81
	Legal Proceedings		115
	Changes in and Disagreements with Accountants		115
	Quantitative and Qualitative Disclosures about Market Risk		115
	Security Ownership of Certain Beneficial Owners and Management		116
	Executive Compensation		118
	Transactions with Management		120
BUSINESS OF CENTRUE FINANCIAL			120
	General		120
	Properties		122
	Management’s Discussion and Analysis		123
	Legal Proceedings		153
	Changes in and Disagreements with Accountants		153
	Quantitative and Qualitative Disclosures about Market Risk		153
	Security Ownership of Certain Beneficial Owners and Management		155
	Executive Compensation		158
	401(k) Savings Plan		160
	Stock Incentive Plans		160
	Employment Agreements		161
	Director Compensation		163
	Transactions with Management		163
OTHER MATTERS			163
STOCKHOLDER PROPOSALS			164
EXPERTS			164
CERTAIN OPINIONS			164
WHERE YOU CAN FIND MORE INFORMATION			164
UNIONBANCORP, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1
CENTRUE FINANCIAL CORPORATION AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-46
Appendix A — Agreement and Plan of Merger
Appendix B — Fairness Opinion of Sandler O’Neill & Partners, L.P.
Appendix C — Fairness Opinion of Keefe Bruyette & Woods, Inc.
Opinion of Howard & Howard Attorneys, P.C.
Opinion of Crowe Chizek & Company LLC
Consent of Crowe Chizek & Company LLC
Consent of McGladrey & Pullen, LLP
Form of Proxy to be Delivered to the Stockholders of UnionBancorp, Inc.
Form of Proxy to be Delivered to the Stockholders of Centrue Financial Corporation
Consent of Person Named to be Future Director of UnionBancorp, Inc.
Consent of Person Named to be Future Director of UnionBancorp, Inc.
Consent of Person Named to be Future Director of UnionBancorp, Inc.
Consent of Person Named to be Future Director of UnionBancorp, Inc.
Consent of Person Named to be Future Director of UnionBancorp, Inc.

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UnionBancorp, Inc.		Centrue Financial Corporation
122 West Madison Street		303 Fountains Parkway
Ottawa, Illinois 61350		Fairview Heights, Illinois 60208
Attention: Suzanne Fechter, Secretary		Attention: Thomas A. Daiber, Acting Secretary
Telephone: (815) 431-2815		Telephone: (618) 624-1323

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Q:		What am I being asked to vote on?
A:		UnionBancorp stockholders and Centrue Financial stockholders are being asked to adopt a merger agreement that will result in the merger of Centrue Financial with and into UnionBancorp and to approve that merger. By approving the merger, UnionBancorp stockholders will also be approving the adoption of an amended and restated certificate of incorporation attached as Exhibit A to the merger agreement.
Q:		Why do UnionBancorp and Centrue Financial want to merge?
A:		UnionBancorp and Centrue Financial believe that the proposed merger will provide each of its stockholders with substantial benefits and will further each of the companies’ strategic growth plans. As a larger company, the combined entity can provide the capital and resources that the company’s combined subsidiary bank needs to compete effectively and to offer a broader array of products and services to better serve its banking customers
Q:		What will happen to Centrue Financial and UnionBancorp as a result of the Merger?
A.		If the merger is completed, Centrue Financial will merge with and into UnionBancorp with UnionBancorp being the surviving entity in the merger. The combined entity will operate under the name “Centrue Financial Corporation” and its shares will be traded on the NASDAQ Global Market under the symbol “TRUE.”
Q:		What will I receive for my shares of Centrue?
A:		Stockholders of Centrue Financial will be entitled to receive 1.2 shares of UnionBancorp common stock for each share of Centrue Financial common stock that you own at the effective time of the merger. Fractional shares will not be issued in the merger. Instead of fractional shares, Centrue Financial stockholders will receive cash in an amount determined as described in this joint proxy statement-prospectus.
Q:		What will happen to my shares of UnionBancorp?
A:		All shares of UnionBancorp will remain outstanding.
Q:		Will the value of the merger consideration fluctuate?
A:		Yes. Because the exchange ratio of 1.2 shares of UnionBancorp common stock per share of Centrue Financial common stock is fixed, the value of the stock consideration will fluctuate as the price of UnionBancorp common stock changes. You should obtain current market price quotations for UnionBancorp common stock to determine the current value of the stock consideration.
Q:		How do I exchange my Centrue Financial stock certificates?
A:		If the merger is approved and consummated, after the merger is effective, the exchange agent,                    , will send to you a letter of transmittal, which will include instructions on where to surrender your stock certificates for exchange.
Q:		What do the UnionBancorp board of directors and the Centrue Financial board of directors recommend?
A:		Each of the boards of directors of UnionBancorp and Centrue Financial recommend and encourage their respective stockholders to vote “FOR” approval of the merger agreement and the transactions it contemplates.
Q:		Who must approve the proposals at the special meeting?
A:		Holders of a majority of the outstanding voting shares of each of Centrue Financial and UnionBancorp as of their respective record dates must adopt the merger agreement and approve the transactions it contemplates.
Q:		When and where will the special meetings take place?

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A:		The UnionBancorp special meeting will be held on [                    ], 2006, at [     ]:00 [     ].m., local time, at [                    ].
		The Centrue Financial special meeting will be held on [                    ], 2006, at [     ]:00 [     ].m., local time, at [                    ].
Q.		Who can vote at the special meetings?
A.		You can vote at the UnionBancorp special meeting if you owned shares of UnionBancorp common stock at the close of business on [                    ] [     ], 2006, the record date for the UnionBancorp special meeting.
		You can vote at the Centrue Financial special meeting if you owned shares of Centrue Financial common stock at the close of business on [                    ] [     ], 2006, the record date for the Centrue Financial special meeting.
Q:		What do I need to do now?
A:		After reviewing this document, submit your proxy by sending a completed proxy card. By submitting your proxy, you authorize the individuals named in it to represent you and vote your shares at the special meeting in accordance with your instructions.
		Your proxy vote is important. Whether or not you plan to attend the special meeting, please submit your proxy promptly in the enclosed envelope.
Q:		If my shares are held in “street name” by my broker, will my broker vote my shares for me?
A:		Your broker will vote your shares only if you instruct your broker on how to vote. Your broker will send you directions on how to do this.
Q:		How will my shares be voted if I return a blank proxy card?
A:		If you sign and date your proxy card but do not indicate how you want to vote, your proxies will be counted as a vote “FOR” the proposals identified in this document and in the discretion of the persons named as proxies in any other matters properly presented at the special meeting.
Q:		What will be the effect if I do not vote?
A:		Your failure to vote will have the same effect as if you voted against approval of the merger agreement and the transactions it contemplates.
Q:		Can I vote my shares in person?
A:		Yes, if your shares are registered in your own name, you may attend the special meeting and vote your shares in person. However, we recommend that you sign, date and promptly mail the enclosed proxy card.
Q:		Can I change my mind and revoke my proxy?
A:		Yes, you may revoke your proxy and change your vote at any time before the polls close at the special meeting by following the instructions in this document.
Q:		What if I oppose the merger? Do I have appraisal rights?
A:		No. Appraisal rights are not available under the Delaware General Corporation Law.
Q:		Who can answer my questions?
A:		You should contact:
		UnionBancorp, Inc.

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		Centrue Financial Corporation

Q:		Is the merger expected to be taxable to me?
A:		In general, the exchange of your Centrue Financial common stock solely for UnionBancorp common stock will not cause you to recognize any taxable gain or loss for federal income tax purposes. However, you will have to recognize taxable income or gain in connection with cash received in lieu of any fractional shares of common stock of the combined company.
		Each of UnionBancorp’s and Centrue Financial’s respective obligations to complete the merger is conditioned upon receipt of an opinion about the federal income tax treatment of the merger. The opinion will not bind the Internal Revenue Service, which could take a different view. To review in greater detail the tax consequences to Centrue Financial stockholders, see “Description of Transaction — Material Federal Income Tax Consequences of the Merger,” beginning on page      . You should consult your own tax advisor for a full understanding of the tax consequences to you of the merger.
Q:		When do you expect the merger to be completed?
A:		We are working to complete the merger as quickly as possible. If approved by the UnionBancorp and Centrue Financial stockholders, we anticipate closing the merger in the fourth quarter of 2006. However, it is possible that factors outside our control could require us to complete the merger at a later time or not complete it at all.

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	The exchange ratio is fixed and will not be adjusted to reflect changes in UnionBancorp’s stock value prior to the effective time of the merger.

	The interests of certain management officials may be different from those of other stockholders.

	Difficulties in combining the operations of Centrue Financial and UnionBancorp may prevent the combined company from achieving the expected benefits from its acquisition.

	•	integrate the operations of Centrue Financial and UnionBancorp;
	•	maintain existing relationships with depositors so as to minimize withdrawals of deposits after the merger;
	•	maintain and enhance existing relationships with borrowers so as to limit unanticipated losses from loans of Centrue Financial and UnionBancorp;
	•	control the incremental non-interest expense so as to maintain overall operating efficiencies;

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	•	retain and attract qualified personnel; and
	•	compete effectively in the communities served by Centrue Financial and UnionBancorp and in nearby communities.

	Your interest will be diluted by the merger.

	Obtaining required approvals and satisfying closing conditions may delay or prevent completion of the merger.

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	•	the economic impact of past and any future terrorist threats and attacks, acts of war or threats thereof and the response of the United States to any such threats and attacks;
	•	technological changes implemented by us and by other parties, including third party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to us and our customers;
	•	the availability of capital to fund the expansion of the combined business; and
	•	other factors referenced in this joint proxy statement-prospectus or the documents incorporated by reference.

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	•	shares of UnionBancorp common stock present at the special meeting either in person or by proxy; and
	•	shares of UnionBancorp common stock for which it has received signed proxies, but with respect to which holders of shares have abstained on any matter.

	•	giving written notice of revocation to the secretary of UnionBancorp;
	•	properly submitting to UnionBancorp a duly executed proxy bearing a later date; or
	•	attending the special meeting and voting in person.

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	•	shares of Centrue Financial common stock present at the special meeting either in person or by proxy; and
	•	shares of Centrue Financial common stock for which it has received signed proxies, but with respect to which holders of shares have abstained on any matter.

	•	giving written notice of revocation to the secretary of Centrue Financial;
	•	properly submitting to Centrue Financial a duly executed proxy bearing a later date; or
	•	attending the special meeting and voting in person.

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		Value of Stock
		Consideration to be
		Received in the
Price of UnionBancorp Common Stock		Merger
$18.75		$	22.50
$19.00		$	22.80
$19.25		$	23.10
$19.50		$	23.40
$19.75		$	23.70
$20.00		$	24.00
$20.25		$	24.30
$20.50		$	24.60
$20.75		$	24.90
$21.00		$	25.20
$21.25		$	25.50

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	•	the receipt of all required regulatory approvals and the expiration of all statutory waiting periods relating to the approvals; and
	•	the satisfaction or waiver of all of the conditions to closing.

	•	stockholders who are not citizens or residents of the United States;
	•	financial institutions;
	•	tax-exempt organizations;
	•	insurance companies;

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	•	dealers in securities or currencies;
	•	traders in securities that elect to use a mark-to-market method of accounting;
	•	stockholders who acquired their shares of Centrue Financial common stock pursuant to the exercise of employee stock options or otherwise acquired shares as compensation; and
	•	stockholders who hold their shares of Centrue Financial common stock as part of a hedge, straddle or other risk reduction, constructive sale or conversion transaction.

	•	The acquisition by UnionBancorp of substantially all of the assets of Centrue Financial in exchange for shares of UnionBancorp common stock and the assumption of liabilities of UnionBancorp and of Centrue Financial pursuant to the merger will constitute a reorganization within the meaning of Section 368(a) of the Code.
	•	UnionBancorp and Centrue Financial will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code.
	•	No gain or loss will be recognized by either UnionBancorp or Centrue Financial as a result of the merger.
	•	No gain or loss will be recognized by the stockholders of Centrue Financial as a result of the exchange of Centrue Financial common stock for UnionBancorp common stock pursuant to the merger. Assuming that the UnionBancorp common stock is a capital asset in the hands of the respective Centrue Financial stockholders and has been held for more than one year, any gain or loss recognized as a result of the receipt of cash in lieu of a fractional share will be a capital gain or loss equal to the difference between the cash received and that portion of the holder’s tax basis in the Centrue Financial common stock allocable to the fractional share.
	•	The tax basis of UnionBancorp common stock to be received by the stockholders of Centrue Financial will be the same as the tax basis of the Centrue Financial common stock surrendered in exchange therefor (reduced by any amount allocable to a fractional share interest for which cash is received).
	•	The holding period of the UnionBancorp common stock to be received by stockholders of Centrue Financial will include the holding period of the Centrue Financial common stock surrendered in exchange therefore on the date of the exchange.

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	•	the description of the facts relating to the merger contained in the merger agreement and this joint proxy statement-prospectus;
	•	the factual representations and warranties contained in the merger agreement and this joint proxy statement-prospectus and related documents and agreements; and
	•	factual matters addressed by representations made by executive officers of UnionBancorp and Centrue Financial, as further described in the tax opinion.

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	•	the fact that the exchange ratio represented an at-market transaction based on the ratio of the market price of Centrue Financial common stock to the market price of UnionBancorp common stock, which the UnionBancorp board believed presented a unique and attractive opportunity, and that the exchange ratio would be fixed thereby reducing the risk that the transaction would become dilutive to UnionBancorp’s stockholders;
	•	the potential cost saving opportunities and the related potential positive impact on the combined company’s earnings, including, specifically, the elimination of UnionBancorp’s current need to upgrade its operating platform by converting to the operating platform currently in use at Centrue Financial;
	•	the opportunities for revenue enhancements through the development of more extensive product offerings, including cash management and private banking, by a combined company with significantly greater resources than either standing alone, and the ability to leverage UnionBancorp’s asset management business over a larger franchise;
	•	the opportunity to build greater brand recognition and awareness;
	•	the governance arrangements with respect to the combined company post-merger, including the fact that Mr. McDonnell would serve as Chairman of the combined company, Mr. Yeoman would serve as Chief Operating Officer, and Mr. Stevenson would serve as Chief Financial Officer, as well as, the proposed composition of the board of directors;

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	•	the belief of UnionBancorp’s senior management that the managements and employees of Centrue Financial and UnionBancorp possess complementary skills and expertise and the potential advantages of a larger institution when pursuing, or seeking to retain, production and management talent;
	•	the benefit and convenience to the combined company’s customers resulting from the greater number of retail banking outlets spread over a broader geographic area that would become available to them for the conduct of their banking business, as well as the increased penetration of the northern, central and southwestern Illinois markets;
	•	the opportunity to leverage UnionBancorp’s recent success in centralization, standardization, and consolidation of non-sales related operations across Centrue Financial’s diverse operations platforms, thereby enhancing revenue-generating activities in all branch locations;
	•	the complementary nature and similarities in the markets served by Centrue Financial and UnionBancorp;
	•	Centrue Financial’s community banking philosophy, and stated commitment to local decision-making, and involvement by its leaders in the communities that it serves;
	•	the tax-free nature of the transaction due to the all-stock consideration to be utilized in the merger;
	•	the competence, experience, and integrity of Centrue Financial’s senior officers;
	•	the growing accounting, legal and regulatory compliance costs for publicly-traded institutions and the ability to spread such costs over a significantly larger revenue base;
	•	the increasingly high costs of product development and technology and the probability that such costs are likely to continue to increase in the future;
	•	the belief that, following the merger, the combined entity will be well-positioned to continue to grow through possible future acquisitions or expansions while at the same time increasing its attractiveness as a possible merger candidate; and correspondingly, the ability to make strategic divestitures from time-to-time which should have a reduced impact on a larger-sized institution;
	•	the opinion of Sandler O’Neill that, as of June 30, 2006, the exchange ratio in the merger was fair from a financial point of view to UnionBancorp stockholders (see “— Fairness Opinion of UnionBancorp’s Financial Advisor”);
	•	the anticipated increase in the liquidity of the combined company’s stock resulting from a significantly expanded stockholder base and the potential increase in interest from institutional investors and securities analysis; and
	•	the likelihood that the merger will be approved by the appropriate regulatory authorities in a timely manner (see “— Regulatory Approvals”).

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	•	information with respect to the businesses, earnings, operations, financial condition, prospects, capital levels and asset quality of Centrue Financial and UnionBancorp, both individually and as a combined company; in particular, the Centrue Financial board focused on the strategic fit of the business lines and the operating philosophies of the two institutions;
	•	the perceived risks and uncertainties attendant to Centrue Financial’s execution of its strategic growth plans as an independent banking organization, including the need to hire and retain management personnel, including a Chief Financial Officer, in order to support and enhance future growth;
	•	the fact that the merger would combine two solid and emerging banking franchises to create a $1.3 billion bank that would have a top 50 deposit share in Illinois;
	•	the consistency of the merger with Centrue Financial’s long-term strategic vision to seek profitable future expansion in the far southern and southwestern Chicago suburbs, providing the foundation for advancement into both the Chicago metropolitan and St. Louis metropolitan areas, leading to continued growth in overall stockholder value;
	•	the complementary nature of the businesses of Centrue Financial and UnionBancorp and the anticipated improved stability of the combined company’s business and earnings in varying economic and market climates relative to Centrue Financial on a stand-alone basis;
	•	the combination of the significant management talent of both organizations, which would provide for operational synergies and efficiencies;
	•	the belief of Centrue Financial’s senior management and the Centrue Financial board that the two companies share a common vision with respect to delivering financial performance and stockholder value and that their executive officers and employees possess complementary skills and expertise;
	•	the advantages of a combination with an institution such as UnionBancorp that already has a significant market share in the northern central Illinois markets and the opportunities for increased efficiencies and significant cost savings resulting from a combination with UnionBancorp’s current organization, resulting in increased profitability of the combined entity over time, as compared to a possible combination without a similar market presence;
	•	the fact that the combined company would continue to be publicly held following the merger, providing the combined company’s stockholders with continued access to a public trading market, and that stockholders would be expected to have increased liquidity for their shares as a result of the higher market capitalization of the combined company;
	•	the fact that the market capitalization of the combined institution, as compared with Centrue Financial’s market capitalization as a stand-alone entity, was expected to provide the company with increased access to capital markets to finance the combined company’s capital requirements, and in addition would provide for enhanced market visibility;
	•	the fact that the higher market capitalization of the combined company was expected to enhance the attractiveness of the company’s stock going forward, which would make the stock more attractive as consideration to be used in future acquisition opportunities that may allow for increased stockholder value;

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	•	the current and prospective economic and competitive environments facing Centrue Financial and other financial institutions, characterized by intensifying competition from both banks and nonbank financial service organizations, and the growing costs associated with regulatory compliance in the industry;
	•	the belief that the market value of UnionBancorp’s common stock prior to the execution of the merger agreement offered favorable prospects for future appreciation as a result of the proposed merger and other strategic initiatives that would be implemented by the combined company;
	•	the belief that the merger would result in stockholders of Centrue Financial receiving stock in a high quality combined company that should benefit stockholders through enhanced operating efficiencies and better penetration of commercial and consumer banking markets in Illinois;
	•	the belief that, while no assurances could be given, the business and financial advantages contemplated in connection with the merger were likely to be achieved within a reasonable time frame, particularly in light of the fact that the organizations have transition experience due to recent successfully completed acquisitions, divestitures, charter consolidations and/or data processing conversions;
	•	the opinion of Keefe Bruyette that, as of June 30, 2006, the exchange ratio offered in the merger was fair from a financial point of view to Centrue Financial’s stockholders (see “— Fairness Opinion of Centrue Financial’s Financial Advisor”); and
	•	the likelihood that the merger will be approved by the relevant bank regulatory authorities (see “— Regulatory Approval”).

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	•	the merger agreement;
	•	certain publicly available financial statements and other historical financial information of UnionBancorp that they deemed relevant;
	•	certain publicly available financial statements and other historical financial information of Centrue Financial that they deemed relevant;
	•	earnings per share estimates for UnionBancorp for the years ending December 31, 2006 through 2009 as provided by, and reviewed with, senior management of UnionBancorp;
	•	internal financial projections for Centrue Financial for the years ending December 31, 2006 through 2008 provided by and reviewed with senior management of Centrue Financial and as reviewed with and adjusted by senior management of UnionBancorp and estimated financial projections for the year ended December 31, 2009 as discussed with senior management of UnionBancorp;
	•	the pro forma financial impact of the Merger on UnionBancorp, based on assumptions relating to transaction expenses, purchase accounting adjustments and cost savings determined by the senior management of UnionBancorp;
	•	the publicly reported historical price and trading activity for UnionBancorp’s and Centrue Financial’s common stock, including a comparison of certain financial and stock market information for UnionBancorp and Centrue Financial and similar publicly available information for certain other companies the securities of which are publicly traded;
	•	to the extent publicly available, the financial terms of certain recent merger of equals type business combinations in the commercial banking industry;
	•	the current market environment generally and the banking environment in particular; and
	•	such other information, financial studies, analyses and investigations and financial, economic and market criteria as they considered relevant.

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		UnionBancorp				Centrue Financial
Diluted Ownership(1)			58.7	%			41.3	%

(1)	Based on the estimated dilutive impact of options.

Transaction price/last 12 months earnings per share			14.4x(1	)
Transaction price/tangible book value per share			125.5	%
Transaction price/stated book value per share			201.7	%
Tangible book premium/core deposits(2)			6.2	%
Premium to market price(3)			5.3	%

(1)	Excludes $80,000 non-recurring loss.
(2)	Assumes 74.7% of Centrue Financial’s deposits are core deposits.
(3)	Based on Centrue Financial’s closing price of $22.91 as of June 29, 2006.

		Contribution Analysis				Centrue
		UnionBancorp				Financial
Assets			51.4	%			48.6	%
Net loans			48.1	%			51.9	%
Core deposits(1)			45.7	%			54.3	%
Tangible equity			68.4	%			31.6	%
Last 12 months net income(2)			52.6	%			47.4	%
Budgeted 2006 net income(3)(4)			58.6	%			41.4	%
Budgeted 2007 net income(4)			59.0	%			41.0	%
Pro forma diluted ownership(5)			58.7	%			41.3	%

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(1)	For Centrue Financial, assumes 74.7% of deposits are core deposits. For UnionBancorp assumes 61.6% of deposits are core deposits.
(2)	For Centrue Financial, last twelve months net income excludes $80,000 of non-recurring loss. For UnionBancorp, it excludes $800,000 of negative provision.
(3)	For UnionBancorp, estimated 2006 net income excludes $800,000 of negative provision.
(4)	Based upon internal financial projections produced by respective management teams of Centrue Financial and UnionBancorp.
(5)	Based upon the 1.20 exchange ratio.

		Merger of Equals Median
		(Surviving Entity —		UnionBancorp-Centrue
		Non-Surviving Entity)		Financial
Board representation		50.0%-50.0%		50.0%-50.0%
Pro forma ownership(1)		51.7%-48.3%		58.7%-41.3%
Asset contribution		54.8%-45.2%		51.4%-48.6%
Earnings contribution(2)		52.7%-47.3%		52.6%-47.4%
Market premium		22.3%		5.3%

(1)	Based upon diluted pro forma ownership for UnionBancorp/ Centrue Financial.
(2)	Based upon last twelve months net income as of 3/31/06. Relative earnings contribution projected to be 51.1%-48.9% and 51.2%-48.8% in 2006 and 2007 respectively for UnionBancorp and Centrue Financial.

Alerus Financial Corporation		ISB Financial Corporation
Baraboo Bancorporation, Incorporated		Kentucky Bancshares, Inc.
Community Bank Shares of Indiana, Inc.		Landmark Bancorp, Inc.
DCB Financial Corp		MidWestOne Financial Group, Inc.
Fentura Financial, Inc.		NB&T Financial Group, Inc.
First Banking Center, Inc.		O.A.K. Financial Corporation
First Business Financial Services, Inc.		Team Financial, Inc.
Foresight Financial Group, Inc.		Tower Financial Corporation

(1)	Midwest region defined with the following states: Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin

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		Peer Group				Centrue
		Median				Financial				UnionBancorp
Total Assets (in millions)		$	663.8			$	626.3			$	661.7
Tangible Equity/ Tangible Assets			7.62	%			4.38	%			8.85	%
Intangible Assets/ Total Equity			6.52	%			37.76	%			11.40	%
Net Loans/ Total Assets			74.42	%			68.69	%			60.32	%
Gross Loans/ Total Deposits			91.54	%			88.18	%			76.59	%
Total Borrowings/ Total Assets			11.11	%			10.61	%			9.14	%
Non-performing Assets/ Assets			0.33	%			0.70	%			0.50	%
Loan Loss Reserve/ Gross Loans			1.22	%			1.02	%			1.85	%
Net Interest Margin			3.71	%			3.34	%			3.55	%
Non-interest Income/ Average Assets			0.97	%			1.14	%			1.13	%
Fees/ Revenues			20.24	%			27.84	%			26.47	%
Non-interest Expense/ Average Assets			2.86	%			3.24	%			3.40	%
Efficiency Ratio			66.23	%			78.90	%			79.36	%
Return on Average Assets			0.99	%			0.60	%			0.73	%
Return on Average Equity			10.72	%			8.68	%			7.16	%
EPS CAGR (2001-Last Twelve Months)			10.31	%			5.43	%			2.78	%
Price/ Book Value			159.73	%			119.20	%			115.08	%
Price/ Tangible Book Value			171.36	%			191.52	%			129.89	%
Price/ Last Twelve Months’ EPS			14.43	x			13.97	%			17.03	%
Price/ Last Twelve Months’ Core EPS			14.53	x			13.69	%			18.26	%
Dividend Payout Ratio			26.98	%			0.00	%			38.14	%
Dividend Yield			1.86	%			0.00	%			2.24	%
Market Capitalization (in millions)		$	72.9			$	51.1			$	75.2

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Discount Rate		14.0x				15.0x				16.0x				17.0x				18.0x
9.0%		$	25.27			$	27.08			$	28.88			$	30.69			$	32.50
10.0			24.48				26.23				27.98				29.72				31.47
11.0			23.72				25.41				27.10				28.80				30.49
12.0			22.98				24.62				26.27				27.91				29.55
13.0			22.28				23.87				25.46				27.05				28.64
14.0			21.60				23.15				24.69				26.23				27.77
15.0			20.95				22.45				23.95				25.44				26.94

Projections Variance		14.0x				15.0x				16.0x				17.0x				18.0x
(25.0)%		$	17.18			$	18.41			$	19.64			$	20.87			$	22.09
(20.0)			18.33				19.64				20.95				22.26				23.57
(15.0)			19.47				20.87				22.26				23.65				25.04
(10.0)			20.62				22.09				23.57				25.04				26.51
(5.0)			21.77				23.32				24.87				26.43				27.98
0.0			22.91				24.55				26.18				27.82				29.46
5.0			24.06				25.78				27.49				29.21				30.93
10.0			25.20				27.00				28.80				30.60				32.40
15.0			26.35				28.23				30.11				31.99				33.88
20.0			27.49				29.46				31.42				33.38				35.35
25.0			28.64				30.68				32.73				34.78				36.82

Discount Rate		125%				150%				175%				200%
9.0%		$	18.49			$	22.18			$	25.88			$	29.58
10.0			17.91				21.49				25.07				28.65
11.0			17.35				20.82				24.29				27.76
12.0			16.81				20.17				23.54				26.90
13.0			16.30				19.56				22.81				26.07
14.0			15.80				18.96				22.12				25.28
15.0			15.33				18.39				21.46				24.52

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Discount Rate		14.0x				15.0x				16.0x				17.0x				18.0x
9.0%		$	19.80			$	21.08			$	22.36			$	23.65			$	24.93
10.0			19.20				20.44				21.69				22.93				24.17
11.0			18.63				19.83				21.03				22.24				23.44
12.0			18.08				19.24				20.41				21.57				22.74
13.0			17.55				18.68				19.81				20.94				22.07
14.0			17.04				18.13				19.23				20.32				21.42
15.0			16.55				17.61				18.67				19.73				20.80

Projections Variance		14.0x				15.0x				16.0x				17.0x				18.0x
(25.0)%		$	13.95			$	14.83			$	15.70			$	16.57			$	17.44
(20.0)			14.77				15.70				16.63				17.56				18.49
(15.0)			15.58				16.57				17.56				18.54				19.53
(10.0)			16.40				17.44				18.49				19.53				20.58
(5.0)			17.21				18.31				19.42				20.52				21.62
0.0			18.02				19.18				20.35				21.51				22.67
5.0			18.84				20.06				21.28				22.50				23.72
10.0			19.65				20.93				22.21				23.48				24.76
15.0			20.46				21.80				23.13				24.47				25.81
20.0			21.28				22.67				24.06				25.46				26.85
25.0			22.09				23.54				24.99				26.45				27.90

Discount Rate		125%				150%				175%				200%
9.0%		$	19.57			$	23.10			$	26.63			$	30.16
10.0			18.98				22.40				25.82				29.23
11.0			18.41				21.72				25.04				28.35
12.0			17.87				21.08				24.29				27.50
13.0			17.34				20.46				23.57				26.68
14.0			16.84				19.86				22.88				25.89
15.0			16.36				19.28				22.21				25.14

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		Beginning Index Value				Ending Index Value
		June 28, 2005				June 28, 2006
Centrue Financial			100.00	%			88.94	%
UnionBancorp			100.00				95.13
The Peer Group			100.00				109.21
S&P 500 Index			100.00				103.70
NASDAQ Bank Index			100.00				102.63
S&P Bank Index			100.00				103.21

		Beginning Index Value				Ending Index Value
		June 28, 2003				June 28, 2006
Centrue Financial			100.00	%			98.54	%
UnionBancorp			100.00				100.75
The Peer Group			100.00				134.58
S&P 500 Index			100.00				127.64
NASDAQ Bank Index			100.00				127.18
S&P Bank Index			100.00				127.14

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	•	a draft of the merger agreement;
	•	historical financial and other information concerning UnionBancorp, including UnionBancorp’s annual reports to stockholders and annual reports on Form 10-K for the three fiscal years ended December 31, 2005, and certain quarterly reports on Form 10-Q;

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	•	historical financial and other information concerning Centrue Financial, including annual reports to stockholders and annual reports on Form 10-K for the three fiscal years ended December 31, 2005, and certain quarterly reports on Form 10-Q;
	•	discussions with senior management of Centrue Financial and UnionBancorp with respect to their past and current business operations, regulatory matters, financial condition and future prospects;
	•	earnings per share estimates for Centrue Financial for the years ending December 31, 2006, 2007 and 2008, as prepared by management and discussed with Centrue Financial management;
	•	earnings per share estimates for UnionBancorp for the years ending December 31, 2006, 2007 and 2008, as prepared by management and discussed with UnionBancorp management;
	•	historical stock prices and trading volumes of the common stock of Centrue Financial and UnionBancorp;
	•	the pro forma financial impact of the merger on UnionBancorp and Centrue Financial, based on assumptions relating to transaction expenses, purchase accounting adjustments, cost savings and other synergies determined by the senior management of UnionBancorp and Centrue Financial;
	•	certain publicly available information of other financial institutions that Keefe Bruyette deemed comparable or otherwise relevant to its inquiry, and a comparison of Centrue Financial and UnionBancorp from a financial point of view with certain of those institutions;
	•	financial terms of certain recent business combinations in the banking industry that Keefe Bruyette deemed comparable or otherwise relevant to its inquiry; and
	•	other financial studies, analyses and investigations and such other information as Keefe Bruyette deemed appropriate to enable it to render its opinion.

	•	the merger will be completed substantially in accordance with the terms set forth in the merger agreement;

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	•	the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement are true and correct;
	•	each party to the merger agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents;
	•	all conditions to the completion of the merger will be satisfied without any waivers; and
	•	in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger, no restrictions, including any divestiture requirements or amendments or modifications, will be imposed that will have a material adverse effect on the future results of operations or financial condition of Centrue Financial, UnionBancorp or the combined entity, as the case may be, or the contemplated benefits of the merger.

Transaction Multiples Centrue Financial (Data as of 3/31/2006)
Premium/ Market price			4.8	%(1)
Price/ Last 12 months earnings per share ($1.64)			14.7	x
Price/2006 estimated earnings per share ($1.75)			13.8	x
Price/2007 estimated earnings per share ($2.10)			11.5	x
Price/ Book value per share ($19.22)			125	%
Price/ Tangible book value per share ($11.96)			201	%
Tangible premium/ Core deposits			6.6	%

(1)	Based on Centrue Financial’s stock price as of June 27, 2006.

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Princeton National Bancorp, Inc. (IL)		Community Bank Shares of IN, Inc. (IN)
First Mid-Illinois Bancshares, Inc. (IL)		MidWestOne Financial Group, Inc. (IA)
Ames National Corporation (IA)		First Business Financial Services, Inc. (WI)
Home Federal Bancorp (IN)		Foresight Financial Group, Inc. (IL)
Tri City Bankshares Corporation (WI)		Tower Financial Corporation (IN)
Monroe Bancorp (IN)		PSB Holdings, Inc. (WI)
Northern States Financial Corp. (IL)

Macatawa Bank Corporation (MI)		Oak Hill Financial, Inc. (OH)
Mercantile Bank Corporation (MI)		Exchange National Bancshares (MO)
MainSource Financial Group, Inc. (IN)		Mercantile Bancorp, Inc. (IL)
Peoples Bancorp Inc. (OH)		Baylake Corp. (WI)
Farmers Capital Bank Corporation (KY)		Horizon Bancorp (IN)
Lakeland Financial Corporation (IN)		QCR Holdings, Inc. (IL)
MBT Financial Corporation (MI)		Camco Financial Corporation (OH)
Main Street Trust, Inc. (IL)		Firstbank Corporation (MI)
Merchants and Manufacturers Bancorp (WI)		German American Bancorp, Inc (IN)
S.Y. Bancorp, Inc. (KY)		Bank of Kentucky Financial Corp. (KY)
West Bancorporation, Inc. (IA)		Princeton National Bancorp, Inc. (IL)
Enterprise Financial Services Corp (MO)

										Standalone								Pro Forma
		Centrue				Union				Peer Group				Pro Forma				Peer Group
Financial Condition Measures		Financial				Bancorp				Median				Company				Median
Assets (millions)		$	626			$	662			$	708			$	1,347			$	1,258
Loans/ Deposits			88.18	%			76.59	%			94.95	%			82.17	%			94.94	%
Tangible equity/ Tangible assets			4.38				8.85				7.30				6.46				6.68
Operating EPS CAGR ‘02 — ‘05			24.85				4.75				4.99				NA				6.69
Operating return on average assets			0.43				0.67	(1)			0.73				0.84	(2)			1.02
Operating return on average equity			6.24				6.90	(1)			8.34				9.15	(2)			11.57
Net interest margin			3.35				3.46				3.42				3.40				3.46
Efficiency ratio			81.93				74.70				67.08				73.64				62.81

Note:	Data as of the three months ended March 31, 2006. Pro forma company data as of close, December 31, 2006.

(1)	Removed negative $800,000 pre-tax loan loss provision in 2006Q1 to normalize UnionBancorp’s earnings.
(2)	Pro forma transaction as of year end 2007.

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										Standalone								Pro Forma
		Centrue				Union				Peer Group				Pro Forma				Peer Group
Capital and Asset Quality Measures		Financial				Bancorp				Median				Company				Median
Leverage ratio			7.06	%			9.18	%			8.64	%			7.90	%			8.40	%
Tier 1 capital ratio			10.44				12.20				11.02				11.11				10.48
Total capital ratio			12.72				13.50				11.96				12.36				11.74
NPAs/ Loans & OREO			1.00				0.82				0.59				0.91				0.72
Loan loss reserves/ NPAs			101.8				226.0				183.2				155.5				153.0
Loan loss reserves/ Gross loans			1.02				1.85				1.13				1.42				1.17
Net charge-offs/ Average loans			0.12				0.05				0.04				0.02				0.08
Loan loss provision/ Net charge-offs			58.59				NM				143.27				NM				101.65

Note:	Data as of the three months ended March 31, 2006. Pro forma company data as of close, December 31, 2006.

											Standalone				Pro Forma
			Centrue				Union				Peer Group				Peer Group
Market Performance Ratio			Financial				Bancorp				Median				Median
Price to:
	Last 12 months operating EPS			14.0	x			16.8	x			17.5	x			14.8	x
	2006 estimated earnings per share			13.1x(1	)			14.9x(1	)			16.2	x			14.1	x
	2007 estimated earnings per share			11.0x(1	)			13.7x(1	)			15.2	x			12.8	x
	Book value per share			119	%			116	%			156	%			163	%
	Tangible book value per share			192	%			131	%			158	%			224	%
	Core deposit premium			5.8	%			4.6	%			7.1	%			11.5	%
	Dividend payout ratio			0.0	%			28.6	%			33.3	%			38.6	%
	Dividend yield			0.0	%			2.4	%			2.7	%			2.9	%
	Average daily volume (1 month)			479				1,326				1,833				11,153

(1)	Earnings estimates from management projections.

		Implied Exchange
		Ratio				Premium to 1.20x
3-Year average			1.28	x			7.0	%
Last 12 months’ average			1.24	x			3.2	%
Last 6 months’ average			1.24	x			3.1	%
Last 90 days’ average			1.22	x			1.9	%
Last 30 days’ average			1.20	x			(0.4	)%

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						Centrue
Category		UnionBancorp				Financial
Assets			51.4				48.6
Gross loans			48.3				51.7
Deposits			51.9				48.1
Core deposits			46.8				53.2
Equity			60.2				39.8
Tangible equity			68.2				31.8
2005 earnings			48.8				51.2
5/31/06 YTD earnings			65.0				35.0
5/31/06 YTD adjusted earnings(1)			59.5				40.5
2006 budgeted earnings			56.8				43.2
2007 budgeted earnings			54.4				45.6
Ownership at transaction consideration mix			58.6				41.4

Note:	All earnings are GAAP basis. Does not include purchase accounting adjustments.

(1)	UnionBancorp net income adjusted to exclude negative $800,000 pre-tax loan loss provision in first quarter of 2006.

	•	2.7 million shares of UnionBancorp common stock issued as stock consideration, based on the number of shares of Centrue Financial common stock outstanding as of June 27, 2006, including shares underlying restricted stock units but excluding shares underlying stock options;
	•	UnionBancorp 2006 and 2007 GAAP earnings per share of $1.34 and $1.46 per UnionBancorp management;
	•	Centrue Financial 2006 and 2007 GAAP earnings per share of $1.75 and $2.10 per Centrue Financial management;
	•	Cost savings of 9.3% of the combined entity’s projected non-interest expense; 64% of cost saves achieved in 2007 and 100% achieved in 2008;
	•	Transaction related expenses of $2.7 million after-tax;
	•	Core deposit intangibles equal to 3% of Centrue Financial’s core deposits totaling $7.6 million of intangibles, taxed at 35%, amortized using straight-line over 10 years;
	•	$2.8 million in net asset (held-to-maturity and available-for-sale securities) adjustments resulting in $360,000 in after tax GAAP amortization income in 2007 and 2008.

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		Centrue
		Financial				UnionBancorp
		Accretion				Accretion
2007 GAAP EPS accretion			4.79	%			25.05	%
2007 Cash EPS accretion			4.35				23.25
2008 GAAP EPS accretion			6.76				37.18
2008 Cash EPS accretion			6.21				35.19

Year Ended December 31,		2007				2008
Leverage ratio			8.33	%			9.09	%
Tier 1 capital ratio			11.70				12.30
Total capital ratio			12.95				13.55
Tangible equity/ Tangible assets			6.97				7.47

UnionBancorp Pro Forma Impact For the Year Ended December 31,		2007				2008
Book value			7.69	%			10.15	%
Tangible book value			(13.60	)			(9.11	)

Centrue Financial Pro Forma Impact for the Year Ended December 31,		2007				2008
Book value			7.43	%			5.19	%
Tangible book value			12.94				9.52

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Acquiror		Acquiree
UNB Corporation		BancFirst Ohio Corp. (Zanesville, OH)
MB Financial, Inc.		MidCity Financial Corporation (Chicago, IL)
Chemical Financial Corporation		Shoreline Financial Corporation (Benton Harbor, MI)
National Commerce Bancorp		CCB Financial Corporation (Durham, NC)
Santa Barbara Bancorp		Pacific Capital Bancorp (Salinas, CA)
First Hawaiian Inc.		Bank of the West (San Francisco, CA)
Citizens Bancshares Inc.		Mid Am, Inc. (Bowling Green, OH)
Associated Banc-Corp		First Financial Corporation (Stevens Point, WI)(1)
Southern National Corporation		BB&T Financial Corporation (Wilson, NC)
Comerica Incorporated		Manufacturers National Corporation (Detroit, MI)

(1)	Indicates thrift transaction.

			Centrue				Comparable
			Financial/				Merger
			UnionBancorp				Average
Transaction Price to:
	Last 12 months earnings per share			14.7	x			15.6	x
	Estimated forward earning per share			13.8	x			13.8	x
	Book value per share			125	%			225	%
	Tangible book value per share			201	%			244	%
Tangible Transaction Premium to:
	Core deposits			6.6	%			15.7	%
	Stock price (1 month prior to announcement)			4.8	%(1)			7.8	%
Combined cost savings (% of non-interest expense)				9.3	%			10.3	%

(1)	Based on Centrue Financial stock price as of June 27, 2006 close.

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							Centrue				Acquiror				Acquiree
			UnionBancorp				Financial				Average				Average
Contribution:
	Ownership			58.6	%			41.4	%			52.2	%			47.8	%
	Assets			51.4				48.6				50.7				49.3
	Loans			48.3				51.7				51.0				49.0
	Equity			60.2(1	)			39.8(1	)			51.1				48.9
	Net income			48.8				51.2				51.0				49.0
Accretion/(dilution):
	Equity			(1.5	)			1.5				1.1				(1.1	)
	Net income			9.9				(9.9	)			1.2				(1.2	)

(1)	Based on 2005 actual net income.

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	•	not issue any additional shares of stock;
	•	confer with each other on material operational matters;
	•	make loans only in accordance with sound credit practices and on arms-length terms and obtain the consent of the other before making any new loans greater than $3,000,000;
	•	cause our respective allowances for loan and lease losses to be adequate in all material respects;
	•	file, on a timely basis, all required regulatory filings; and
	•	not take any action that would cause a breach of any of our representation and warranties.

	•	interim financial statements; and
	•	reasonable notice of any fact or condition creating a breach of the merger agreement.

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	•	to use all reasonable efforts and to cooperate in the preparation and filing of all applications, notices and documents required to obtain regulatory approval and/or consents from governmental authorities for the merger and the merger agreement;
	•	to use reasonable and diligent good faith efforts to satisfy the conditions required to close the merger and to complete the merger as soon as practicable;
	•	that neither will intentionally act in a manner that would cause a breach of the merger agreement or that would cause a representation made in the merger agreement to become untrue;
	•	to provide the other party with reasonable access to information under the condition that the information be kept confidential; and
	•	to coordinate publicity of the transactions contemplated by the merger agreement with the media and their respective stockholders.

	•	Centrue Financial’s representations and warranties in the merger agreement must be accurate as of the date of the merger agreement and as of the date the merger becomes effective, except for any untrue or incorrect representations and warranties that do not have a material adverse effect on Centrue Financial on a consolidated basis or on UnionBancorp’s rights under the merger agreement;
	•	Centrue Financial must have performed and complied with all of its covenants and obligations under the merger agreement, except where any non-performance or non-compliance would not have a material adverse effect on Centrue Financial on a consolidated basis or on UnionBancorp’s rights under the merger agreement;
	•	all proceedings to be taken by Centrue Financial in connection with the merger, and all documents relating to these proceedings, must be reasonably satisfactory in form and substance to counsel for UnionBancorp;
	•	the merger agreement and the transactions it contemplates must have been approved by UnionBancorp’s and Centrue Financial’s stockholders;
	•	there must not be pending any proceeding involving any challenge to, or seeking damages or other relief in connection with, the merger, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with the merger, in either case that would reasonably be expected to have a material adverse effect on Centrue Financial or its stockholders or on UnionBancorp’s rights under the merger agreement;
	•	there must not have been since the date of the merger agreement any event or occurrence that would be reasonably likely to have a material adverse effect on Centrue Financial or any of its subsidiaries;

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	•	all consents and approvals required in connection with the merger must have been obtained (except to the extent that the failure to obtain such consents or approvals would not have a material adverse effect);
	•	the completion of the merger must not conflict with or result in a violation of any applicable laws or legal requirements;
	•	the Securities and Exchange Commission must have declared the registration statement registering the shares of UnionBancorp common stock to be issued to Centrue Financial’s stockholders in the merger, of which this joint proxy statement-prospectus is a part, effective under the Securities Act of 1933, as amended;
	•	an opinion from Sandler O’Neill & Partners, L.P. to the effect that the merger is fair to UnionBancorp’s stockholders from a financial point of view must have been received and not withdrawn;
	•	the employment agreements between each of Thomas A. Daiber, Scott A. Yeoman and Kurt R. Stevenson and UnionBancorp must be in full force and effect; and
	•	the written opinion as to the tax-free nature of the merger must have been received.

	•	UnionBancorp’s representations and warranties in the merger agreement must be accurate as of the date of the merger agreement and as of the date the merger becomes effective, except for any untrue or incorrect representations and warranties that do not have a material adverse effect on UnionBancorp on a consolidated basis or on Centrue Financial’s rights under the merger agreement;
	•	UnionBancorp must have performed and complied with all of its covenants and obligations under the merger agreement, except where any non-performance or non-compliance would not have a material adverse effect on UnionBancorp on a consolidated basis or on Centrue Financial’s rights under the merger agreement;
	•	all proceedings to be taken by UnionBancorp in connection with the merger, and all documents relating to these proceedings, must be reasonably satisfactory in form and substance to counsel for Centrue Financial;
	•	the merger agreement and the transactions it contemplates must have been approved by UnionBancorp’s and Centrue Financial’s stockholders;
	•	there must not be pending any proceeding involving any challenge to, or seeking damages or other relief in connection with, the merger, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with the merger, in either case that would reasonably be expected to have a material adverse effect on UnionBancorp or its stockholders or on Centrue Financial’s rights under the merger agreement;
	•	there must not have been since the date of the merger agreement any event or occurrence that would be reasonably likely to have a material adverse effect on UnionBancorp or any of its subsidiaries;
	•	all consents and approvals required in connection with the merger must have been obtained (except to the extent that the failure to obtain such consents or approvals would not have a material adverse effect);
	•	the completion of the merger must not conflict with or result in a violation of any applicable laws or legal requirements;
	•	the Securities and Exchange Commission must have declared the registration statement registering the shares of UnionBancorp common stock to be issued to Centrue Financial’s stockholders in the merger effective under the Securities Act;

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	•	an opinion from Keefe Bruyette & Woods, Inc. to the effect that the merger is fair to Centrue Financial’s stockholders from a financial point of view must have been received and not withdrawn;
	•	the employment agreements between each of Thomas A. Daiber, Scott A. Yeoman and Kurt R. Stevenson and UnionBancorp must be in full force and effect; and
	•	the written opinion as to the tax-free nature of the merger must have been received.

	•	by UnionBancorp, if any of the conditions to its obligation to complete the merger, as described above, has not been satisfied or has become impossible, and UnionBancorp has not waived the condition;
	•	by Centrue Financial, if any of the conditions to its obligation to consummate the merger, as described above, has not been satisfied or has become impossible, and Centrue Financial has not waived the condition;
	•	by either UnionBancorp or Centrue Financial, if the closing of the merger has not occurred, other than through the failure of the party seeking to terminate the merger agreement to perform any of its required obligations under the merger agreement, by March 1, 2007 or such later date as the parties may agree, except that, in general, the termination date can be extended for up to ninety days if the sole reason that the closing has not occurred is due to the fact that the regulatory approvals have not been received;
	•	by Centrue Financial, but subject to the special termination fee described below, if Centrue Financial receives an acquisition proposal that is determined by the Centrue Financial board of directors to be on terms that are more favorable to the stockholders of Centrue Financial than the merger, and prior written notice, together with a summary of the terms of, and the identity of the person making, the proposal are provided to UnionBancorp (a “Superior Centrue Financial Proposal”); and
	•	by UnionBancorp, but subject to the special termination fee described below, if UnionBancorp receives an acquisition proposal that is determined by the UnionBancorp board of directors to be on terms that are more favorable to the stockholders of UnionBancorp than the merger, and prior written notice, together with a summary of the terms of, and the identity of the person making, the proposal are provided to Centrue Financial (a “Superior UnionBancorp Proposal”).

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	Centrue Financial Termination Payments.

	•	If the merger agreement is terminated by UnionBancorp because Centrue Financial has not satisfied its conditions or the closing has not occurred by March 1, 2007 and, in either case, Centrue Financial knowingly breached its covenants, agreements, representations or warranties under the merger agreement (unless such breach is a result of the failure by UnionBancorp to perform and comply with any of its obligations) then, provided UnionBancorp is in compliance with its obligations under the merger agreement, Centrue Financial must pay $2,700,000 to UnionBancorp. (Notwithstanding the foregoing, the termination date can be extended for up to ninety days if the sole reason that the closing has not occurred is due to the fact that the regulatory approvals have not been received.)
	•	If the merger agreement is terminated by Centrue Financial or UnionBancorp because Centrue Financial’s stockholders fail to approve the merger (a “Centrue Financial Stockholder Termination”); then, provided UnionBancorp is in compliance with its obligations under the merger agreement, Centrue Financial must pay $500,000 to UnionBancorp.
	•	In addition to the $500,000 payment described above (if any), if there is a Centrue Financial Stockholder Termination and, within twelve months after such Centrue Financial Stockholder Termination, Centrue Financial enters into an agreement with any party other than UnionBancorp providing for the acquisition of Centrue Financial, then, provided UnionBancorp was in compliance with its obligations under the merger agreement, Centrue Financial must pay $2,200,000 to UnionBancorp.
	•	If Centrue Financial terminates the merger agreement as a result of a Superior Centrue Financial Proposal, then Centrue Financial must pay $2,700,000 to UnionBancorp.

	UnionBancorp Termination Payments.

	•	If the merger agreement is terminated by Centrue Financial because UnionBancorp has not satisfied its conditions or the closing has not occurred by March 1, 2007 and, in either case, UnionBancorp knowingly breached its covenants, agreements, representations or warranties under the merger agreement (unless such breach is a result of the failure by Centrue Financial to perform and comply with any of its obligations) then, provided Centrue Financial is in compliance with its obligations under the merger agreement, UnionBancorp must pay $2,700,000 to Centrue Financial. (Notwithstanding the foregoing, the termination date can be extended for up to ninety days if the sole reason that the closing has not occurred is due to the fact that the regulatory approvals have not been received.)
	•	If the merger agreement is terminated by UnionBancorp or Centrue Financial because UnionBancorp’s stockholders fail to approve the merger (a “UnionBancorp Stockholder Termination”); then, provided Centrue Financial is in compliance with its obligations under the merger agreement, UnionBancorp must pay $500,000 to Centrue Financial.
	•	In addition to the $500,000 payment described above (if any), if there is a UnionBancorp Stockholder Termination and, within twelve months after such UnionBancorp Stockholder Termination, UnionBancorp enters into an agreement with any party other than Centrue Financial providing for the acquisition of UnionBancorp, then, provided Centrue Financial was in compliance with its obligations under the merger agreement, UnionBancorp must pay $2,200,000 to Centrue Financial.
	•	If UnionBancorp terminates the merger agreement as a result of a Superior UnionBancorp Proposal, then UnionBancorp must pay $2,700,000 to Centrue Financial.

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	Directors of the Combined Company

(UnionBancorp Designees)		(Centrue Financial Designees)
Dennis J. McDonnell *		Thomas A. Daiber
Scott C. Sullivan		Mark L. Smith
Richard J. Berry		Randall E. Ganim
Walter E. Breipohl		Michael A. Griffith
John A. Shinkle		Michael J. Hejna

*	Chairman of the board of the directors.

		UnionBancorp				Position with UnionBancorp and
Name (Age)		Director Since				Principal Occupation
Dennis J. McDonnell (Age 64)			2000			Chairman of the Board and Director of UnionBancorp; Chairman, McDonnell Investment Management, LLC
Scott C. Sullivan (Age 51)			1996			Director of UnionBancorp; Attorney, Williams & McCarthy
Richard J. Berry (Age 54)			1985			Director of UnionBancorp; Attorney, Myers, Berry, O’Conor & Kuzma, Ltd.
Walter E. Breipohl (Age 53)			1993			Director of UnionBancorp; Broker/Owner, Kaszynski-Breipohl Realtors
John A. Shinkle (Age 54)			1997			Director of UnionBancorp; Senior Vice President, Stifel Nicolaus & Company, Inc.

		Centrue Financial				Position with Centrue Financial and
Name (Age)		Director Since				Principal Occupation
Thomas A. Daiber (Age 48)			2003			Director of Centrue Financial; President and Chief Executive Officer of Centrue Financial since 2003
Mark L. Smith (Age 56)			2001			Director or Centrue Financial; President of Smith, Koelling, Dykstra and Ohm, P.C.
Randall E. Ganim (Age 52)			2006			Director of Centrue Financial; Founder and President of Ganim, Meder, Childers & Hoering, P.C.
Michael A. Griffith (Age 47)			2002			Chairman of the Board and Director of Centrue Financial; Founder and Chief Executive Officer of Aptuit, Inc.
Michael J. Hejna (Age 52)			2003			Director of Centrue Financial; President and Chief Executive Officer of Gundaker Commercial Group, Inc.

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	Executive Officers of the Combined Company

Thomas A. Daiber		President and Chief Executive Officer
Scott A. Yeoman		Chief Operating Officer
Kurt R. Stevenson		Chief Financial Officer

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	•	in favor of the merger and the transactions contemplated by the merger agreement;
	•	against any merger with Centrue Financial by a party other than UnionBancorp;
	•	against any action or agreement that would result in a material breach of any term or any other obligation of Centrue Financial under the merger agreement; and
	•	against any action or agreement which would impede or interfere with the transactions contemplated by the merger agreement.

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	•	in favor of the merger and the transactions contemplated by the merger agreement;
	•	against any merger with UnionBancorp by a party other than Centrue Financial;
	•	against any action or agreement that would result in a material breach of any term or any other obligation of UnionBancorp under the merger agreement; and
	•	against any action or agreement which would impede or interfere with the transactions contemplated by the merger agreement.

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	•	a brief description of the matter the stockholder desires to present;
	•	the name and record address of the stockholder who proposed the matter;
	•	the class and number of shares of Centrue Financial’s capital stock that are beneficially owned by the stockholder; and
	•	any material interest of the stockholder in the matter.

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	•	prior to the acquisition date the UnionBancorp board approved the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
	•	upon completion of the transaction in which the stockholder became an interested stockholder, the stockholder owns at least 85% of UnionBancorp’s voting stock, excluding stock held by officers and directors and employee stock plans in which the participants do not have the right to determine confidentially whether shares held by the plan will be tendered in an exchange offer or a tender offer; or
	•	on or after the acquisition date, the business combination is approved by the UnionBancorp board and by the UnionBancorp stockholders, at a meeting duly called for that purpose, provided that stockholders owning at least two-thirds of UnionBancorp’s voting stock approve the business combination. When determining whether this two-thirds vote requirement has been satisfied, voting stock held by the interested stockholder is not included.

	•	be approved by holders of at least 80% of the total number of outstanding voting shares, voting as a single class, of Centrue;
	•	be approved by at least two-thirds of the continuing board of directors, meaning persons serving prior to the 10% stockholder becoming a 10% stockholder, and be approved by holders of a majority of the total number of outstanding voting shares; or
	•	meet certain price conditions, and be approved by holders of a majority of the total number of outstanding voting shares.

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	•	by holders of 662/3% of the outstanding shares of stock of UnionBancorp; or
	•	by a vote of a majority of the board of directors.

	•	for any breach of the director’s duty of loyalty to UnionBancorp or its stockholders;
	•	for acts or omissions not in good faith that involve intentional misconduct or knowing violation of the law;
	•	under Section 174 of the Delaware General Corporation Law, which relates to unlawful payment of dividends or unlawful stock purchase or redemption and expressly sets forth a negligence standard with respect to such liability; and
	•	for any transaction from which the director derived any improper benefit.

	•	for any breach of the director’s duty of loyalty;
	•	for acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law;
	•	under Section 174 of the Delaware General Corporation Law, which relates to unlawful payment of dividends or unlawful stock purchase or redemption and expressly sets forth a negligence standard with respect to such liability; and
	•	for any transaction from which the director derived an improper personal benefit.

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	•	a change in UnionBancorp’s corporate name from UnionBancorp, Inc. to Centrue Financial Corporation;
	•	an increase in the number of authorized shares of UnionBancorp common stock from 10 million to 15 million;
	•	elimination of subsection (ii) of Article VI’s requirement that certain amendments to the bylaws be approved by a supermajority vote of the stockholders; and
	•	elimination of Article XV of the certificate of incorporation which expressly adopted Section 203 of the Delaware General Corporation Law concerning business combinations with interested persons, which was described in detail above.

	•	shares of UnionBancorp common stock were issued and outstanding;
	•	shares of UnionBancorp common stock were reserved for issuance under UnionBancorp’s stock incentive plans;
	•	shares of UnionBancorp common stock were reserved for issuance to Centrue Financial’s stockholders upon completion of the merger; and
	•	shares were held in the treasury of UnionBancorp.

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Affiliate		Markets Served		Property/Type Location
UnionBancorp				Administrative Office: Ottawa, IL
UnionBank		Bureau, DeKalb, Grundy, Jo Daviess, Kane, Kendall, LaSalle, Livingston and Whiteside Counties		Main Office: Streator, IL Sixteen banking offices and three non-banking offices located in markets served.

	Comparison of Operating Results for the Years Ended December 31, 2005, 2004, and 2003.

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	Net Income

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	Net Interest Income/ Margin

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							For the Years Ended December 31,
							2005												2004												2003
											Interest												Interest												Interest
							Average				Income/				Average				Average				Income/				Average				Average				Income/				Average
							Balance				Expense				Rate				Balance				Expense				Rate				Balance				Expense				Rate
ASSETS
Interest-earning assets
	Interest-earning deposits						$	147			$	7				4.65	%		$	137			$	2				1.46	%		$	237			$	5				2.11	%
	Securities(1)
		Taxable						169,468				6,331				3.73				192,835				5,925				3.06				196,195				6,805				3.47
		Nontaxable(2)						21,076				1,504				7.14				26,066				1,848				7.07				31,239				2,323				7.44
			Total securities (tax equivalent)					190,544				7,835				4.11				218,901				7,773				3.54				227,434				9,128				4.01
		Federal funds sold						3,785				115				3.23				3,433				46				1.39				4,442				50				1.13
		Loans(3)(4)
			Commercial					117,571				8,131				6.92				130,436				7,467				5.71				133,543				8,148				6.10
			Real estate					277,267				17,640				6.36				286,280				17,499				6.10				303,777				20,373				6.71
			Installment and other					16,945				1,571				9.27				30,889				2,840				9.17				45,023				4,259				9.46
				Gross loans (tax equivalent)				411,783				27,342				6.64				447,605				27,806				6.20				482,343				32,780				6.80
					Total interest-earning assets			606,259				35,299				5.82				670,076				35,627				5.30				714,456				41,963				5.87
Noninterest-earning assets
	Cash and cash equivalents							18,874												21,497												21,735
	Premises and equipment, net							13,782												15,533												14,923
	Other assets							24,138												24,879												30,604
		Total non-interest-earning assets						56,794												61,909												67,262
			Total assets				$	663,053											$	731,985											$	781,718
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities
	NOW accounts						$	72,722			$	915				1.26	%		$	57,887			$	319				0.55	%		$	53,917			$	295				0.55	%
	Money market accounts							59,160				1,080				1.83				94,074				1,166				1.24				109,700				1,544				1.41
	Savings deposits							42,122				212				0.50				47,337				265				0.56				49,334				373				0.76
	Time $100,000 and over							148,238				4,522				3.05				148,701				3,836				2.57				157,824				4,703				2.98
	Other time deposits							136,745				4,181				3.06				156,198				4,323				2.76				174,921				5,538				3.17
	Federal funds purchased and repurchase agreements							6,243				197				3.16				5,099				98				1.92				6,776				122				1.80
	Advances from FHLB							54,571				2,128				3.91				70,359				2,887				4.09				70,019				2,997				4.28
	Notes payable							9,176				477				5.20				8,033				357				4.43				7,912				325				4.11
		Total interest-bearing liabilities						528,977				13,712				2.59				587,688				13,251				2.25				630,403				15,897				2.52
Noninterest-bearing liabilities
	Non-interest-bearing deposits							61,040												71,912												74,855
	Other liabilities							4,133												4,503												7,084
		Total non-interest-bearing liabilities						65,173												76,415												81,939
	Stockholders’ equity							68,903												67,882												69,376
Total liabilities and stockholders’ equity							$	663,053											$	731,985											$	781,718
Net interest income (tax equivalent)											$	21,587											$	22,376											$	26,066
	Net interest income (tax equivalent) to total earning assets															3.56	%											3.34	%											3.65	%
	Interest-bearing liabilities to earning assets							87.25	%											87.70	%											88.24	%

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(1)	Average balance and average rate on securities classified as available-for-sale are based on historical amortized cost balances.
(2)	Interest income and average rate on non-taxable securities are reflected on a tax equivalent basis based upon a statutory federal income tax rate of 34%.
(3)	Nonaccrual loans are included in the average balances.
(4)	Overdraft loans are excluded in the average balances.

																	For the Years Ended December 31,
					2005 Compared to 2004												2004 Compared to 2003
					Change Due to												Change Due to
					Volume				Rate				Net				Volume				Rate				Net
Interest income:
	Interest-earning deposits				$	—			$	5			$	5			$	(2	)		$	(1	)		$	(3	)
	Investment securities:
		Taxable				(778	)			1,184				406				(110	)			(770	)			(880	)
		Nontaxable				(310	)			(34	)			(344	)			(219	)			(256	)			(475	)
	Federal funds sold					5				65				69				(14	)			10				(2	)
	Loans					(2,664	)			2,200				(464	)			(2,235	)			(2,739	)			(4,974	)
		Total interest income				(3,748	)			3,420				(328	)			(2,580	)			(3,756	)			(6,334	)
Interest expense:
	NOW accounts					99				497				596				24				—				24
	Money market accounts					(524	)			438				(86	)			(205	)			(173	)			(378	)
	Savings deposits					(27	)			(26	)			(53	)			(14	)			(94	)			(108	)
	Time, $100,000 and over					(12	)			698				686				(256	)			(611	)			(867	)
	Other time					(576	)			434				(142	)			(550	)			(665	)			(1,215	)
	Federal funds purchased and repurchase agreements					26				73				99				(32	)			8				(24	)
	Advances from FHLB					(634	)			(125	)			(759	)			15				(125	)			(110	)
	AG & Comm Participations					—				—				—				—				—				—
	Notes payable					54				66				120				5				27				32
		Total interest expense				(1,594	)			2,055				461				(1,013	)			(1,633	)			(2,646	)
			Net interest income		$	(2,154	)		$	1,365			$	(789	)		$	(1,567	)		$	(2,123	)		$	(3,690	)

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			Years Ended December 31,
			2005				2004				2003
			(Dollars in thousands)
	Service charges		$	1,996			$	2,866			$	3,090
	Merchant fee income			—				56				60
	Trust income			811				740				701
	Mortgage banking income			1,350				2,020				3,947
	Insurance commissions and fees			1,818				2,234				2,318
	Bank owned life insurance (BOLI)			545				573				681
	Securities gains (losses), net			(79	)			123				281
	Gain on sale of assets			4				4,263				—
	Other income			1,157				1,227				2,141
Total noninterest income			$	7,602			$	14,102			$	13,719

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			Years Ended December 31,
			2005				2004				2003
			(Dollars in thousands)
	Salaries and employee benefits		$	13,789			$	15,410			$	16,020
	Occupancy expense, net			1,571				2,461				2,138
	Furniture and equipment expenses			1,935				2,215				2,094
	Marketing			496				615				709
	Supplies and printing			359				435				541
	Telephone			430				546				874
	Other real estate expense			59				8				178
	Amortization of intangible assets			170				337				247
	Other expense			4,156				4,954				5,806
Total noninterest expense			$	22,965			$	26,981			$	28,607

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		Years Ended December 31,
		2005				2004				2003
Income before income taxes		$	5,372			$	6,859			$	2,001
Applicable income taxes			1,199				2,056				(129	)
Effective tax rates			22.3	%			30.0	%			(6.45	)%

	Interest Rate Sensitivity Management

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		Net Interest Income
December 31, 2005		Amount				Change				Change
		(Dollars in thousands)
+200 bp		$	23,043			$	959				4.34	%
+100 bp			22,629				545				2.47
Base			22,084				—				—
–100 bp			21,314				(770	)			(3.49	)
–200 bp			19,744				(2,340	)			(10.59	)

		Net Interest Income
December 31, 2004		Amount				Change				Change
		(Dollars in thousands)
+200 bp		$	21,070			$	996				4.96	%
+100 bp			20,635				560				2.79
Base			20,074				—				—
–100 bp			19,048				(1,026	)			(5.11	)
–200 bp			17,559				(2,516	)			(12.53	)

	Financial Condition

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			Aggregate Principal Amount
			December 31,
			2005				2004				2003				2002				2001
			(Dollars in Thousands)
Commercial			$	91,537			$	91,941			$	105,767			$	100,189			$	107,382
Agricultural				26,694				28,718				33,766				36,467				40,563
Real estate:
	Commercial mortgages			126,503				129,597				134,985				147,253				150,878
	Construction			68,508				38,882				30,674				24,486				23,676
	Agricultural			33,033				30,601				37,092				34,688				34,611
	1-4 family mortgages			57,920				77,566				94,163				87,411				94,368
Installment				12,747				21,502				37,415				49,949				50,961
Other				583				468				2,950				2,786				2,529
Total loans				417,525				419,275				476,812				483,229				504,968
Allowance for loan losses				(8,362	)			(9,732	)			(9,011	)			(6,450	)			(6,295	)
	Loans, net		$	409,163			$	409,543			$	467,801			$	476,779			$	498,673

				Aggregate Principal Amount
				Percentage of Total Loan Portfolio
				December 31,
				2005				2004				2003				2002				2001
Commercial					21.92	%			21.93	%			22.18	%			20.73	%			21.27	%
Agricultural					6.39				6.85				7.08				7.55				8.03
Real estate:
	Commercial mortgages				30.31				30.91				28.31				30.47				29.88
	Construction				16.41				9.27				6.43				5.07				4.69
	Agricultural				7.91				7.30				7.78				7.18				6.85
	1-4 family mortgages				13.87				18.50				19.75				18.08				18.69
		Installment			3.05				5.13				7.85				10.34				10.09
		Other loans			0.14				0.11				0.62				0.58				0.50
	Gross loans				100.00	%			100.00	%			100.00	%			100.00	%			100.00	%

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			Within				1 to				After
			1 Year				5 Years				5 Years				Total
			(Dollars in thousands)
Commercial			$	76,006			$	14,475			$	1,056			$	91,537
Agricultural				20,624				5,880				190				26,694
Real estate				153,568				114,406				18,178				286,152
Installment				6,036				7,010				96				13,142
	Total		$	256,234			$	141,771			$	19,520			$	417,525

(1)	Maturities based upon contractual maturity dates

			Within				1 to				After
			1 Year				5 Years				5 Years				Total
			(Dollars in thousands)
Fixed rate			$	54,226			$	54,933			$	15,501			$	124,660
Variable rate				201,334				86,135				2,314				289,783
Nonaccrual				674				703				1,705				3,082
	Total		$	256,234			$	141,771			$	19,520			$	417,525

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			December 31,
			2005				2004				2003				2002				2001
			(Dollars in thousands)
Nonaccrual loans			$	3,082			$	3,649			$	8,149			$	3,931			$	7,259
Loans 90 days past due and still accruing interest				922				553				328				829				1,616
	Total nonperforming loans			4,004				4,202				8,477				4,760				8,875
Other real estate owned				203				420				227				1,557				1,886
	Total nonperforming assets		$	4,207			$	4,622			$	8,704			$	6,317			$	10,761
Nonperforming loans to total loans				0.96	%			1.00	%			1.78	%			0.99	%			1.76	%
Nonperforming assets to total loans				1.01				1.10				1.83				1.31				2.13
Nonperforming assets to total assets				0.62				0.69				1.10				0.80				1.44

		Number				Net Book
		of				Carrying
		Parcels				Value
		(Dollars in thousands)
Developed property			1			$	47
Vacant land or unsold lots			2				156
Total other real estate owned			3			$	203

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				December 31,
				2005				2004				2003				2002				2001
				(Dollars in thousands)
Beginning balance				$	9,732			$	9,011			$	6,450			$	6,295			$	6,414
Charge-offs:
	Commercial				342				1,497				4,791				2,561				3,202
	Real estate mortgages				1,611				389				626				683				977
	Installment and other loans				367				578				812				634				496
		Total charge-offs			2,320				2,464				6,229				3,878				4,675
Recoveries:
	Commercial				394				1,021				415				354				312
	Real estate mortgages				208				230				46				41				10
	Installment and other loans				98				184				93				64				73
		Total recoveries			700				1,435				554				459				395
Net charge-offs					1,620				1,029				5,675				3,419				4,280
Provision for loan losses					250				1,924				8,236				3,574				4,161
Reduction due to sale of loans					—				174				—				—				—
Ending balance				$	8,362			$	9,732			$	9,011			$	6,450			$	6,295
Period end total loans				$	417,525			$	419,275			$	476,812			$	483,229			$	504,968
Average loans				$	411,783			$	447,605			$	482,343			$	490,360			$	504,648
Ratio of net charge-offs to average loans					0.39	%			0.23	%			1.18	%			0.70	%			0.85	%
Ratio of provision for loan losses to average loans					0.06				0.43				1.71				0.73				0.82
Ratio of allowance for loan losses to ending total loans					2.00				2.32				1.89				1.33				1.25
Ratio of allowance for loan losses to total nonperforming loans					208.84				231.60				106.30				135.50				70.93
Ratio of allowance at end of period to average loans					2.03				2.17				1.87				1.32				1.25

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			December 31,
			2005								2004								2003								2002								2001
							Loan								Loan								Loan								Loan								Loan
							Category								Category								Category								Category								Category
							to Gross								to Gross								to Gross								to Gross								to Gross
			Amount				Loans				Amount				Loans				Amount				Loans				Amount				Loans				Amount				Loans
			(Dollars in thousands)
Commercial			$	7,386				28.32	%		$	6,035				28.78	%		$	4,935				29.26	%		$	2,863				28.28	%		$	3,499				29.30	%
Real estate				773				68.49				3,311				65.98				2,846				62.27				2,110				60.80				1,786				60.11
Installment and other loans				203				3.19				386				5.24				593				8.47				719				10.92				537				10.59
Unallocated				—				—				—				—				637				—				758				—				473				—
	Total		$	8,362				100.00	%		$	9,732				100.00	%		$	9,011				100.00	%		$	6,450				100.00	%		$	6,295				100.00	%

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				December 31,
				2005								2004								2003
								% of								% of								% of
				Amount				Portfolio				Amount				Portfolio				Amount				Portfolio
				(Dollars in thousands)
Available-for-Sale
	U.S. government agencies and corporations				30,857				15.71				20,924				10.92				30,270				12.00
	U.S. government agency mortgage backed securities				101,022				51.42				117,500				61.30				158,305				62.76
	States and political subdivisions				18,400				9.37				24,647				12.86				29,723				11.78
	Collateralized mortgage obligations				20,938				10.66				2,486				1.30				5,972				2.37
	Corporate bonds				6,907				3.52				8,239				4.30				10,598				4.20
	Other securities				18,316				9.32				17,865				9.32				17,380				6.89
		Total		$	196,440				100.00	%		$	191,661				100.00	%		$	252,248				100.00	%

			Maturing
											After 1 but								After 5 but
			Within 1 Year								Within 5 Years								Within 10 Years								After 10 Years
																																			Total
			Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield				Amount
			(Dollars in thousands)
Available-for-Sale
U.S. government agencies and corporations			$	3,737				4.114	%		$	24,247				4.090	%		$	2,873				4.900	%		$	—				—	%		$	30,857
U.S. government agency mortgage backed securities				221				7.952				911				5.939				6,253				5.276				93,637				4.138				101,022
States and political subdivisions(1)				2,722				6.527				9,088				6.694				5,163				7.309				1,427				7.586				18,400
Collateralized mortgage obligations				—				—				173				4.116				—				—				20,765				5.517				20,938
Corporate bonds				—				—				6,907				5.653				—				—				—				6,907
	Total		$	6,680							$	41,326							$	14,289							$	115,829							$	178,124

(1)	Rates on obligations of states and political subdivisions have been adjusted to tax equivalent yields using a 34% income tax rate

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			For the Years Ended December 31,
			2005												2004												2003
											Average												Average												Average
			Average				% of				Rate				Average				% of				Rate				Average				% of				Rate
			Amount				Total				Paid				Amount				Total				Paid				Amount				Total				Paid
			(Dollars in thousands)
Non-interest-bearing demand deposits			$	61,040				11.74	%			—	%		$	71,912				12.48	%			—	%		$	74,855				12.06	%			—	%
Savings accounts				42,122				8.10				0.50				47,337				8.22				0.56				49,334				7.95				0.76
Interest-bearing demand deposits				131,882				25.36				1.51				151,961				26.38				0.98				163,617				26.37				1.12
Time, less than $100,000				136,745				26.30				3.06				156,198				27.11				2.76				174,921				28.19				3.17
Time, $100,000 or more				148,238				28.50				3.05				148,701				25.81				2.57				157,824				25.43				2.98
	Total deposits		$	520,027				100.00	%			2.10	%		$	576,109				100.00	%			1.72	%		$	620,551				100.00	%			2.01	%

				(Dollars in thousands)
Maturity Range
	Three months or less			$	60,256
	Over three months through six months				30,823
	Over six months through twelve months				36,871
	Over twelve months				34,378
		Total		$	162,328

		For the Years Ended
		December 31,
		2005				2004				2003
Return on average assets			0.63	%			0.65	%			0.28	%
Return on average equity			6.06				7.06				3.16
Average equity to average assets			10.39				9.27				8.87
Dividend payout ratio for common stock			43.39				36.42				74.39

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	Liquidity

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	Contractual Obligations, Commitments, Contingencies, and Off-Balance Sheet Financial Instruments

			Payments Due by Period
			Within 1								4-				After 5
			Year				1-3 Years				5 Years				Years				Total
Contractual Obligations
Short-term debt			$	9,200			$	—			$	—			$	—			$	9,200
Long-term debt				—				268				—				—				268
Certificates of deposit				227,895				65,303				15,057				2,750				311,005
Operating leases				107				214				172				13				506
Severance payments				253				—				—				—				253
Series B Mandatory redeemable preferred stock				—				831				—				—				831
FHLB Advances				8,300				23,500				10,200				8,000				50,000
	Total contractual cash obligations		$	245,755			$	90,116			$	25,429			$	10,763			$	372,063

			Amount of Commitment Expiration per Period
			Within												After
			1 Year				1-3 Years				4-5 Years				5 Years				Total
Off-Balance Sheet Financial Instruments
Lines of credit			$	58,741			$	2,451			$	1,670			$	16,582			$	79,444
Standby letters of credit				7,444				622				—				—				8,066
	Total commercial commitments		$	66,185			$	3,073			$	1,670			$	16,582			$	87,510

	Capital Resources

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			December 31,												Minimum				Well
															Capital				Capitalized
			2005				2004				2003				Ratios				Ratios
			(Dollars in thousands)
Tier 1 risk-based capital			$	60,546			$	63,347			$	59,851
Tier 2 risk-based capital				6,266				6,067				7,790
Total capital				66,812				69,414				67,641
Risk-weighted assets				501,342				485,325				556,729
Capital ratios
	Tier 1 risk-based capital			12.1	%			13.0	%			10.8	%			4.0	%			6.0	%
	Tier 2 risk-based capital			13.3				14.3				12.2				8.0				10.0
	Leverage ratio			9.0				9.5				7.7				4.0				5.0

	Impact of Inflation, Changing Prices, and Monetary Policies

	Comparison of Operating Results for the Three and Six Month Periods Ended June 30, 2006 and 2005.

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	Second Quarter Highlights

	•	Earnings per share were unchanged compared to the second quarter of 2005.
	•	UnionBancorp’s earnings were positively impacted by a $300 negative provision for loan losses largely based on continued improvements in the quality of the loan portfolio, which was partially offset by a loss on sale of securities of $88 in order to better position the securities portfolio. Excluding these items, net income for the quarter would have equaled $1,163 or $0.29 per diluted share.
	•	The second quarter of 2005 results were positively impacted by a $251 reduction in state income taxes and $90 of interest received due to the receipt of a tax refund related to amended tax returns outstanding from prior years. Excluding these items, net income for the second quarter of 2005 would have equaled $1,076 or $0.25 per diluted share.
	•	Due to the flat yield curve, the net interest margin decreased to 3.37% during the second quarter of 2006 as compared with 3.59% for the same period in 2005 and 3.50% in the first quarter of 2006.
	•	The loan portfolio decreased to $403.5 million as compared to $417.5 million at December 31, 2005. Of this decrease in balances, approximately $7.7 million or 55% was related to the pay-off of action list credits refinanced with a competitor.
	•	The level of nonperforming loans to end of period loans totaled 0.70% as of June 30, 2006 compared to 0.95% at June 30, 2005 and 0.96% on December 31, 2005.
	•	Net charge-offs for the second quarter of 2006 were 0.09% of average loans as compared to 0.19% for the same period 2005.
	•	UnionBancorp’s Board of Directors approved the payment of a $0.12 quarterly cash dividend on UnionBancorp’s common stock, marking the 85th consecutive quarter of dividends paid to stockholders.

	Results of Operations

	Net Income

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	Net Interest Income/Margin

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							For the Three Months Ended June 30,
							2006												2005
											Interest												Interest								Change Due to:
							Average				Income/				Average				Average				Income/				Average
							Balance				Expense				Rate				Balance				Expense				Rate				Volume				Rate				Net
ASSETS
Interest-earning assets
	Interest-earning deposits Securities(1)						$	211			$	3				5.70	%		$	158			$	3				7.62	%		$	1			$	(1	)		$	—
		Taxable						175,260				2,030				4.64				164,510				1,484				3.61				102				443				545
		Non-taxable(2)						18,317				318				6.99				22,018				399				7.27				(29	)			(51	)			(80	)
			Total securities (tax equivalent)					193,577				2,345				4.86				186,528				1,880				4.04				73				392				465
		Federal funds sold						2,960				39				5.69				6,424				44				2.93				(34	)			29				(5	)
		Loans(3)(4)
			Commercial					111,997				1,981				7.09				119,364				2,018				6.79				(126	)			89				(37	)
			Real estate					284,843				4,986				7.02				276,962				4,338				6.29				126				522				648
			Installment and other					10,364				246				9.52				17,963				417				9.31				(116	)			(55	)			(171	)
				Gross loans (tax equivalent)				407,204				7,213				7.10				414,289				6,773				6.56				(116	)			556				440
					Total interest-earning assets			603,952				9,603				6.38				607,399				8,703				5.75				(76	)			976				900
Noninterest-earning assets
	Cash and cash equivalents							17,735												19,889
	Premises and equipment, net							13,740												13,818
	Other assets							23,285												23,975
		Total nonearning assets						54,760												57,682
			Total assets				$	658,712											$	665,081

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				For the Three Months Ended June 30,
				2006												2005
								Interest												Interest								Change Due to:
				Average				Income/				Average				Average				Income/				Average
				Balance				Expense				Rate				Balance				Expense				Rate				Volume				Rate				Net
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities
	NOW accounts			$	69,410			$	314				1.82	%		$	71,981			$	204				1.14	%		$	(7	)		$	118			$	111
	Money market accounts				52,834				360				2.73				58,944				234				1.59				(26	)			152				126
	Savings deposits				37,050				68				0.74				44,028				51				0.46				(9	)			26				17
	Time deposits				308,770				3,103				4.03				282,356				2,082				2.96				210				811				1,021
	Federal funds purchased and repurchase agreements				3,955				51				5.17				4,921				37				3.02				(8	)			22				14
	Advances from FHLB				47,074				455				3.88				57,430				550				3.87				(96	)			1				(95	)
	Notes payable and other				9,668				174				7.18				8,660				107				4.96				14				52				66
		Total interest-bearing liabilities			528,761				4,525				3.43				528,320				3,265				2.48				78				1,182				1,260
Noninterest-bearing liabilities
	Noninterest-bearing deposits				59,659												63,049
	Other liabilities				4,843												3,860
		Total noninterest-bearing liabilities			64,502												66,909
	Stockholders’ equity				65,449												69,852
	Total liabilities and stockholders’ equity			$	658,712											$	665,081
	Net interest income (tax equivalent)							$	5,078											$	5,438							$	(154	)		$	(206	)		$	(360	)
	Net interest income (tax equivalent) to total earning assets												3.37	%											3.59	%
	Interest-bearing liabilities to earning assets				87.55	%											86.98	%

(1)	Average balance and average rate on securities classified as available-for-sale is based on historical amortized cost balances.
(2)	Interest income and average rate on non-taxable securities are reflected on a tax equivalent basis based upon a statutory federal income tax rate of 34%.
(3)	Nonaccrual loans are included in the average balances.
(4)	Overdraft loans are excluded in the average balances.

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							For the Six Months Ended June 30,
							2006												2005
											Interest								Interest												Change Due to:
							Average				Income/				Average				Average				Income/				Average
							Balance				Expense				Rate				Balance				Expense				Rate				Volume				Rate				Net
ASSETS
Interest-earning assets
	Interest-earning deposits						$	231			$	7				6.11	%		$	143			$	3				4.23	%		$	2			$	2			$	4
	Securities(1)
		Taxable						178,249				4,025				4.54				163,438				2,909				3.59				283				828				1,111
		Non-taxable(2)						18,173				645				7.17				22,186				790				7.18				(58	)			(86	)			(144	)
			Total securities (tax equivalent)					196,422				4,663				4.79				185,624				3,696				4.02				225				742				967
		Federal funds sold						2,263				52				5.26				4,051				53				2.79				(32	)			35				3
		Loans(3)(4)
			Commercial					115,016				4,042				7.09				119,533				3,866				6.53				(149	)			325				176
			Real estate					284,405				9,820				6.96				277,207				8,517				6.20				228				1,075				1,303
			Installment and other					11,173				526				9.49				19,169				865				9.10				(375	)			36				(339	)
				Gross loans (tax equivalent)				410,594				14,388				7.07				415,909				13,248				6.43				(296	)			1,436				1,140
					Total interest-earning assets			609,510				19,117				6.32				605,727				17,003				5.66				(101	)			2,215				2,114
Noninterest-earning assets
	Cash and cash equivalents							18,126												18,729
	Premises and equipment, net							13,791												13,630
	Other assets							23,624												23,919
		Total nonearning assets						55,541												56,278
			Total assets				$	665,051											$	662,005
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities
	NOW accounts						$	69,702			$	596				1.73	%		$	71,272			$	369				1.04	%		$	(8	)		$	236			$	228
	Money market accounts							54,305				709				2.63				58,554				448				1.54				(35	)			296				261
	Savings deposits							37,790				122				0.65				43,661				113				0.52				(17	)			26				9
	Time deposits							308,490				5,897				3.85				279,146				3,960				2.86				451				1,486				1,937
	Federal funds purchased and repurchase agreements							4,977				123				4.98				7,993				111				2.80				(52	)			64				12
	Advances from FHLB							48,205				938				3.92				58,812				1,133				3.90				(202	)			6				(196	)
	Notes payable and other							10,356				340				6.62				8,102				188				4.68				61				91				152
		Total interest-bearing liabilities						533,825				8,725				3.30				527,540				6,322				2.42				198				2,205				2,403
Noninterest-bearing liabilities
	Noninterest-bearing deposits							60,689												60,211
	Other liabilities							4,903												3,946
		Total noninterest-bearing liabilities						65,592												64,157
	Stockholders’ equity							65,634												70,308
	Total liabilities and stockholders’ equity						$	665,051											$	662,005
	Net interest income (tax equivalent)										$	10,392											$	10,681							$	(299	)		$	10			$	(289	)
	Net interest income (tax equivalent) to total earning assets															3.44	%											3.56	%
	Interest-bearing liabilities to earning assets							87.58	%											87.09	%

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(1)	Average balance and average rate on securities classified as available-for-sale is based on historical amortized cost balances.
(2)	Interest income and average rate on non-taxable securities are reflected on a tax equivalent basis based upon a statutory federal income tax rate of 34%.
(3)	Nonaccrual loans are included in the average balances.
(4)	Overdraft loans are excluded in the average balances.

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		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2006				2005				2006				2005
Service charges		$	495			$	525			$	935			$	1,008
Trust income			199				187				418				402
Mortgage banking income			281				364				527				704
Insurance commissions and fees			414				472				793				893
Bank owned life insurance			137				135				277				269
Securities gains (losses), net			(88	)			—				(88	)			—
Gain on the sale of assets			(9	)			1				(9	)			3
Other income			268				347				604				602
		$	1,697			$	2,031			$	3,457			$	3,881

		Three Months								Six Months Ended
		Ended June 30,								June 30,
		2006				2005				2006				2005
Salaries and employee benefits		$	2,910			$	3,366			$	5,955			$	6,842
Occupancy expense, net			346				385				789				779
Furniture and equipment expense			521				461				1,033				885
Marketing			98				128				209				224
Supplies and printing			65				86				162				163
Telephone			118				106				235				213
Other real estate owned expense			2				29				8				34
Amortization of intangible assets			43				43				87				87
Other expenses			1,026				1,023				1,985				1,946
		$	5,129			$	5,627			$	10,463			$	11,173

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		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2006				2005				2006				2005
Income before income taxes		$	1,819			$	1,684			$	4,228			$	2,973
Applicable income taxes			525				302				1,288				627
Effective tax rates			28.9	%			17.9	%			30.5	%			21.1	%

	Interest Rate Sensitivity Management

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		June 30, 2006
		Net Interest Income
		Amount				Change				Change
		(Dollars in thousands)
+200 bp		$	23,116			$	347				1.52	%
+100 bp			23,013				244				1.07
Base			22,769				—				—
-100 bp			22,412				(357	)			(1.57	)
-200 bp			21,339				(1,430	)			(6.28	)

		December 31, 2005
		Net Interest Income
		Amount				Change				Change
		(Dollars in thousands)
+200 bp		$	23,043			$	959				4.34	%
+100 bp			22,629				545				2.47
Base			22,084				—				—
-100 bp			21,314				(770	)			(3.49	)
-200 bp			19,744				(2,340	)			(10.59	)

	Financial Condition

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			2006								2005
			Jun 30,				Mar 31,				Dec 31,				Sept 30,				Jun 30,
Non-accrual loans			$	2,289			$	2,785			$	3,082			$	2,397			$	3,217
Loans 90 days past due and still accruing interest				517				567				922				1,329				618
	Total nonperforming loans			2,806				3,352				4,004				3,726				3,835
Other real estate owned				1,390				536				203				194				669
	Total nonperforming assets		$	4.196			$	3,888			$	4,207			$	3,920			$	4,504
Nonperforming loans to total end of period loans				0.70	%			0.82	%			0.96	%			0.92	%			0.95	%
Nonperforming assets to total end of period loans				1.04				0.96				1.01				0.97				1.11
Nonperforming assets to total end of period assets				0.64				0.59				0.62				0.59				0.68

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	Liquidity

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	Contractual Obligations, Commitments, Contingencies, and Off-Balance Sheet Financial Instruments

			Payments Due by Period
			Within												After
Contractual Obligations			1 Year				1-3 Years				4-5 Years				5 Years				Total
Short-term debt			$	8,824			$	—			$	—			$	—			$	8,824
Long-term debt				—				224				—				—				224
Certificates of Deposit				233,681				70,547				618				2,526				307,372
Series B Mandatory redeemable Preferred stock				—				831				—				—				831
FHLB Advances				10,100				20,400				16,200				—				46,700
	Total contractual cash obligations		$	252,605			$	92,002			$	16,818			$	2,526			$	363,951

			Amount of Commitment Expiration per Period
			Within												After
Off-Balance Sheet Financial Instruments			1 Year				1-3 Years				4-5 Years				5 Years				Total
Lines of credit			$	89,058			$	4,130			$	1,287			$	16,714			$	111,189
Standby letters of credit				7,764				792				—				—				8,556
	Total commercial commitments		$	96,822			$	4,922			$	1,287			$	16,714			$	119,745

	Capital Resources

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							December 31,								Minimum				Well
			June 30,												Capital				Capitalized
			2006				2005				2004				Ratios				Ratios
Tier 1 risk-based capital			$	61,130			$	60,546			$	63,347
Tier 2 risk-based capital				6,144				6,266				6,067
Total capital				67,274				66,812				69,414
Risk-weighted assets				491,503				501,342				485,325
Capital ratios
	Tier 1 risk-based capital			12.4	%			12.1	%			13.0	%			4.00	%			6.00	%
	Tier 2 risk-based capital			13.7				13.3				14.3				8.00				10.00
	Leverage ratio			9.4				9.0				9.5				4.00				5.00

	Impact of Inflation, Changing Prices, and Monetary Policies

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	Recent Regulatory and Accounting Developments

	Legal Proceedings

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			Amount and
			Nature of
			Beneficial				Percent
Name of Individual or Number of Individuals in Group			Ownership(1)(2)				of Class
5% Stockholders
UnionBank, as Trustee for the				310,020	(3)			8.2	%
	UnionBancorp, Inc. Employee Stock Ownership Plan (“ESOP”)
Wayne W. Whalen				851,951	(4)			22.1	%
	333 W. Wacker Drive, Suite 2100
	Chicago, Illinois 60606
Jeffrey L. Gendell				371,300	(5)			9.9	%
	55 Railroad Avenue, 1st Floor
	Greenwich, Connecticut 06830
Directors
Richard J. Berry				45,779	(6)			1.2	%
Walter E. Breipohl				34,079				*
Robert J. Doty				16,734				*
Dennis J. McDonnell				662,908	(7)			17.2	%
I.J. Reinhardt, Jr.				28,050	(8)			*
John A. Shinkle				20,790	(9)			*
Scott C. Sullivan				26,718	(10)			*
John A. Trainor				38,214	(11)			1.0	%
Scott A. Yeoman				3,300				*
Other Named Executive Officers
Robert L. Davidson				5,733	(12)			*
Kurt R. Stevenson				14,826	(13)			*
All directors and executive officers as a group (11 persons)				897,131	(14)			23.3	%

	*	Indicates less than one percent.

	(1)	The information contained in this column is based upon information furnished to us by the persons named above and the members of the designated group. Amounts reported include shares held directly as well as shares which are held in retirement accounts and shares held by members of the named individuals’ families or held by trusts of which the named individual is a trustee or substantial beneficiary, with respect to which shares the respective individual may be deemed to have sole or shared voting and/or investment power. The nature of beneficial ownership for shares shown in this column is

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		sole voting and investment power, except as set forth in the footnotes below. Inclusion of shares shall not constitute an admission of beneficial ownership or voting and investment power over included shares.
	(2)	Amounts shown include shares obtainable as of [                    ], 2006 (or obtainable within 60 days of [                    ], 2006) through the exercise of options to purchase shares of common stock granted under UnionBancorp’s stock option plans as follows: Mr. Berry — 16,250 shares; Mr. Breipohl — 16,250 shares; Mr. Doty — 13,750 shares; Mr. McDonnell — 9,750 shares; Mr. Reinhardt — 15,750 shares; Mr. Shinkle — 13,750 shares; Mr. Sullivan — 13,750 shares; Mr. Trainor — 15,750 shares; Mr. Davidson — 100 shares; and Mr. Stevenson — 8,118 shares. Option holders have the sole power to exercise their respective options and would also be entitled to exercise sole voting and investment power over the shares issued upon the exercise of such options.
	(3)	All of the shares held by the employee stock ownership plan are allocated to particular participants’ accounts and the employee stock ownership plan trustee has shared voting and no investment power over such shares.
	(4)	Includes shares held by Mr. Whalen’s wife, Paula Wolff, Mr. Whalen’s children, the WPW Family Foundation and WPW Associates, L.P., a family limited partnership, with shared voting and investment power over such shares. The amount above also includes approximately 86,070 shares which are issuable upon the conversion of 1,381 shares of UnionBancorp, Inc. convertible preferred stock held by Mr. Whalen.
	(5)	Jeffrey L. Gendell (“Gendell”) filed a Schedule 13G/ A dated February 14, 2006 reporting that as of December 31, 2005 Gendell, along with certain affiliates (Tontine Financial Partners, L.P. and Tontine Management, L.L.C.), collectively beneficially owned 371,300 shares of common stock, with sole voting and investment power over such shares. Gendell is located at 55 Railroad Avenue, 1st Floor, Greenwich, Connecticut 06830.
	(6)	Includes 11,100 shares held in trusts for which Mr. Berry is a co-trustee, over which shares Mr. Berry has shared voting and investment power.
	(7)	Includes shares held jointly by Mr. McDonnell and his wife over which voting and dispositive power is shared. Also includes shares held in trust for which Mr. McDonnell is trustee. The amount above also includes approximately 86,070 shares which are issuable upon the conversion of 1,381 shares of UnionBancorp, Inc. convertible preferred stock held by Mr. McDonnell. Mr. McDonnell’s address is 815 Jackson Avenue, River Forest, Illinois 60305.
	(8)	Includes 6,000 shares held by Mr. Reinhardt jointly with his spouse, over which shares Mr. Reinhardt has shared voting and investment power.
	(9)	Includes 400 shares held by members of Mr. Shinkle’s family. Mr. Shinkle has no voting or investment power over 100 of such shares and has shared voting and investment power over the remaining 300 shares. Also includes 4,061 shares held in trust for which Mr. Shinkle serves as trustee. Mr. Shinkle also has voting and investment power over 1,500 shares held in an investment club.

(10)	Includes 1,687 shares held by Mr. Sullivan jointly with his spouse and 1,000 shares held by members of Mr. Sullivan’s family, over which shares Mr. Sullivan has shared voting and investment power.
(11)	Includes 8,515 shares held solely by Mr. Trainor’s spouse, over which shares Mr. Trainor has no voting or investment power.
(12)	Includes 2,633 shares allocated to Mr. Davidson under the employee stock ownership plan.
(13)	Includes 425 shares held by Mr. Stevenson jointly with his spouse, over which shares Mr. Stevenson has shared voting and investment power. Also includes 593 shares held by Mr. Stevenson in his 401(k) plan and 5,690 shares allocated to Mr. Stevenson under the employee stock ownership plan.
(14)	Footnotes (2) and (6) through (13) are incorporated herein.

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			Annual Compensation																Long Term Compensation
																			Awards								Payouts
																							Securities
															Other				Restricted				Underlying
Name and															Annual				Stock				Options/				LTIP				All Other
Principal											Bonus				Compensation				Award(s)				SARs				Payouts				Compensation
Position			Year				Salary ($)				($)				($)(4)				($)				(#)(1)				($)				($)
Scott A. Yeoman(2)				2005			$	120,859			$	44,000				—				—				10,000				—			$	351(2	)
	President and Chief Executive Officer
Kurt R. Stevenson(3)				2005			$	144,500			$	28,900				—				—				5,000				—			$	10,749(3	)
	Senior Executive			2004			$	137,500			$	22,688				—				—				—				—			$	9,235(3	)
	Vice President and			2003			$	110,000			$	16,500				—				—				—				—			$	6,040(3	)
	Chief Financial Officer

(1)	All options vest 50% in the 4th and 5th years on or about the anniversary of the date of grant.
(2)	UnionBancorp was not required to disclose Mr. Yeoman’s salary information with respect to his compensation prior to 2005.
(3)	Represents the dollar value of allocations under our employee stock ownership plan in the amount of $3,836 for 2005, $4,409 for 2004 and $2,354 for 2003, premiums for split dollar life insurance of $225 for 2005, $206 for 2004 and $155 for 2003 and $6,687 of 401(k) employer contributions for 2005, $4,620 for 2004 and $3,531 for 2003.
(4)	Perquisites that do not exceed the lower of $50,000 or 10% of salary and bonus in the aggregate in any year for a named executive officer are not disclosed in the table in accordance with Securities and Exchange Commission rules.

Individual Grants
																		Potential Realizable
																		Value at Assumed Annual
																		Rates of Stock Price
																		Appreciation for Option
																		Term
(a)		(b)				(c)				(d)				(e)				(f)				(g)
						% of Total
						Options
		Options				Granted to				Exercise or
		Granted				Employees in				Base Price				Expiration
Name		(#)(1)				Fiscal Year				($/Sh)				Date				5% ($)				10% ($)
Scott A. Yeoman			10,000	(2)			33	%		$	20.30				06/16/15			$	127,666			$	323,530
Kurt R. Stevenson			5,000	(2)			17	%		$	20.30				06/16/15			$	63,833			$	161,765

(1)	All options vest 50% in the 4th and 5th years on or about the anniversary of the date of grant.
(2)	Represents qualified options granted on June 16, 2005.

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										Number of Securities								Value of Unexercised
		Shares								Underlying Unexercised								In-the- Money
		Acquired on								Options at FY-End (#)								Options at FY-End ($)(1)
		Exercise				Value
Name (#)		(#)				Realized($)				Exercisable				Unexercisable				Exercisable				Unexercisable
Scott A. Yeoman			—				—				—				10,000			$	—			$	10,000
Kurt R. Stevenson			—				—				6,944				7,718			$	51,315			$	24,824

(1)	The dollar amounts under these columns are the result of theoretical calculations at 5% and 10% rates under applicable Securities and Exchange Commission rules and, therefore, are not intended to forecast possible future appreciation, if any, in the common stock.

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Year

Owned or

Location

Opened(1)

Leased

Lease Expiration Date

Main Office

310 S. Schuyler Avenue

1958

Owned

N/A

Kankakee, Illinois

Full Service Branches

Main Street and U.S. 45

1977

Owned

N/A

Ashkum, Illinois

101 S. Page Street

2003

Owned

N/A

Aviston, Illinois

680 S. Main Street

1974

Owned

N/A

Bourbonnais, Illinois

980 N. Kinzie Avenue

1998

Owned

N/A

Bradley, Illinois

180 N. Front Street

1998

Leased

July 24, 2010

Braidwood, Illinois

1001 S. Neil Street

1992

Owned

N/A

Champaign, Illinois

100 S. Broadway

1998

Leased

July 24, 2010

Coal City, Illinois

660 S. Broadway

1998

Owned

N/A

Coal City, Illinois

1275 E. Division Street

1998

Owned

N/A

Diamond, Illinois

317 W. Waupansie Street

2003

Leased

November 30, 2009

Dwight, Illinois

302 W. Mazon Avenue

1987

Owned

N/A

Dwight, Illinois

1300 N. Keller Dive

2005

Owned

N/A

Effingham, Illinois

303 Fountains Parkway

2005

Owned

N/A

Fairview Heights, Illinois

654 N. Park Road

1998

Owned

N/A

Herscher, Illinois

310 Section Line Road

1975

Owned

N/A

Manteno, Illinois

29 N. Dixie Highway

2004

Owned

N/A

Momence, Illinois

122 Gladiolus Ave

2004

Owned

N/A

Momence, Illinois

18001 Main Street

2003

Owned

N/A

St. Rose, Illinois

1708 S. Philo Road

1998

Owned

N/A

Urbana, Illinois

Loan Production Office

24001 West Lockport Suite A

2005

Leased

September 30, 2011(2

)

Plainfield, Illinois

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(1)	Year opened refers to the year in which the current facility opened or was acquired.
(2)	Centrue Financial has the option to cancel this lease on September 30, 2008.

	Comparison of Operating Results for the Years Ended December 31, 2005, 2004, and 2003

	Overview

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	Mission and Goals

	•	increase return on equity and increase stockholders’ value;
	•	maintain Centrue Bank’s capital at a level that exceeds regulatory requirements;
	•	attain a high level of asset quality;
	•	manage Centrue Financial’s exposure to changes in market interest rates;
	•	maximize Centrue Financial’s net interest margin; and
	•	to the extent available, take advantage of loan and deposit growth opportunities in Centrue Financial’s principal market areas.

	•	management of Centrue Financial’s capital to enhance stockholders’ value;
	•	employment of experienced and dedicated officers and employees;
	•	enhancement of controls over asset quality by employment of a chief credit officer and credit administration staff;
	•	installation of an incentive compensation program for every employee based upon attainment of Company and individual objectives;
	•	implementation of a sales management process to deepen existing customer relationships and to attract new customers from within our markets;
	•	investment in new technology and item processing services to improve delivery of services to customers;
	•	establishment of regional banking centers with a local regional president;
	•	expansion of Centrue Financial’s geographic presence through strategic acquisitions and de novo branches;
	•	the origination of commercial real estate, consumer, commercial business, and, multi-family and construction loans;

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	•	forming strategic alliances for ancillary banking services such as trust, brokerage and credit card services designed to enhance product offerings for customers while increasing efficiency;
	•	providing high quality service to enhance customer loyalty; and
	•	offering a variety of financial products and services to serve as comprehensively as practicable the financial needs of families and community businesses in its market areas.

	Critical Accounting Policies

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	Economic Climate

	Results of Operations

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			Year Ended December 31, 2005												Year Ended December 31, 2004												Year Ended December 31, 2003
			Average				Interest								Average				Interest								Average				Interest
			Outstanding				Earned/				Yield/				Outstanding				Earned/				Yield/				Outstanding				Earned/				Yield/
			Balance				Paid				Rate				Balance				Paid				Rate				Balance				Paid				Rate
			(Dollars in thousands)
Interest-earning assets:
	Loans receivable(1)		$	434,367			$	26,857				6.18	%		$	433,406			$	24,955				5.76	%		$	366,305			$	23,523				6.42	%
	Investment securities(2)			123,863				5,240				4.23	%			108,825				4,424				4.07	%			75,088				3,554				4.73	%
	Other interest-earning assets			7,340				198				2.70	%			12,037				119				0.99	%			49,296				313				0.63	%
	FHLB stock			4,181				177				4.23	%			3,462				214				6.18	%			2,929				195				6.66	%
Total interest-earning assets				569,751				32,472				5.70	%			557,730				29,712				5.33	%			493,618				27,585				5.59	%
Other assets				62,318												52,308												45,080
Total assets			$	632,069											$	610,038											$	538,698
Interest-bearing liabilities:
	Time deposits		$	253,847				7,499				2.95	%		$	261,473				6,467				2.47	%		$	243,629				7,564				3.10	%
	Savings deposits			94,206				644				0.68	%			90,580				560				0.62	%			78,450				860				1.10	%
	Interest Bearing Demand deposits			93,934				1,321				1.41	%			92,698				780				0.84	%			83,001				792				0.95	%
	Total interest bearing deposits			441,987				9,464				2.14	%			444,751				7,807				1.76	%			405,080				9,216				2.28	%
	Borrowings			79,820				3,600				4.51	%			63,991				2,843				4.44	%			62,115				2,780				4.48	%
Total interest-bearing liabilities				521,807				13,064				2.50	%			508,742				10,650				2.09	%			467,195				11,996				2.57	%
Non-interest bearing demand deposits				62,785												52,654												33,719
Other liabilities				3,448												4,039												3,700
Total liabilities				588,040												565,435												504,614
Stockholders’ equity				44,029												44,603												34,084
Total liabilities and stockholders’ equity			$	632,069											$	610,038											$	538,698
Net interest income							$	19,408											$	19,062											$	15,589
Net interest rate spread												3.20	%											3.24	%											3.02	%
Net earning assets			$	47,944											$	48,988											$	26,424
Net yield on average interest-earning assets (net interest margin)												3.41	%											3.42	%											3.16	%
Average interest-earning assets to average interest-bearing liabilities								109.19	%											109.63	%											105.66	%

(1)	Calculated on a tax-equivalent basis assuming a 35% tax rate, including loans held for sale, and net of deferred loan fees, loan discounts, loans in process and the allowance for loan losses. Includes net loan fees of $447, $276, and $142 for 2005, 2004, and 2003, respectively.
(2)	Calculated on a tax-equivalent basis assuming a 35% tax rate.

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				Year Ended December 31,												Year Ended December 31,
				2005 vs. 2004												2004 vs. 2003
				Increase (Decrease)												Increase (Decrease)
				Due to								Total				Due to								Total
												Increase												Increase
				Volume				Rate				(Decrease)				Volume				Rate				(Decrease)
				(Dollars in thousands)
Interest earning assets:
	Loans receivable			$	30			$	1,872			$	1,902			$	4,024			$	(2,595	)		$	1,429
	Investment securities				631				185				816				1,425				(555	)			870
	Other interest-earning assets				(38	)			117				79				(315	)			124				(191	)
	Federal Home Loan Bank stock				39				(76	)			(37	)			33				(14	)			19
		Total interest-earning assets		$	662			$	2,098			$	2,760			$	5,167			$	(3,040	)		$	2,127
Interest bearing liabilities:
	Certificate accounts			$	(194	)		$	1,226			$	1,032			$	530			$	(1,627	)		$	(1,097	)
	Savings deposits				23				61				84				118				(418	)			(300	)
	Interest Bearing Deposits				9				532				541				87				(99	)			(12	)
	Borrowings				678				79				757				83				(20	)			63
		Total interest-bearing liabilities		$	516			$	1,898			$	2,414			$	818			$	(2,164	)		$	(1,346	)
Net interest income												$	346											$	3,473

	Comparison of Operating Results for 2005 to 2004

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		December 31,
		2005				2004
		(Dollars in thousands)
Total loans		$	441,327			$	424,854
Total assets			641,523				611,983
Allowance for loan losses			4,486				5,475
Net loan charge-offs			1,895				3,352
Nonperforming loans			3,823				6,991
Nonperforming assets			5,532				10,035
Net loan charge-offs as a percentage of average loans			0.44	%			0.77	%
Nonperforming assets to total assets			0.86	%			1.64	%
Allowance for loan losses to gross loans			1.02	%			1.29	%
Allowance for loan losses to nonperforming loans			117.34	%			78.31	%

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	Comparison of Operating Results for 2004 to 2003

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	Lending Activities

				December 31,
				2005								2004								2003								2002								2001
				Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent
				(Dollars in thousands)
Real Estate Loans:
	One-to-four family			$	170,803				38.68	%		$	175,640				41.32	%		$	212,578				48.97	%		$	228,623				58.39	%		$	247,435				62.20	%
	Multi-family				8,274				1.88				15,655				3.68				16,461				3.79				13,672				3.49				11,983				3.01
	Commercial				131,365				29.75				101,516				23.88				77,142				17.77				56,589				14.45				48,543				12.20
	Construction and Development				34,274				7.76				28,731				6.76				26,173				6.03				20,243				5.17				19,884				5.00
	Total real estate loans				344,716				78.07				321,542				75.64				332,354				76.56				319,127				81.50				327,845				82.41
	Commercial loans				57,864				13.10				61,090				14.37				58,235				13.42				33,301				8.51				31,255				7.86
Consumer Loans:
	Home equity				30,138				6.83				28,188				6.63				24,305				5.60				22,560				5.76				18,407				4.63
	All other consumer				8,853				2.00				14,303				3.36				19,185				4.42				16,558				4.23				20,288				5.10
	Total consumer loans				38,991				8.83				42,491				9.99				43,490				10.02				39,118				9.99				38,695				9.73
	Total loans				441,571				100.00	%			425,123				100.00	%			434,079				100.00	%			391,546				100.00	%			397,795				100.00	%
Less:
	Deferred fees and discounts				244								269								565								505								470
	Allowance for loan losses				4,486								5,475								7,471								6,524								2,582
		Total loans, net		$	436,841							$	419,379							$	426,043							$	384,517							$	394,743

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	Investment Activities

			At December 31, 2005
			Less Than								1 to								5 to								Over
			1 Year								5 Years								10 Years								10 Years								Total
			Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield				Amount				Yield
			(Dollars in thousands)
Securities available for sale
U.S. Treasury and government agency securities			$	2,563				4.17	%		$	75,362				4.17	%		$	—				—	%		$	—				—	%		$	77,925				4.17	%
Municipal bonds				1,015				3.63				6,079				3.30				16,399				3.17				—				—				23,493				3.18
Corporate bonds				—				—				2,060				4.26				—				—				—				—				2,060				4.26
Mortgage backed securities				63				8.00				3,147				4.21				1,349				4.96				14,653				5.42				19,212				5.15
Mutual funds and equity securities				779				4.62				—				—				—				—				—				—				779				4.62
Other securities				—				—				—				—				—				—				4,250				5.34				4,250				5.34
	Total		$	4,420				3.77	%		$	86,648				4.11	%		$	17,748				3.17	%		$	18,903				5.19	%		$	127,719				4.18	%

	Deposits

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			December 31, 2005								December 31, 2004
			Amount				Percent				Amount				Percent
			(Dollars in thousands)
Noninterest bearing demand deposits			$	67,982				13.38	%		$	53,919				10.88	%
Interest bearing demand deposits				41,081				8.09				48,495				9.78
Savings and money market deposits				143,922				28.34				134,876				27.20
Time deposits $100,000 or more				73,017				14.37				61,274				12.36
Time deposits less than $100,000				181,914				35.82				197,213				39.78
	Total deposits		$	507,916				100.00	%		$	495,777				100.00	%

	Borrowings

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	Asset Quality

		December 31,
		2005				2004				2003				2002				2001
		(Dollars in thousands)
Non-accrual loans		$	3,823			$	6,769			$	3,248			$	6,834			$	730
Loans past due 90 days and still accruing			—				222				2,232				3,439				391
Real estate held for sale			1,709				3,002				319				316				469
Troubled debt restructurings			35				42				281				480				611
Total nonperforming		$	5,567			$	10,035			$	6,080			$	11,069			$	2,201
Interest income recognized on non-accrual loans and troubled debt restructurings			—				—			$	199			$	70				—
Foregone interest on non-accrual loans		$	341			$	520			$	525			$	387			$	33

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			Year Ended December 31,
			2005				2004				2003				2002				2001
			(Dollars in thousands)
Balance at beginning of period			$	5,475			$	7,471			$	6,524			$	2,582			$	2,156
Charge-offs:
	One-to-four family			158				—				—				2				—
	Commercial real estate			143				1,333				1,134				—				28
	Consumer			1,028				235				144				79				61
	Commercial business			1,388				2,079				4,964				—				14
				2,717				3,647				6,242				81				103
Recoveries:
	One-to-four family			8				14
	Commercial real estate			451				110				583				—				1
	Consumer			97				16				46				22				24
	Commercial business			266				155				3				11				1
				822				295				632				33				26
Net charge-offs				(1,895	)			(3,352	)			(5,610	)			(48	)			(77	)
Additions charged to operations				651				1,200				4,122				3,990				503
Additions through acquisitions				255				156				2,435				—				—
Balance at end of period			$	4,486			$	5,475			$	7,471			$	6,524			$	2,582
Ratio of net charge-offs during the period to average loans outstanding during the period				0.44	%			0.77	%			1.53	%			0.01	%			0.02	%
Ratio of net charge-offs during the period to average non-performing assets				41.52	%			31.63	%			110.06	%			0.75	%			3.07	%

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		December 31,
		2005								2004								2003								2002								2001
						Percent of								Percent of								Percent of								Percent of								Percent of
						Each								Each								Each								Each								Each
						Category to								Category to								Category to								Category to								Category to
						Total								Total								Total								Total								Total
		Amount				Loans				Amount				Loans				Amount				Loans				Amount				Loans				Amount				Loans
		(Dollars in thousands)
One-to-four family		$	711				38.68	%		$	581				41.32	%		$	1,012				48.97	%		$	224				58.39	%		$	157				62.20	%
Multi-family			220				1.88				76				3.68				197				3.79				7				3.49				6				3.01
Commercial real estate			1,139				29.75				1,877				23.88				2,455				17.77				3,212				14.45				933				12.20
Construction and development			728				7.76				284				6.76				1,673				6.03				1,403				5.17				532				5.00
Commercial			1,269				13.10				2,194				14.37				1,454				13.42				1,434				8.51				729				7.86
Consumer			310				8.83				348				9.99				336				10.02				244				9.99				225				9.73
Unallocated			109				—				114				—				344				—				—				—				—				—
Total		$	4,486				100.00	%		$	5,474				100.00	%		$	7,471				100.00	%		$	6,524				100.00	%		$	2,582				100.00	%

	Asset/ Liability Management

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			Maturing or Repricing
			1-3				4 Months				Over 1-3				Over 3-5				Over 5
			Months				to One Year				Years				Years				Years				Total
			Amount				Amount				Amount				Amount				Amount				Amount
Fixed rate one-to-four family (including commercial real estate and construction loans)			$	7,911			$	9,750			$	29,055			$	39,915			$	122,192			$	208,823
Adjustable rate one-to-four family (including commercial real estate and construction loans)				34,020				24,074				28,756				8,893				5,876				101,619
Construction & Development				28,269				1,079				1,107				1,590				2,229				34,274
Commercial business loans				20,194				8,898				12,135				8,801				7,836				57,864
Consumer loans				24,510				2,080				4,557				7,268				576				38,991
Investment securities and other				14,427				3,829				37,218				44,703				25,013				125,190
Federal Funds Sold, interest bearing due from banks, money market funds, and certificates of deposit				4,692				50				—				—				—				4,742
	Total interest-earning assets			134,023				49,760				112,828				111,170				163,722				571,503

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			Maturing or Repricing
			1-3				4 Months				Over 1-3				Over 3-5				Over 5
			Months				to One Year				Years				Years				Years				Total
			Amount				Amount				Amount				Amount				Amount				Amount
Savings deposits				17,627				17,627				17,627				17,627				17,626				88,134
Now and money market				8,216				36,110				36,110				8,216				8,217				96,869
Certificates under $100,000				39,485				69,290				64,180				8,959				—				181,914
Certificates of $100,000 or more				34,533				24,834				11,779				1,871				—				73,017
Borrowings				47,314				17,000				7,500				—				3,223				75,037
	Total interest-bearing liabilities			147,175				164,861				137,196				36,673				29,066				514,971
Interest-earning assets less interest-bearing liabilities			$	(13,152	)		$	(115,101	)		$	(24,368	)		$	74,497			$	134,656			$	56,532
Cumulative interest-rate sensitivity gap			$	(13,152	)		$	(128,253	)		$	(152,621	)		$	(78,124	)		$	56,532
Cumulative interest-rate gap as a percentage of assets				(2.05	)%			(20.00	)%			(23.80	)%			(12.18	)%			8.81	%

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		EVE Ratios
Changes in Interest Rates		2005				2004
300 basis point rise			7.60	%			7.54	%
200 basis point rise			7.43	%			7.88	%
100 basis point rise			7.33	%			8.06	%
Base rate scenario			6.86	%			7.91	%
100 basis point decline			5.24	%			6.60	%

	Liquidity and Capital Resources

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		Time				Long-Term
Years Ended December 31,		Deposits				Borrowings(1)				Total
2006		$	167,991			$	16,341			$	184,332
2007			61,937				31,449				93,386
2008			14,172				156				14,328
2009			5,101				10,165				15,266
2010			5,730				174				5,904
thereafter			—				438				438
Total		$	254,931			$	58,723			$	313,654
Financial instruments whose contract amounts represent credit risk:
Commitment to originate loans										$	3,787
Commitments to extend credit											56,873
Standby letters of credit											4,508
Total										$	378,822

(1)	Fixed rate callable borrowings are included in the period of their modified duration rather than in the period in which they are due. Borrowings include fixed rate callable advances of $5 million and $2 million maturing in 2008 and 2011 which are callable in 2006. Trust preferred debentures of $10 million mature in both 2032 and 2034, but are callable in 2007 and 2009.

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	Dividends

	Comparison of Operating Results for the Three and Six Months Periods Ended June 30, 2006 and 2005.

	Financial Condition

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	Asset Quality

		June 30				December 31
		2006				2005				Change
		(Dollars in thousands)
Non-accruing loans		$	3,048			$	3,823			$	(775	)
Accruing loans delinquent 90 days or more			—				—				—
Total nonperforming loans			3,048				3,823				(775	)
Foreclosed assets			38				1,709				(1,671	)
Troubled debt restructuring			44				35				(2	)
Total nonperforming assets		$	3,130			$	5,567			$	(2,448	)
Allowance for loan losses to total loans			.97	%			1.02	%
Allowance for loan losses to nonperforming loans			140.88	%			117.33	%
Nonperforming loans to total loans			.69	%			0.88	%
Nonperforming assets to total loans and foreclosed property			.71	%			1.28	%
Nonperforming assets to total assets			.49	%			0.87	%

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	Critical Accounting Policies

	Results of Operations

	Second Quarter and Six Months Ended June 30, 2006 and 2005

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			Three Months Ended June 30,
			2006												2005
			Average				Interest								Average				Interest
			Outstanding				Earned/				Yield/				Outstanding				Earned/				Yield/
			Balance				Paid				Rate				Balance				Paid				Rate
			(Dollars in thousands)
Interest-earning assets:
	Loans receivable(1)(3)		$	435,355			$	7,239				6.67	%		$	441,340			$	6,703				6.09	%
	Investments securities(2)(3)			121,969				1,344				4.42	%			123,754				1,297				4.20	%
	Other interest-earning assets			2,677				8				1.10	%			3,641				15				1.65	%
	FHLB stock			4,445				37				3.37	%			4,322				56				5.20	%
Total interest-earning assets				564,446				8,628				6.13	%			573,057				8,071				5.65	%
Other assets				62,890												64,184
Total assets			$	627,336											$	637,241
Interest-bearing liabilities:
	Certificate accounts		$	225,987			$	2,007				3.56	%		$	246,650			$	1,728				2.81	%
	Savings deposits			81,738				136				0.67	%			101,424				182				0.72	%
	Demand and NOW deposits			103,467				628				2.43	%			89,597				263				1.18	%
	Borrowings			102,374				1,417				5.53	%			86,009				917				4.28	%
Total interest-bearing liabilities				513,566				4,188				3.27	%			523,680				3,090				2.37	%
Non-interest bearing demand deposits				66,777												65,453
Other liabilities				4,000												5,258
Total liabilities				584,343												594,391
Stockholders’ equity				42,993												42,850
Total liabilities and stockholders’ equity			$	627,336											$	637,241
Net interest income(3)							$	4,440											$	4,981
Net interest rate spread												2.86	%											3.28	%
Net earning assets			$	50,880											$	49,377
Net yield on average interest-earning assets (net interest margin)												3.15	%											3.49	%
Average interest-earning assets to average interest-bearing liabilities								109.91	%											109.43	%

(1)	Calculated including loans held for sale, and net of deferred loan fees, loan discounts, loans in process and the allowance for loan losses.
(2)	Calculated including investment securities available-for-sale and certificates of deposit.
(3)	Presented on a fully tax-equivalent basis, assuming a combined Federal and State tax rate of 38.7%.

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			Six Months Ended June 30
			2006												2005
			Average				Interest								Average				Interest
			Outstanding				Earned/				Yield/				Outstanding				Earned/				Yield/
			Balance				Paid				Rate				Balance				Paid				Rate
			(Dollars in thousands)
Interest-earning assets:
	Loans receivable(1)(3)		$	436,646			$	14,353				6.63	%		$	430,025			$	12,908				6.05	%
	Investments securities(2)(3)			122,806				2,700				4.43	%			121,271				2,534				4.21	%
	Other interest-earning assets			2,540				15				1.19	%			3,009				23				1.54	%
	FHLB stock			4,442				76				3.45	%			3,969				105				5.34	%
Total interest-earning assets				566,434				17,144				6.10	%			558,274				15,570				5.62	%
Other assets				63,534												60,995
Total assets			$	629,968											$	619,269
Interest-bearing liabilities:
	Certificate accounts		$	236,917			$	4,105				3.49	%		$	245,209			$	3,304				2.72	%
	Savings deposits			83,334				276				0.67	%			95,107				315				0.67	%
	Demand and NOW deposits			101,947				1,162				2.30	%			89,040				481				1.09	%
	Borrowings			93,821				2,369				5.09	%			81,013				1,714				4.27	%
Total interest-bearing liabilities				516,019				7,912				3.09	%			510,369				5,814				2.30	%
Non-interest bearing demand deposits				66,788												61,756
Other liabilities				4,246												3,856
Total liabilities				587,053												575,981
Stockholders’ equity				42,915												43,288
Total liabilities and stockholders’ equity			$	629,968											$	619,269
Net interest income(3)							$	9,232											$	9,756
Net interest rate spread												3.01	%											3.32	%
Net earning assets			$	50,415											$	47,905
Net yield on average interest-earning assets (net interest margin)												3.29	%											3.52	%
Average interest-earning assets to average interest-bearing liabilities								109.77	%											109.39	%

(1)	Calculated including loans held for sale, and net of deferred loan fees, loan discounts, loans in process and the allowance for loan losses.
(2)	Calculated including investment securities available-for-sale and certificates of deposit.
(3)	Presented on a fully tax-equivalent basis, assuming a combined Federal and State tax rate of 38.7%.

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					Three Months
					Ended
					June 30								Change
					2006				2005				Amount				Percent
					(Dollars in thousands)
Noninterest income:
	Fee income				$	1,632			$	1,330			$	302				22.7	%
			Net gain (loss) on sale of real estate held for sale			181				(8	)			189				n/m
	Net gain on sale of loans					324				158				166				105.1
			Increase in cash surrender value of life insurance contracts			90				87				3				3.4
	Other					100				140				(40	)			(28.6	)
		Total			$	2,327			$	1,707			$	620				36.3	%

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		Three Months
		Ended
		June 30								Change
		2006				2005				Amount				Percent
		(Dollars in thousands)
Noninterest expense:
Compensation and benefits		$	2,736			$	2,688			$	48				1.8	%
Occupancy, net			483				391				92				23.5
Furniture and equipment			262				803				(541	)			(67.4	)
Advertising			110				80				30				37.5
Data processing			462				160				302				188.8
Telephone and postage			220				153				67				43.8
Amortization of Intangibles			71				72				(1	)			(1.4	)
Legal and professional fees			191				319				(128	)			(40.1	)
Other			773				791				(18	)			(2.3	)
Total		$	5,308			$	5,457			$	(149	)			(2.7	)%

				Six Months
				Ended
				June 30								Change
				2006				2005				Amount				Percent
				(Dollars in Thousands)
Noninterest income:
	Fee income			$	2,799			$	2,429			$	370				15.2	%
	Net gain on sale of securities				4				183				(179	)			(97.8	)
	Net gain (loss) on sale of real estate held for sale				157				(6	)			163				n/m
	Net gain on sale of loans				431				289				142				49.1
	Increase in cash surrender value of life insurance contracts				182				178				4				2.2
	Other				397				198				199				100.5
		Total		$	3,970			$	3,271			$	699				21.4	%

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				Six Months
				Ended
				June 30								Change
				2006				2005				Amount				Percent
				(Dollars in thousands)
Noninterest expense:
	Compensation and benefits			$	5,868			$	5,024			$	844				16.8	%
	Occupancy, net				946				778				168				21.6
	Furniture and equipment				544				1,133				(589	)			(52.0	)
	Advertising				200				160				40				25.0
	Data processing				806				318				488				153.5
	Telephone and postage				372				324				48				14.8
	Amortization of Intangibles				143				133				10				7.5
	Legal and professional fees				353				461				(108	)			(23.4	)
	Other				1,436				1,450				(14	)			(1.0	)
		Total		$	10,668			$	9,781			$	887				9.1	%

	Capital Resources

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																			To Be Well
											For Capital								Capitalized Under
											Adequacy								Prompt Corrective
			Actual								Purposes								Action Provisions
			Amount				Ratio				Amount				Ratio				Amount				Ratio
			(Dollars in thousands)
As of June 30, 2006:
Tier 1 Capital to Average Assets
	Centrue Financial			45,001				7.37	%			24,411				4.00	%			N/A
	Centrue Bank			45,291				7.49	%			24,196				4.00	%			30,245				5.00	%
Tier I Capital to Risk Weighted Assets
	Centrue Financial			45,001				10.64	%			16,919				4.00	%			N/A
	Centrue Bank			45,291				10.85	%			16,703				4.00	%			25,055				6.00	%
Total Capital to Risk Weighted Assets
	Centrue Financial			54,010				12.77	%			33,837				8.00	%			N/A
	Centrue Bank			49,585				11.87	%			33,406				8.00	%			41,758				10.00	%
As of December 31, 2005:
Tier 1 Capital to Average Assets
	Centrue Financial			43,261				6.93	%			24,967				4.00	%			N/A
	Centrue Bank			43,773				7.08	%			24,733				4.00	%			30,917				5.00	%
Tier I Capital to Risk Weighted Assets
	Centrue Financial			43,261				10.25	%			16,796				4.00	%			N/A
	Centrue Bank			43,773				10.49	%			16,696				4.00	%			25,044				6.00	%
Total Capital to Risk Weighted Assets
	Centrue Financial			52,882				12.53	%			33,593				8.00	%			N/A
	Centrue Bank			48,259				11.56	%			33,391				8.00	%			41,739				10.00	%

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		EVE Ratios
		June 30,				December 31,
Changes in Interest Rates		2006				2005
300 basis point rise			7.92%				7.60%
200 basis point rise			8.07%				7.43%
100 basis point rise			7.99%				7.33%
Base rate scenario			7.41%				6.86%
100 basis point decline			6.04%				5.24%
200 basis point decline			4.48%				3.60%

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	•	those persons or entities known by us to beneficially own more than five percent of our common stock;
	•	each director, nominee and each executive officer named in the summary compensation table; and
	•	all directors and executive officers as a group.

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			Shares
			Beneficially				Percent of
Beneficial Owner			Owned(1)				Class
5% Stockholders
Private Capital Management(2)				230,319				10.3	%
	8889 Pelican Bay Blvd., Suite 500
	Naples, Florida 34108
Jeffrey L. Gendell(3)				220,771				9.9	%
	Tontine Financial Partners, L.P.
	Tontine Management, L.L.C.
	55 Railroad Avenue, 1st Floor
	Greenwich, Connecticut 06830
Leon A. Felman(4)				136,647				6.1	%
	25 West Brentmoor Park
	Clayton, Missouri 63105
Directors and Nominees
Thomas A. Daiber(5)				55,430				2.5	%
Randall E. Ganim(6)				6,000				*
Michael A. Griffith(7)				67,000				2.9	%
Michael J. Hejna(8)				25,792				1.1	%
Mark L. Smith(9)				26,700				1.2	%
Named Executive Officers
William R. Britt				—				*
Carol S. Hoekstra(10)				24,832				1.1	%
Michael A. O’Gorman(11)				1,500				*
Directors and executive officers of Centrue Financial as a group (9 persons)(12)				207,254				8.9	%

	*	Less than 1.0%

	(1)	Amounts reported include shares held directly, including shares subject to options granted under our stock incentive plan which are exercisable within sixty days of [                    ], 2006, as well as shares which are held in retirement accounts and shares held by members of the named individuals’ families or held by trusts of which the named individual is a trustee or substantial beneficiary, with respect to which shares the respective director may be deemed to have sole or shared voting and/or investment power. Inclusion of shares shall not constitute an admission of beneficial ownership or voting or investment power over included shares. The nature of beneficial ownership for shares listed in this table is sole voting and investment power, except as set forth in the following footnotes.
	(2)	This information is as reported to the Securities and Exchange Commission on a Schedule 13-G filed on February 14, 2006. According to the filing by Private Capital Management (“PCM”), PCM’s Chief Executive Officer and President each exercise shared dispositive and shared voting power with respect to shares held by PCM’s clients and managed by PCM, but they disclaim beneficial ownership for the shares held by PCM’s clients and disclaim the existence of a group.
	(3)	This information is as reported to the Securities and Exchange Commission on a Schedule 13F-HR filed on February 13, 2006.
	(4)	This information is as reported to the Securities and Exchange Commission on a Schedule 13-G filed on February 10, 2006.
	(5)	The amount reported includes 14,140 shares held jointly with his spouse and 1,200 shares held in an individual retirement account for the benefit of his spouse, with respect to which Mr. Daiber shares

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		voting and investment power, and 6,250 shares of restricted stock. The reported amount also includes 1,950.89 shares held in the 401(k) plan over which Mr. Daiber has sole voting and investment power and 15,000 shares subject to options, which are presently exercisable. The reported amount does not include 42,417 shares subject to options, which are not presently exercisable.
	(6)	The amount reported includes 1,000 held jointly with Mr. Ganim’s spouse, and 5,000 shares subject to options, which are presently exercisable. The reported amount does not include 231 shares of phantom stock credited to his account pursuant to the Centrue Financial Corporation Non-Employee Directors’ Deferred Fee Plan.
	(7)	The amount reported includes 45,000 shares subject to options, which are presently exercisable, 3,250 shares of restricted stock and 16,000 shares held jointly with his spouse, with respect to which Mr. Griffith shares voting and investment power. The amount reported does not include 5,227 shares of phantom stock credited to his account pursuant to the Centrue Financial Corporation Non-Employee Directors’ Deferred Fee Plan.
	(8)	The amount reported includes 10,792 shares held jointly with Mr. Hejna’s spouse with respect to which he shares voting and investment power and 15,000 shares subject to options, which are presently exercisable. The amount reported does not include 5,621 shares of phantom stock credited to his account pursuant to the Centrue Financial Corporation Non-Employee Directors’ Deferred Fee Plan.
	(9)	The amount reported includes 400 shares owned by Mr. Smith’s spouse, over which he has no voting or investment power, 1,410 shares with respect to which he has shared voting and investment power and 3,200 shares held in a trust in which Mr. Smith serves as trustee with respect to which he has sole voting and investment power. However, he does not have any financial interest over those shares and disclaims any beneficial interest. In addition, the amount reported includes 20,000 shares subject to options, which are presently exercisable. The amount does not include 4,911 shares of phantom stock credited to his account pursuant to the Centrue Financial Corporation Non-Employee Directors’ Deferred Fee Plan.

(10)	The amount reported includes 182 shares owned directly by Ms. Hoekstra’s spouse, over which she has no voting or investment power, 7,642 shares held in the 401(k) plan for the benefit of Ms. Hoekstra and over which Ms. Hoekstra has sole voting and investment power and 11,483 shares held in the 401(k) plan for the benefit of Ms. Hoekstra’s spouse over which Ms. Hoekstra has no voting or investment power. Additionally, it includes 50 shares of restricted stock and 2,200 shares subject to options, which are presently exercisable. The amount reported does not include 4,800 shares subject to options, which are not presently exercisable.
(11)	The amount reported includes 1,500 shares subject to options, which are currently exercisable. The amount reported does not include 10,167 shares subject to options, which are not presently exercisable
(12)	This amount includes shares held directly, including 103,700 shares subject to options which are deemed to be exercisable, as well as shares allocated to participant accounts under the 401(k) plan, shares held in retirement accounts and shares held by certain members of the named individuals’ families or held by trusts of which the named individual is a trustee or substantial beneficiary, with respect to which shares the respective directors and officers may be deemed to have sole or shared voting and investment power.

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							Annual Compensation												Long Term Compensation Awards
(a)							(c)				(d)				(e)								(g)				(i)
			(b)																(f)				Securities
			Fiscal Year																Restricted				Underlying
			Ended												Other Annual				Stock				Options/				All Other
Name and Principal Position			December 31st				Salary(6)				Bonus(7)				Compensation				Awards				SARs				Compensation
Thomas A Daiber(1)				2005			$	275,000			$	49,775			$	—			$	14,100	(9)			12,000			$	5,688	(11)
	President and Chief Executive			2004				253,846				62,500				17,892	(8)			—				15,000				6,150	(12)
	of Centrue Financial, Officer			2003				53,846				—				4,910	(8)			324,500	(10)			20,000				—
	Chief Executive Officer of Centrue Bank
Carol S. Hoekstra(2)				2005			$	135,000			$	12,150			$	—			$	2,820	(9)			1,000			$	6,097	(11)
	Senior Vice President of			2004				135,000				29,531				—				—				1,000				14,340	(12)
	Centrue Bank			2003				131,121				35,190				—				2,950	(10)			5,000				17,736	(13)
Michael O’Gorman(3)				2005			$	125,654			$	16,876			$	—			$	—				2,500			$	935	(11)
	North Region President of			2004				106,482				7,563				—				—				5,000				—
	Centrue Bank
William R. Britt(4)				2005			$	115,885			$	16,200			$	—			$	—				14,500			$	57,784	(14)
	President and Chief Operating Officer of Centrue Bank
James M. Lindstrom(5)				2005			$	190,000			$	51,025			$	—			$	14,100	(9)			10,000			$	5,574	(11)
	Former Chief Financial			2004				177,308				54,688				—				—				13,500				3,942	(12)
	Officer of Centrue			2003				83,462				50,000				—				177,000	(10)			15,000				—
	Financial and Centrue Bank

	(1)	Mr. Daiber became Centrue Financial’s President and Chief Executive Officer in October, 2003.
	(2)	Ms. Hoekstra was named as Executive Vice President and interim Chief Operating Officer of Centrue Financial and Centrue Bank in February, 2003 and served in those capacities until being asked to temporarily serve as Regional President of Centrue Bank in December, 2003. In January, 2004, following the recruitment of a Regional President, Ms. Hoekstra resumed her normal duties as Senior Vice President.
	(3)	Mr. O’Gorman became the North Region President of Centrue Bank in January, 2004.
	(4)	Mr. Britt was hired in July, 2005 as Centrue Bank’s President and Chief Operating Officer.
	(5)	Mr. Lindstrom served as Chief Financial Officer of Centrue Financial from July, 2003 until his resignation in February, 2006. From May to July, 2003, he served as a consultant and was paid $25,900 in connection with his consulting services.
	(6)	Includes amounts deferred under Centrue Financial’s 401(k) plan.
	(7)	Each Bonus is reported for the year it is earned and each bonus is actually paid in the following year.
	(8)	The amount reported for Mr. Daiber in 2004 represents $12,392 for an automobile allowance and $5,500 for housing expenses, while the amount reported in 2003 represents $2,710 for an automobile allowance and $2,200 for housing expenses.
	(9)	Represents restricted shares of common stock awarded on January 18, 2005. The dollar amount shown is equal to the product of the number of shares of restricted common stock granted multiplied by $28.20, the closing price of the common stock as reported by Nasdaq on January 18, 2005, the date of grant. This valuation does not take into account any diminution in value that results from the restrictions applicable to such common stock. From and after the date of issuance, holders of the restricted common

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		stock are entitled to vote such common stock and receive dividends at the same rate applicable to unrestricted shares of common stock. The restricted stock vests in two equal installments on April 8, 2005 and April 8, 2006.

(10)	Represents restricted shares of common stock awarded on October 30, 2003. The dollar amount shown is equal to the product of the number of shares of restricted common stock granted multiplied by $29.50, the closing price of the common stock as reported by the American Stock Exchange on October 29, 2003, the date of grant. This valuation does not take into account any diminution in value that results from the restrictions applicable to such common stock. From and after the date of issuance, holders of the restricted common stock are entitled to vote such common stock and receive dividends at the same rate applicable to unrestricted shares of common stock. Generally, the restricted stock vests in five equal installments on the five anniversaries following the date of grant.
(11)	Represents contributions made under Centrue Financial’s 401(k) plan and Centrue Bank’s retirement plan. The dollar amounts of the 401(k) contributions and allocations were $5,688 for Mr. Daiber, $5,624 for Ms. Hoekstra, $935 for Mr. O’Gorman and $5,574 for Mr. Lindstrom. Also included are life insurance premiums paid for the benefit of Ms. Hoekstra.
(12)	Represents contributions made under the 401(k) plan and Centrue Bank’s retirement plan. The dollar amounts of the 401(k) contributions and allocations were $6,150 for Mr. Daiber, $1,340 for Ms. Hoekstra and $3,942 for Mr. Lindstrom. The dollar amounts of the contributions and allocations under the retirement plan were $12,560 for Ms. Hoekstra. Also included are life insurance premiums paid for the benefit of Ms. Hoekstra.
(13)	Represents contributions made under Centrue Bank’s retirement plan and the cost to Centrue of share allocations made under its Employee Stock Ownership Plan, which has since been merged into the 401(k) plan. The dollar amounts of these contributions and allocations were $12,514 and $5,035 for Ms. Hoekstra. Also included are life insurance premiums paid for the benefit of Ms. Hoekstra.
(14)	Represents temporary living expenses paid for Mr. Britt in the amount of $5,550, realtor fees of $24,144, moving expenses of $12,825, reimbursement of taxes of $13,647 and contributions made under the 401(k) plan of $1,618.

(a)		(b)				(c)				(d)				(e)				(f)				(g)
																		Potential Realizable
						% of Total												Value at Assumed
						Options												Annual Rates of Stock
						Granted to												Price Appreciation for
						Employees												Option Term
		Options				in Fiscal				Exercise or Base				Expiration
Name		Granted				Year				Price ($/Sh)				Date				5%				10%
Thomas A. Daiber			12,000				20.7	%		$	27.00				12-29-12			$	340,200			$	356,400
Carol S. Hoekstra			1,000				0.2	%		$	27.00				12-29-12			$	28,350			$	29,700
Michael A. O’Gorman			2,500				4.3	%		$	26.09				9-1-12			$	68,475			$	71,725
William R. Britt			14,500				25.0	%		$	25.95				7-8-12			$	394,980			$	413,830
James M. Lindstrom			10,000				17.2	%		$	27.00				12-29- 12	(1)		$	283,500			$	297,000

(1)	Mr. Lindstrom’s options awarded in 2005 will expire on May 10, 2006, three months after the date of his resignation, and will not be exercisable.

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1(a)		(b)				(c)				(d)								(e)
										Number of Securities								Value of Unexercised In-
										Underlying Unexercised								the-Money Options/SARs
		Shares								Options/SARs at FY-End								at FY-End
		Acquired on				Value
Name		Exercise				Realized				Exercisable				Unexercisable				Exercisable				Unexercisable
Thomas A. Daiber			—				—				11,000				36,000			$	1,440			$	2,160
Carol S. Hoekstra			—				—				2,200				4,800			$	360			$	540
Michael A. O’Gorman			—				—				1,000				6,500			$	850				—
William R. Britt			—				—				—				14,500				—			$	6,960
James M. Lindstrom			—				—				8,700				29,800			$	48,600				—

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			Page
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — JUNE 30, 2006 AND 2005
	CONSOLIDATED BALANCE SHEETS			F-2
	CONSOLIDATED STATEMENTS OF INCOME			F-3
	CONSOLIDATED STATEMENTS OF CASH FLOWS			F-4
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			F-5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM				F-14
CONSOLIDATED FINANCIAL STATEMENTS — DECEMBER 31, 2005 AND 2004
	CONSOLIDATED BALANCE SHEETS			F-15
	CONSOLIDATED STATEMENTS OF INCOME			F-16
	CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY			F-17
	CONSOLIDATED STATEMENTS OF CASH FLOWS			F-18
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			F-19

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					June 30,				December 31,
					2006				2005
					(In thousands, except
					share data)
ASSETS
Cash and cash equivalents					$	30,265			$	24,358
Securities available-for-sale						182,914				196,440
Loans						403,455				417,525
Allowance for loan losses						(6,848	)			(8,362	)
	Net loans					396,607				409,163
Cash surrender value of life insurance						15,775				15,498
Mortgage servicing rights						2,373				2,533
Premises and equipment, net						13,789				13,908
Goodwill						6,963				6,963
Intangible assets, net						446				533
Other real estate						1,390				203
Other assets						6,309				6,623
		Total assets			$	656,831			$	676,222
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
	Deposits
		Non-interest-bearing			$	56,119			$	57,832
		Interest-bearing				466,576				486,009
			Total deposits			522,695				543,841
	Federal funds purchased and securities sold under agreements to repurchase					7,297				612
	Advances from the Federal Home Loan Bank					46,700				50,000
	Notes payable					8,824				9,468
	Series B mandatory redeemable preferred stock					831				831
	Other liabilities					5,180				5,395
		Total liabilities				591,527				610,147
Stockholders’ equity
	Preferred stock; 200,000 shares authorized; none issued					—				—
	Series A convertible preferred stock; 2,765 shares authorized, 2,762.24 shares outstanding (aggregate liquidation preference of $2,762)					500				500
	Series C preferred stock; 4,500 shares authorized; none issued					—				—
	Common stock, $1 par value; 10,000,000 shares authorized; 4,697,893 shares issued at June 30, 2006 and 4,684,393 shares issued at December 31, 2005					4,698				4,684
	Additional paid-in capital					23,381				23,167
	Retained earnings					50,775				48,837
	Accumulated other comprehensive income					(1,204	)			95
						78,150				77,283
	Treasury stock, at cost; 955,142 shares at June 30, 2006 and 877,517 at December 31, 2005					(12,846	)			(11,208	)
			Total stockholders’ equity			65,304				66,075
			Total liabilities and stockholders’ equity		$	656,831			$	676,222

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				Three Months								Six Months
				Ended June 30								Ended June 30,
				2006				2005				2006				2005
				(In thousands, except per share data)
Interest income
	Loans			$	7,194			$	6,751			$	14,349			$	13,201
	Securities
		Taxable			2,027				1,481				4,018				2,906
		Exempt from federal income taxes			210				263				426				521
	Federal funds sold and other				45				50				66				59
		Total interest income			9,476				8,545				18,859				16,687
Interest expense
	Deposits				3,845				2,571				7,324				4,890
	Federal funds purchased and securities sold under agreements to repurchase				51				37				123				111
	Advances from the Federal Home Loan Bank				455				550				938				1,133
	Series B mandatory redeemable preferred stock				13				13				25				25
	Notes payable				161				94				315				163
		Total interest expense			4,525				3,265				8,725				6,322
Net interest income					4,951				5,280				10,134				10,365
Provision for loan losses					(300	)			—				(1,100	)			100
Net interest income after provision for loan losses					5,251				5,280				11,234				10,265
Noninterest income
	Service charges				495				525				935				1,008
	Trust income				199				187				418				402
	Mortgage banking income				281				364				527				704
	Insurance commissions and fees				414				472				793				893
	Banked owned life insurance				137				135				277				269
	Securities gains, net				(88	)			—				(88	)			—
	Gain on sale of assets, net				(9	)			1				(9	)			3
	Other income				268				347				604				602
					1,697				2,031				3,457				3,881
Noninterest expenses
	Salaries and employee benefits				2,910				3,366				5,955				6,842
	Occupancy expense, net				346				385				789				779
	Furniture and equipment expense				521				461				1,033				885
	Marketing				98				128				209				224
	Supplies and printing				65				86				162				163
	Telephone				118				106				235				213
	Other real estate owned expense				2				29				8				34
	Amortization of intangible assets				43				43				87				87
	Other expenses				1,026				1,023				1,985				1,946
					5,129				5,627				10,463				11,173
Income before income taxes					1,819				1,684				4,228				2,973
Income taxes					525				302				1,288				627
Net income					1,294				1,382				2,940				2,346
Preferred stock dividends					52				52				104				104
Net income for common stockholders				$	1,242			$	1,330			$	2,836			$	2,242
Basic earnings per common share				$	0.33			$	0.33			$	0.75			$	0.56
Diluted earnings per common share				$	0.33			$	0.33			$	0.74			$	0.55
Total comprehensive income				$	351			$	1,521			$	1,641			$	2,060

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Table of Contents

						Six Months Ended
						June 30,
						2006				2005
						(In thousands)
Cash flows from operating activities
	Net income					$	2,940			$	2,346
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation					931				855
		Amortization of intangible assets					87				87
		Amortization of mortgage servicing rights					160				91
		Amortization of bond premiums, net					244				584
		Stock Option Expense					68				—
		Federal Home Loan Bank stock dividend					(47	)			(109	)
		Provision for loan losses					(1,100	)			100
		Provision for deferred income taxes					(310	)			466
		Net change in BOLI					(277	)			(269	)
		Net change in OREO					(2	)			—
		(Gain) loss on sale of assets					9				(3	)
		Loss on sale of securities					88				—
		Gain on sale of loans					(353	)			(540	)
		Gain on sale of real estate acquired in settlement of loans					—				(7	)
		Proceeds from sales of loans held for sale					27,395				22,927
		Origination of loans held for sale					(25,796	)			(20,710	)
		Change in assets and liabilities
			(Increase) in other assets				577				(178	)
			Increase in other liabilities				569				124
				Net cash provided by operating activities			5,183				5,764
Cash flows from investing activities
	Securities available-for-sale
		Proceeds from maturities and paydowns					19,554				27,795
		Proceeds from sales					16,594				—
		Purchases					(25,012	)			(29,757	)
	Purchase of loans						(19,513	)			(3,275	)
	Net decrease in loans						30,618				15,429
	Purchase of premises and equipment						(758	)			(1,327	)
	Sale of branch						(6,054	)			—
	Proceeds from sale of real estate acquired in settlement of loans						173				67
				Net cash provided by (used in) investing activities			15,602				8,932
Cash flows from financing activities
	Net increase (decrease) in deposits						(15,138	)			8,723
	Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase						6,685				(8,044	)
	Payments on notes payable						(2,045	)			(542	)
	Proceeds from notes payable						1,400				3,085
	Net increase in other borrowed funds						—				11
	Net decrease in advances from the Federal Home Loan Bank						(3,300	)			(5,800	)
	Dividends on common stock						(898	)			(878	)
	Dividends on preferred stock						(104	)			(104	)
	Proceeds from exercise of stock options						160				420
	Purchase of treasury stock						(1,638	)			(2,997	)
			Net cash provided by financing activities				(14,878	)			(6,126	)
Net increase in cash and cash equivalents							5,907				8,570
Cash and cash equivalents
	Beginning of period						24,358				22,802
	End of period					$	30,265			$	31,372
Supplemental disclosures of cash flow information
	Cash payments for
		Interest				$	4,575			$	6,129
		Income taxes					861				643
	Transfers from loans to other real estate owned						1,307				310

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Note 1.	Summary of Significant Accounting Policies

Note 2.	Earnings Per Share

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2006				2005				2006				2005
Basic Earnings Per Common Share
Net income available to common shareholders		$	1,242			$	1,330			$	2,836			$	2,242
Weighted average common shares outstanding			3,743				3,993				3,765				4,021
Basic Earnings Per Common Share		$	0.33			$	0.33			$	0.75			$	0.56
Diluted Earnings Per Common Share
Weighted average common shares outstanding			3,743				3,993				3,765				4,021
Add: dilutive effect of assumed exercised stock options			44				62				45				62
Weighted average common and dilutive Potential shares outstanding			3,787				4,055				3,810				4,083
Diluted Earnings Per Common Share		$	0.33			$	0.33			$	0.74			$	0.55

Note 3.	Securities

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Table of Contents

		June 30, 2006
						Gross				Gross
						Unrealized				Unrealized
		Fair Value				Gains				Losses
U.S. government agencies		$	40,418			$	—			$	(795	)
States and political subdivisions			19,177				258				(110	)
U.S. government mortgage-backed securities			75,374				203				(1,082	)
Collateralized mortgage obligations			23,777				—				(479	)
Equity securities			17,363				95				(33	)
Corporate			6,805				14				(37	)
		$	182,914			$	570			$	(2,536	)

		December 31, 2005
						Gross				Gross
						Unrealized				Unrealized
		Fair Value				Gains				Losses
U.S. government agencies			30,857				8				(364	)
States and political subdivisions			18,400				424				(16	)
U.S. government mortgage-backed securities			101,022				854				(675	)
Collateralized mortgage obligations			20,938				21				(157	)
Equity securities			18,316				54				(49	)
Corporate			6,907				62				(7	)
		$	196,440			$	1,423			$	(1,268	)

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Table of Contents

Note 4.	Loans and Allowance for Loan Losses

			June 30, 2006								December 31, 2005
			$				%				$				%
Commercial			$	84,711				21.00	%		$	91,537				21.92	%
Agricultural				21,178				5.25				26,694				6.39
Real estate:
	Commercial mortgages			130,942				32.46				126,503				30.31
	Construction			75,424				18.69				68,508				16.41
	Agricultural			27,590				6.84				33,033				7.91
	1-4 family mortgages			52,876				13.11				57,920				13.87
Installment				9,531				2.36				12,747				3.05
Other				1,203				0.30				583				0.14
Total loans				403,455				100.00	%			417,525				100.00	%
Allowance for loan losses				(6,848	)							(8,362	)
	Loans, net		$	396,607							$	409,163

		June 30,				December 31,
		2006				2005
Impaired loans for which an allowance has been provided		$	6,455			$	12,585
Impaired loans for which no allowance has been provided			3,955				563
Total loans determined to be impaired		$	10,410			$	13,148
Allowance for loan loss for impaired loans included in the allowance for loan losses		$	2,571			$	3,913

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				Three Months Ended								Six Months Ended
				June 30,								June 30,
				2006				2005				2006				2005
Beginning balance				$	7,506			$	9,948			$	8,362			$	9,732
Charge-offs:
	Commercial				203				464				223				464
	Real estate mortgages				414				419				482				425
	Installment and other loans				34				82				73				279
		Total charge-offs			651				965				778				1,168
Recoveries:
	Commercial				120				10				135				302
	Real estate mortgages				168				122				209				138
	Installment and other loans				5				44				20				55
		Total recoveries			293				176				364				495
Net charge-offs					358				789				414				673
Provision for loan losses					(300	)			0				(1,100	)			100
Ending balance				$	6,848			$	9,159			$	6,848			$	9,159
Period end total loans, net of unearned interest				$	403,455			$	404,462			$	403,455			$	404,462
Average loans				$	407,360			$	414,289			$	410,780			$	415,909
Ratio of net charge-offs to average loans					0.09	%			0.19	%			0.10	%			0.16	%
Ratio of provision for loan losses to average loans					(0.07	)%			0.00	%			(0.27	)%			0.02	%
Ratio of allowance for loan losses to ending total loans					1.70	%			2.26	%			1.70	%			2.26	%
Ratio of allowance for loan losses to total nonperforming loans					244.05	%			238.83	%			244.05	%			238.83	%
Ratio of allowance at end of period to average loans					1.68	%			2.21	%			1.67	%			2.20	%

Note 5.	Stock Option Plans

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Table of Contents

		June 30, 2006
						Weighted-
						Average
						Exercise
		Shares				Price
Outstanding at beginning of quarter			301,675			$	15.74
Granted			—				—
Exercised			(13,500	)			8.09
Forfeited			(21,811	)			15.96
Outstanding at end of quarter			266,364			$	16.11
Options exercisable at quarter end			175,233			$	14.08
Weighted-average fair value of options granted during the quarter						$	—

		June 30, 2006
		Outstanding								Exercisable
						Weighted
						Average								Weighted
						Remaining								Average
						Contractual								Exercise
Range of Exercise Prices		Number				Life				Number				Price
$ 7.25 - $ 9.75			9,000				0.7 years				9,000			$	9.75
11.25 -  13.00			59,681				3.9 years				59,681				11.64
13.88 -  18.50			112,683				4.5 years				94,552				14.94
20.30 -  23.29			85,000				8.6 years				12,000				22.78
			266,364				5.6 years				175,233			$	14.08

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		December 31, 2005
		Outstanding								Exercisable
						Weighted
						Average								Weighted
						Remaining								Average
						Contractual								Exercise
Range of Exercise Prices		Number				Life				Number				Price
$ 7.25 - $ 9.75			22,300				0.7 years				22,300			$	8.69
11.25 -  13.00			62,681				4.5 years				54,855				11.63
13.88 -  18.50			126,694				5.0 years				98,356				15.04
20.30 -  23.29			90,000				9.2 years				12,000				22.78
			301,675				5.8 years				187,511			$	13.78

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Year			Expense
July, 2006 - December, 2006			$	68
2007				67
2008				47
2009				28
	Total		$	210

		Three Months Ended				Six Months Ended
		June 30, 2005				June 30, 2005
Net income as reported for common stockholders		$	1,330			$	2,242
Deduct: stock-based compensation expense determined under fair value based method			27				57
Pro forma net income		$	1,303			$	2,185
Basic earnings per common share as reported		$	0.33			$	0.56
Pro forma basic earnings per common share		$	0.33			$	0.54
Diluted earnings per common share as reported		$	0.33			$	0.55
Pro forma diluted earnings per common share		$	0.32			$	0.53

Note 6.	Contingent Liabilities And Other Matters

Note 7.	Segment Information

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			Three Months Ended June 30, 2006
			Retail				Commercial				Treasury				Financial				Other				Consolidated
			Segment				Segment				Segment				Services				Operations				Totals
Net interest income (loss)			$	1,926			$	3,126			$	86			$	50			$	(237	)		$	4,951
	Other revenue			908				110				(89	)			565				203				1,697
	Other expense			1,497				523				63				710				1,845				4,638
Noncash items
	Depreciation			200				3				—				35				210				448
	Provision for loan losses			(100	)			(200	)			—				—				—				(300	)
	Other intangibles			—				—				—				15				28				43
Net allocations				624				1,256				158				233				(2,271	)			—
Income tax expense				207				540				(146	)			(128	)			52				525
	Segment profit (loss)			406				1,114				(78	)			(250	)			102				1,294
Goodwill				2,512				2,631				—				1,820				—				6,963
Segment assets				91,575				326,048				209,259				3,575				—				656,831

			Three Months Ended June 30, 2005
			Retail				Commercial				Treasury				Financial				Other				Consolidated
			Segment				Segment				Segment				Services				Operations				Totals
Net interest income (loss)			$	1,886			$	3,284			$	43			$	11			$	56			$	5,280
	Other revenue			1,026				112				—				657				236				2,031
	Other expense			1,647				1,053				59				671				1,713				5,143
Noncash items
	Depreciation			229				3				—				39				170				441
	Provision for loan losses			190				(190	)			—				—				—				—
	Other intangibles			—				—				—				15				28				43
Net allocations				757				864				120				197				(1,938	)			—
Income tax expense				28				358				(98	)			(63	)			77				302
	Segment profit (loss)			61				1,308				(38	)			(191	)			242				1,382
Goodwill				2,512				2,631				—				1,820				—				6,963
Segment assets				104,239				311,763				218,152				3,975				27,295				665,424

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			Six Months Ended June 30, 2006
			Retail				Commercial				Treasury				Financial				Other				Consolidated
			Segment				Segment				Segment				Services				Operations				Totals
Net interest income (loss)			$	3,908			$	6,389			$	216			$	106			$	(485	)		$	10,134
	Other revenue			1,758				221				(88	)			1,198				368				3,457
	Other expense			2,936				1,167				131				1,374				3,837				9,445
Noncash items
	Depreciation			443				6				—				73				409				931
	Provision for loan losses			25				(1,125	)			—				—				—				(1,100	)
	Other intangibles			—				—				—				30				57				87
Net allocations				1,471				2,469				318				466				(4,724	)			—
Income tax expense				264				1,389				(252	)			(215	)			102				1,288
	Segment profit (loss)			527				2,704				(69	)			(424	)			202				2,940
Goodwill				2,512				2,613				—				1,820				—				6,963
Segment assets				91,575				326,048				209,259				3,575				—				656,831

			Six Months Ended June 30, 2005
			Retail				Commercial				Treasury				Financial				Other				Consolidated
			Segment				Segment				Segment				Services				Operations				Totals
Net interest income (loss)			$	3,620			$	6,418			$	177			$	18			$	132			$	10,365
	Other revenue			1,976				226				—				1,290				389				3,881
	Other expense			3,188				1,700				117				1,404				3,822				10,231
Noncash items
	Depreciation			454				6				—				83				312				855
	Provision for loan losses			290				(190	)			—				—				—				100
	Other intangibles			—				—				—				30				57				87
Net allocations				1,541				2,210				231				354				(4,336	)			—
Income tax expense				35				760				(195	)			(162	)			189				627
	Segment profit (loss)			88				2,158				24				(401	)			477				2,346
Goodwill				2,512				2,613				—				1,820				—				6,963
Segment assets				104,239				311,763				218,152				3,975				27,295				665,424

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	Crowe Chizek and Company LLC

F-14

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					2005				2004
					(In thousands, except
					share and per share data)
ASSETS
Cash and cash equivalents					$	24,358			$	22,802
Securities available-for-sale						196,440				191,661
Loans						417,525				419,275
Allowance for loan losses						(8,362	)			(9,732	)
	Net loans					409,163				409,543
Cash value of life insurance						15,498				14,953
Mortgage servicing rights						2,533				2,772
Premises and equipment, net						13,908				13,463
Goodwill						6,963				6,963
Intangible assets, net						533				703
Other real estate						203				420
Other assets						6,623				6,266
	Total assets				$	676,222			$	669,546
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
	Deposits
		Non-interest-bearing			$	57,832			$	55,800
		Interest-bearing				486,009				456,677
			Total deposits			543,841				512,477
	Federal funds purchased and securities sold under agreements to repurchase					612				12,722
	Federal Home Loan Bank advances					50,000				61,900
	Notes payable					9,468				6,629
	Series B mandatory redeemable preferred stock					831				831
	Other liabilities					5,395				4,740
		Total liabilities				610,147				599,299
Stockholders’ equity
	Preferred stock
	Series A Convertible Preferred Stock (aggregate liquidation preference of 2,762)					500				500
	Series C Preferred Stock					—				—
	Common stock, $1 par value, 10,000,000 shares authorized; 4,684,393 and 4,640,907 shares issued in 2005 and 2004					4,684				4,641
	Surplus					23,167				22,632
	Retained earnings					48,837				46,592
	Accumulated other comprehensive income					95				1,351
						77,283				75,716
	Treasury stock, at cost, 877,517 shares at December 31, 2005 and 608,763 shares at December 31, 2004					(11,208	)			(5,469	)
		Total stockholders’ equity				66,075				70,247
			Total liabilities and stockholders’ equity		$	676,222			$	669,546

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				2005				2004				2003
				(In thousands, except per share
				data)
Interest income
	Loans			$	27,251			$	27,718			$	32,693
	Securities
		Taxable			6,331				5,925				6,805
		Exempt from federal income taxes			993				1,221				1,533
	Federal funds sold and other				122				48				55
		Total interest income			34,697				34,912				41,086
Interest expense
	Deposits				10,910				9,909				12,453
	Federal funds purchased and securities sold under agreements to repurchase				197				98				122
	Advances from the Federal Home Loan Bank				2,128				2,887				2,997
	Series B Mandatory Redeemable preferred stock				50				50				64
	Notes payable and other				427				306				325
		Total interest expense			13,712				13,250				15,961
Net interest income					20,985				21,662				25,125
Provision for loan losses					250				1,924				8,236
Net interest income after provision for loan losses					20,735				19,738				16,889
Noninterest income
	Service charges				1,996				2,866				3,090
	Merchant fee income				—				56				560
	Trust income				811				740				701
	Mortgage banking income				1,350				2,020				3,947
	Insurance and brokerage commissions and fees				1,818				2,234				2,318
	Bank Owned Life Insurance (BOLI)				545				573				681
	Securities (losses) gains, net				(79	)			123				281
	Gain on sale of other assets				4				4,263				—
	Other income				1,157				1,227				2,141
					7,602				14,102				13,719
Noninterest expenses
	Salaries and employee benefits				13,789				15,410				16,020
	Occupancy, net				1,571				2,461				2,138
	Furniture and equipment				1,935				2,215				2,094
	Marketing				496				615				709
	Supplies and printing				359				435				541
	Telephone				430				546				874
	Other real estate owned				59				8				178
	Amortization of intangible assets				170				337				247
	Other				4,156				4,954				5,806
					22,965				26,981				28,607
Income before income taxes					5,372				6,859				2,001
Income taxes					1,199				2,056				(129	)
Net income				$	4,173			$	4,803			$	2,130
Preferred stock dividends					207				207				193
Net income for common stockholders				$	3,966			$	4,596			$	1,937
Basic earnings per common share				$	1.01			$	1.14			$	0.48
Diluted earnings per common share				$	0.99			$	1.12			$	0.48
Dividends per common share				$	0.44			$	0.40			$	0.36

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				Series A																Accumulated				Unearned
				Convertible																Other				Compensation
				Preferred				Common								Retained				Comprehensive				Under Stock				Treasury
				Stock				Stock				Surplus				Earnings				Income				Option Plans				Stock				Total
				(In thousands, except share data)
Balance, January 1, 2003				$	500			$	4,571			$	21,856			$	43,113			$	3,171			$	(23	)		$	(5,124	)		$	68,064
	Common stock dividends				—				—				—				(1,441	)			—				—				—				(1,441	)
	Preferred stock dividends				—				—				—				(193	)			—				—				—				(193	)
	Exercise of stock options (56,404 shares)				—				57				628				—				—				—				—				685
	Amortization of unearned compensation under stock option plans				—				—				—				—				—				21				—				21
	Purchase of 10,500 shares of treasury stock				—				—				—				—				—				—				(189	)			(189	)
Comprehensive income
	Net income				—				—				—				2,130				—				—				—				2,130
	Net decrease in fair value-of securities classified as available-for-sale, net of income taxes and reclassification adjustments				—				—				—				—				(1,030	)			—				—				(1,030	)
		Total comprehensive income																															1,100
Balance, December 31, 2003					500				4,628				22,484				43,609				2,141				(2	)			(5,313	)			68,047
	Common stock dividends				—				—				—				(1,613	)			—				—				—				(1,613	)
	Preferred stock dividends				—				—				—				(207	)			—				—				—				(207	)
	Exercise of stock options (13,294 shares)				—				13				148				—				—				—				—				161
	Amortization of un-earned compensation under stock option plans				—				—				—				—				—				2				—				2
	Purchase of 8,000 shares of treasury stock				—				—				—				—				—				—				(156	)			(156	)
Comprehensive income
	Net income				—				—				—				4,803				—				—				—				4,803
	Net decrease in fair value-of securities classified as available-for-sale, net of income taxes and reclassification adjustments				—				—				—				—				(790	)			—				—				(790	)
		Total comprehensive income																															4,013
Balance, December 31, 2004				$	500			$	4,641			$	22,632			$	46,592			$	1,351			$	—			$	(5,469	)		$	70,247
Balance, December 31, 2004				$	500			$	4,641			$	22,632			$	46,592			$	1,351			$	—			$	(5,469	)		$	70,247
	Common stock dividends				—				—				—				(1,721	)			—				—				—				(1,721	)
	Preferred stock dividends				—				—				—				(207	)			—				—				—				(207	)
	Exercise of stock options (43,486 shares)				—				43				535				—				—				—				—				578
	Purchase of 268,754 shares of treasury stock				—				—				—				—				—				—				(5,739	)			(5,739	)
Comprehensive income
	Net income				—				—				—				4,173				—				—				—				4,173
	Net decrease in fair value-of securities classified as available-for-sale, net of income taxes and reclassification adjustments				—				—				—				—				(1,256	)			—				—				(1,256	)
		Total comprehensive income																															2,917
Balance, December 31, 2005				$	500			$	4,684			$	23,167			$	48,837			$	95			$	—			$	(11,208	)		$	66,075

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						2005				2004				2003
						(In thousands)
Cash flows from operating activities
	Net income					$	4,173			$	4,803			$	2,130
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation					1,839				2,455				1,685
		Amortization of intangible assets					170				337				247
		Amortization of mortgage servicing rights					535				722				1,732
		Amortization of unearned compensation under stock option plans					—				2				21
		Amortization of bond premiums, net					1,114				1,739				1,719
		Federal Home Loan Bank stock dividend					(191	)			(350	)			(325	)
		Provision for loan losses					250				1,924				8,236
		Provision for deferred income taxes					702				464				(616	)
		Net change in BOLI					(545	)			(574	)			(530	)
		Net change in OREO					(655	)			(619	)			(210	)
		Securities losses/(gains), net					79				(123	)			(281	)
		Gain on sale of assets, net					(4	)			(4,263	)			—
		Gain (loss) on sale of real estate acquired in settlement of loans					(42	)			(44	)			168
		Gain on sale of loans					(1,034	)			(1,877	)			(4,727	)
		Proceeds from sale of loans held for sale					51,838				86,828				205,272
		Origination of loans held for sale					(50,378	)			(83,273	)			(196,907	)
		Change in assets and liabilities
			(Increase) decrease in other assets				(679	)			1,053				(3,038	)
			Increase (decrease) in other liabilities				1,563				606				(730	)
				Net cash provided by operating activities			8,735				9,810				13,846
Cash flows from investing activities
	Securities available for sale
		Proceeds from maturities and paydowns					56,414				104,192				64,500
		Proceeds from sales					10,885				19,584				72,398
		Purchases					(74,972	)			(66,070	)			(164,690	)
	Purchase of loans						(3,275	)			—				—
	Net decrease (increase) in loans						2,730				11,745				(3,106	)
	Purchase of premises and equipment						(2,979	)			(2,197	)			(4,186	)
	Purchase of bank-owned life insurance, net						—				—				73
	Proceeds from sale of real estate acquired in settlement of loans						914				470				1,372
	Sale of branches						—				(50,835	)			—
	Acquisition of insurance agency, net of debt assumed						—				—				(150	)
		Net cash provided by (used in) investing activities					(10,283	)			16,889				(33,789	)
Cash flows from financing activities
	Net increase (decrease) in deposits					$	31,364			$	(24,419	)		$	(3,926	)
	Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase						(12,110	)			11,189				(2,055	)
	Net increase (decrease) in advances from the Federal Home Loan Bank						(11,900	)			(10,550	)			10,700
	Payments on notes payable						(2,586	)			(1,000	)			(550	)
	Proceeds from notes payable						5,425				500				148
	Dividends on common stock						(1,721	)			(1,613	)			(1,441	)
	Dividends on preferred stock						(207	)			(207	)			(193	)
	Proceeds from exercise of stock options						578				161				685
	Purchase of treasury stock						(5,739	)			(156	)			(189	)
		Net cash provided by (used in) financing activities					3,104				(26,095	)			3,179
Net increase (decrease) in cash and cash equivalents							1,556				604				(16,764	)
Cash and cash equivalents
	Beginning of year						22,802				22,198				38,962
	End of year					$	24,358			$	22,802			$	22,198
Supplemental disclosures of cash flow information
	Cash payments for
		Interest				$	12,980			$	13,219			$	16,453
		Income taxes					862				346				1,850
	Transfers from loans to other real estate owned						675				619				210

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Note 1.	Nature of Operations and Summary of Significant Accounting Policies

	Basis of presentation

	Cash flows

	Securities

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	Loan commitments and related financial instruments

	Loans

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	Mortgage servicing rights

	Foreclosed assets

	Premises and equipment

	Bank-owned life insurance

	Goodwill and other intangible assets

	Long-term assets

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	Repurchase agreements

	Income taxes

	Earnings per share

	Stock compensation

		2005				2004				2003
Net income as reported for common stockholders		$	3,966			$	4,596			$	1,937
Deduct: stock-based compensation expense determined under fair value based method			106				96				95
Pro forma net income		$	3,860			$	4,500			$	1,842
Basic earnings per common share as reported		$	1.01			$	1.14			$	0.48
Pro forma basic earnings per common share			0.98				1.12				0.46
Diluted earnings per common share as reported			0.99				1.12				0.48
Pro forma diluted earnings per common share			0.96				1.09				0.45

		2005				2004				2003
Fair value		$	4.94			$	4.74			$	4.93
Risk-free interest rate			4.56	%			3.32	%			2.27	%
Expected option life (years)			5				5				5
Expected stock price volatility			23.45	%			24.58	%			26.04	%
Dividend yield			1.92	%			1.90	%			1.65	%

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	Stockholders’ Equity:

	Preferred stock

	Series A Convertible Preferred Stock: Union has authorized 2,765 shares of Series A Convertible Preferred Stock. There were 2,762.24 shares of Series A Convertible Preferred Stock issued at December 31, 2005 and 2004. Preferential cumulative cash dividends are payable quarterly at an annual rate of $75.00 per share. Dividends accrue on each share of Series A Preferred Stock from the date of issuance and from day to day thereafter, whether or not earned or declared. The shares of Series A Preferred Stock are convertible into 172,140 common shares. Series A Preferred Stock is not redeemable for cash. Upon dissolution, winding up, or liquidation of Union, voluntary or otherwise, holders of Series A Preferred Stock will be entitled to receive, out of the assets of Union available for distribution to stockholders, the amount of $1,000 per share, plus any accrued but unpaid dividends, before any payment or distribution may be made on shares of common stock or any other securities issued by Union that rank junior to the Series A Preferred Stock.
	Series B Mandatory Redeemable Preferred Stock: Union has authorized 1,092 shares of Series B Mandatory Redeemable Preferred Stock. There were 831 shares of Series B Mandatory Redeemable Preferred Stock issued at December 31, 2005 and 2004. Preferential cumulative cash dividends are payable quarterly at an annual rate of $60.00 per share. Dividends accrue on each share of Series B Preferred Stock from the date of issuance and from day to day, thereafter, whether or not earned or declared. Each original holder of Series B Preferred Stock (or upon such holder’s death, their executor or personal representatives) will have the option, exercisable at their sole discretion, to sell, and Union will be obligated to redeem such holder’s shares of Series B Preferred Stock upon the earlier to occur of the death of the respective original holder of Series B Preferred Stock or August 6, 2006. The per share price payable by Union for such shares of Series B Preferred Stock will be equal to $1,000 per share, plus any accrued but unpaid dividends. Upon dissolution, wind up, or liquidation of Union, voluntary or otherwise, holders of Series B Preferred Stock will be entitled to receive, out of the assets of Union available for distribution to stockholders, the amount of $1,000 per share, plus any accrued but unpaid dividends, before any payment or distribution may be made on shares of common stock or any other securities issued by Union that rank junior to the Series B Preferred Stock.
	Union adopted FASB Statement 150, Accounting for Certain Financial Instruments With Characteristics of Both Liabilities and Equities, during the fourth quarter of 2004.
	Statement 150 requires reporting mandatorily redeemable shares as liabilities, as well as obligations not in the form of shares to repurchase shares that may require cash payment and some obligations that may be settled by issuing a variable number of equity shares.
	Series C Junior Participating Preferred Stock: Union has authorized 4,500 shares of Series C Junior Participating Preferred Stock. There were no shares issued at December 31, 2005 and 2004. The Series C Preferred Stock is only issuable upon exercise of rights issued pursuant to Union’s Stockholder Rights Plan. Each share of Series C Junior Participating Preferred Stock is entitled to, when, as, and if declared, a minimum preferential quarterly dividend payment of $3.00 per share but will be entitled to an aggregate dividend of 1,000 times the dividend declared per share of common stock. In the event of liquidation, dissolution, or winding up of Union, the holders of the Series C Preferred Stock will be entitled to a minimum preferential payment of $1,000 per share (plus any accrued but unpaid dividends) and will be entitled to an aggregate payment of 1,000 times the payment made per share of common

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stock. Each share of Series C Preferred Stock will have 1,000 votes, voting together with the common stock. Finally, in the event of any merger, consolidation, or other transaction in which outstanding shares of common stock are converted or exchanged, each share of Series C Preferred Stock will be entitled to receive 1,000 times the amount received per share of common stock. These rights are protected by customary antidilution provisions.

	Stockholder rights plan

	Dividend restriction

	Fair value of financial instruments

	Loss contingencies

	Comprehensive income

	Adoption of new accounting standards

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	Operating segments

Note 2.	Business Acquisitions and Divestitures

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Cash and cash equivalents		$	675
Loans			40,226
Premises and equipment			2,495
Other assets			235
Deposits			(88,600	)
Other liabilities			(296	)

Note 3.	Securities

								Gross				Gross
								Unrealized				Unrealized
				Fair Value				Gains				Losses
Available-for-sale
	December 31, 2005
		U.S. government agencies		$	30,857			$	8			$	(364	)
		States and political subdivisions			18,400				424				(16	)
		U.S. government agency mortgage-backed securities			101,022				854				(675	)
		Collateralized mortgage obligations			20,938				21				(157	)
		Equity securities			18,316				54				(49	)
		Corporate			6,907				62				(7	)
				$	196,440			$	1,423			$	(1,268	)
Available-for-sale
	December 31, 2004
		U.S. government agencies		$	20,924			$	144			$	(26	)
		States and political subdivisions			24,647				879				(6	)
		U.S. government agency mortgage-backed securities			117,500				1,205				(318	)
		Collateralized mortgage obligations			2,486				—				(26	)
		Equity securities			17,865				39				(9	)
		Corporate			8,239				323				—
				$	191,661			$	2,590			$	(385	)

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		Years Ended December 31,
		2005				2004				2003
Proceeds		$	10,885			$	19,584			$	72,398
Realized gains			24				166				281
Realized losses			(103	)			(43	)			—

Fair Value
Due in one year or less		$	6,460
Due after one year through five years			40,241
Due after five years through ten years			8,036
Due after ten years			1,427
U.S. government agency mortgage-backed securities			101,022
Collateralized mortgage obligations			20,938
Equity securities			18,316
		$	196,440

		Less Than 12 Months								12 Months or More								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
Description of Securities		Value				Loss				Value				Loss				Value				Loss
U.S. government agencies		$	21,445			$	(260	)		$	5,876			$	(104	)		$	27,321			$	(364	)
State and political subdivisions			611				(5	)			462				(11	)			1,073				(16	)
U.S. government agency mortgage-backed securities			36,194				(429	)			13,929				(246	)			50,123				(675	)
Collateralized mortgage Obligations			15,383				(157	)			48				—				15,431				(157	)
Equity securities			1,030				(7	)			—				—				1,030				(7	)
Corporate			1,822				(7	)			3,708				(42	)			5,530				(49	)
Total temporarily impaired		$	76,485			$	(865	)		$	24,023			$	(403	)		$	100,508			$	(1,268	)

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		Less Than 12 Months								12 Months or More								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
Description of Securities		Value				Loss				Value				Loss				Value				Loss
U.S. government agencies		$	5,954			$	(26	)		$	—			$	—			$	5,954			$	(26	)
State and political subdivisions			900				(1	)			563				(5	)			1,463				(6	)
U.S. government agency mortgage- backed securities			30,476				(261	)			11,297				(56	)			41,773				(317	)
Collateralized mortgage obligations			222				(2	)			2,074				(25	)			2,296				(27	)
Equity securities			—				—				—				—				—				—
Corporate			3,741				(9	)			—				—				3,741				(9	)
Total temporarily impaired		$	41,293			$	(299	)		$	13,934			$	(86	)		$	55,227			$	(385	)

Note 4.	Loans

		December 31,
		2005				2004
Commercial		$	118,231			$	120,659
Commercial real estate			183,361				129,597
Real estate			101,287				145,307
Real estate loans held for sale			1,316				1,742
Installment			12,747				21,502
Other			583				468
		$	417,525			$	419,275

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			Years Ended December 31,
			2005				2004				2003
Balance at beginning of year			$	9,732			$	9,011			$	6,450
	Provision for loan losses			250				1,924				8,236
	Reduction due to sale of loans			—				(174	)			—
	Recoveries			700				1,435				554
	Loans charged off			(2,320	)			(2,464	)			(6,229	)
Balance at end of year			$	8,362			$	9,732			$	9,011

		December 31,
		2005				2004				2003
Year-end impaired loans for which an allowance has been provided		$	12,585			$	15,709			$	10,212
Year-end impaired loans for which no allowance has been provided			563				818				2,682
Total loans determined to be impaired		$	13,148			$	16,527			$	12,894
Allowance for loan loss for impaired loans included in the allowance for loan losses		$	3,913			$	4,978			$	3,386
Average recorded investment in impaired loans		$	14,839			$	17,088			$	11,039
Interest income recognized from impaired loans		$	1,189			$	885			$	694
Cash basis interest income recognized from impaired loans		$	177			$	24			$	138

		December 31,
		2005				2004
Loans past due over 90 days still on accrual		$	922			$	553
Nonaccrual loans			3,082				3,649

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Balance at December 31, 2004			$	23,689
	New loans, extensions, and modifications			23,841
	Repayments			(24,855	)
	Change in classification			(101	)
Balance at December 31, 2005			$	22,544

Note 5.	Loan Servicing

		Years Ended December 31,
		2005				2004				2003
Proceeds from sales of mortgage loans		$	51,838			$	86,828			$	205,272
Gain on sales of mortgage loans		$	1,034			$	1,877			$	4,727

		December 31,
		2005				2004
Federal Home Loan Mortgage Corporation		$	1,706			$	2,586
Federal National Mortgage Association			289,974				313,241
Small Business Administration			1,333				1,576
Other			9,229				8,649
		$	302,242			$	326,052

		Years Ended December 31,
		2005				2004				2003
Balance at beginning of year		$	2,772			$	2,775			$	2,640
Originated mortgage servicing rights			296				719				1,867
Amortization			(535	)			(722	)			(1,732	)
Balance at end of year		$	2,533			$	2,772			$	2,775

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2005		$	492
2006		$	450
2007		$	425
2008		$	400
2009		$	375

		December 31,
		2005				2004
Secured by one-to-four-family residences		$	1,316			$	1,742

Note 6.	Premises and Equipment

		December 31,
		2005				2004
Land		$	3,329			$	3,069
Buildings			11,632				11,290
Furniture and equipment			17,728				16,288
Construction in process			132				248
			32,821				30,895
Less accumulated depreciation			18,913				17,432
		$	13,908			$	13,463

Note 7.	Goodwill and Intangible Assets

	Goodwill

		2005				2004
Beginning of year		$	6,963			$	7,642
Amount allocated to branch sales			—				(679	)
End of year		$	6,963			$	6,963

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	Acquired Intangible Assets

				2005								2004
				Gross								Gross
				Carrying				Accumulated				Carrying				Accumulated
				Amount				Amortization				Amount				Amortization
Amortized intangible assets:
	Core deposit intangibles			$	1,089			$	1,022			$	1,089			$	911
	Other customer relationship intangibles				749				283				749				224
		Total		$	1,838			$	1,305			$	1,838			$	1,135

2006		$	126
2007			60
2008			60
2009			60
2010			60
Thereafter			164

Note 8.	Deposits

		December 31,
		2005				2004
Non-interest-bearing demand deposits		$	57,832			$	55,800
Savings, NOW, and money market accounts			175,004				179,740
Time deposits of $100 or more			162,328				134,149
Other time deposits			148,677				142,788
		$	543,841			$	512,477

Year		Amount
2006		$	227,895
2007			48,121
2008			17,182
2009			9,030
2010			6,027
Thereafter			2,750
		$	311,005

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		December 31,
		2005				2004
3 months or less		$	60,256			$	36,318
Over 3 months through 6 months			30,823				17,065
Over 6 months through 12 months			36,871				38,247
Over 12 months			34,378				42,519
		$	162,328			$	134,149

Note 9.	Borrowed Funds

		December 31,
		2005				2004
Federal funds purchased		$	—			$	11,700
Securities sold under agreements to repurchase			612				1,022
		$	612			$	12,722

		2005								2004
		Average								Average
		Interest								Interest
Year		Rate				Amount				Rate				Amount
2005											4.13	%		$	16,900
2006			4.98	%		$	8,300				5.03				8,300
2007			3.51				10,200				3.29				10,200
2008			2.97				13,300				2.97				13,300
2009			3.78				5,000				3.78				5,000
2010			4.50				5,200				—				—
Thereafter			4.68				8,000				4.67				8,200
			3.93	%		$	50,000				3.91	%		$	61,900

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		2005				2004
Line of credit loan ($3,000) from LaSalle National Bank; interest due quarterly at the higher of (1) 90-day LIBOR plus 1.75% or (2) 4%; balance due on October 1, 2006; secured by 100% of the stock of UnionBank		$	1,000			$	2,000
Revolving credit loan ($10,000) from LaSalle National Bank; interest due quarterly at the higher of (1) 90-day LIBOR plus 1.75% or (2) 4%; balance due on October 1, 2006; secured by 100% of the stock of UnionBank			8,200				4,275
Three promissory notes to individuals related to the purchase of the Howard Marshall Agency. The original amounts of the notes were $376, $45, and $29. These notes were all entered into on November 1, 2003 and all carry an interest rate of 5%. The notes require monthly installment payments of principal and interest. These notes mature on November 1, 2008			268				354
		$	9,468			$	6,629

			Years Ended December 31,
			2005				2004				2003
Federal Funds Purchased
	Maximum month-end balance during the year		$	8,600			$	11,700			$	6,600
	Average balance during the year			2,340				1,935				2,155
	Weighted average interest rate for the year			3.34	%			1.71	%			0.95	%
	Weighted average interest rate at year end			4.50	%			1.71	%			N/A
Securities Sold Under Agreements to Repurchase
	Maximum month-end balance during the year		$	12,497			$	15,210			$	17,355
	Average balance during the year			3,903				3,164				4,621
	Weighted average interest rate for the year			3.04	%			2.04	%			2.19	%
	Weighted average interest rate at year end			3.06	%			3.59	%			1.52	%
Advances from the Federal Home Loan Bank
	Maximum month-end balance during the year		$	61,900			$	74,700			$	77,450
	Average balance during the year			54,472				70,359				70,018
	Weighted average interest rate for the year			3.91	%			4.10	%			4.28	%
	Weighted average interest rate at year end			3.99	%			4.03	%			4.21	%
Notes Payable
	Maximum month-end balance during the year		$	10,105			$	7,882			$	8,275
	Average balance during the year			8,345				7,347				7,898
	Weighted average interest rate for the year			5.11	%			4.18	%			4.06	%
	Weighted average interest rate at year end			5.53	%			3.33	%			3.46	%

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Note 10.	Income Taxes

			Years Ended December 31,
			2005				2004				2003
Federal
	Current		$	1,189			$	1,243			$	419
	Deferred			28				438				(535	)
				1,217				1,681				(116	)
State
	Current			(20	)			349				68
	Deferred			2				26				(81	)
				(18	)			375				(13	)
			$	1,199			$	2,056			$	(129	)

			Years Ended December 31,
			2005				2004				2003
Expected income taxes			$	1,826			$	2,332			$	680
Income tax effect of
	Interest earned on tax-free investments and loans			(397	)			(471	)			(577	)
	Nondeductible interest expense incurred to carry tax-free investments and loans			35				37				48
	Nondeductible amortization			—				117				—
	State income taxes, net of federal tax benefit			154				241				(14	)
	State income tax refund			(251	)			—				—
	Increase in CSV of officers’ life insurance			(186	)			(195	)			(223	)
	Other			17				(5	)			(43	)
			$	1,199			$	2,056			$	(129	)

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					December 31,
					2005				2004
Deferred tax assets
	Allowance for loan losses				$	3,246			$	3,781
	Deferred compensation, other					209				131
	Total deferred tax assets					3,455				3,912
Deferred tax liabilities
	Depreciation				$	(430	)		$	(602	)
	Basis adjustments arising from acquisitions					(1,147	)			(1,174	)
	Mortgage servicing rights					(983	)			(1,076	)
	Securities available-for-sale					(60	)			(854	)
	Federal Home Loan Bank dividend received in stock					(512	)			(416	)
	Other					(147	)			(378	)
		Total deferred tax liabilities				(3,279	)			(4,500	)
			Net deferred tax liabilities		$	176			$	(588	)

Note 11.	Benefit Plans

Note 12.	Stock Option Plans

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		2005								2004								2003
						Weighted-								Weighted-								Weighted-
						Average								Average								Average
						Exercise								Exercise								Exercise
		Shares				Price				Shares				Price				Shares				Price
Outstanding at beginning of year			300,431			$	14.08				304,648			$	13.41				362,519			$	12.66
Granted			50,000				20.64				20,000				21.75				20,000				23.29
Exercised			(43,486	)			10.86				(13,294	)			9.12				(56,404	)			10.54
Forfeited			(5,270	)			7.64				(10,923	)			15.58				(21,467	)			14.19
Outstanding at end of year			301,675				15.74				300,431				14.08				304,648				13.41
Options exercisable at year end			187,511			$	13.78				200,152			$	12.75				181,556			$	11.90
Weighted-average fair value of options granted during the year						$	4.94							$	4.74							$	4.93

		Outstanding								Exercisable
						Weighted
						Average								Weighted
						Remaining								Average
						Contractual								Exercise
Range of Exercise Prices		Number				Life				Number				Price
$ 7.25 - $ 9.75			22,300				0.7 years				22,300			$	8.69
11.25 -  13.00			62,681				4.5 years				54,855				11.63
13.88 -  18.50			126,694				5.0 years				98,356				15.04
21.75 -  23.29			90,000				9.2 years				12,000				22.78
			301,675				5.8 years				187,511			$	13.78

Note 13.	Earnings Per Share

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				2005				2004				2003
Basic earnings per share
	Net income available to common stockholders			$	3,966			$	4,596			$	1,937
	Weighted average common shares outstanding				3,944				4,034				4,000
		Basic earnings per share		$	1.01			$	1.14			$	0.48
	Weighted average common shares outstanding				3,944				4,034				4,000
	Add dilutive effect of assumed exercised stock options				59				76				69
	Weighted average common and dilutive potential shares outstanding				4,003				4,110				4,069
		Diluted earnings per share		$	0.99			$	1.12			$	0.48

Note 14.	Regulatory Matters

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																				To be Well
																				Capitalized
																				Under Prompt
												To be Adequately								Corrective Action
				Actual								Capitalized								Provisions
				Amount				Ratio				Amount				Ratio				Amount				Ratio
As of December 31, 2005
	Total capital (to risk-weighted assets)
		UnionBancorp, Inc.		$	66,812				13.3	%		$	40,107				8.0	%			N/A				N/A
		UnionBank			77,475				15.5				40,076				8.0				50,095				10.0
	Tier I capital (to risk-weighted assets) UnionBancorp, Inc.			$	60,546				12.1				20,054				4.0				N/A				N/A
		UnionBank			71,214				14.2				20,038				4.0				30,057				6.0
	Tier I leverage ratio (to average assets) UnionBancorp, Inc.			$	60,546				9.0				26,831				4.0				N/A				N/A
		UnionBank			71,214				10.6				26,816				4.0				33,520				5.0

																				To be Well
																				Capitalized
																				Under Prompt
												To be Adequately								Corrective Action
				Actual								Capitalized								Provisions
				Amount				Ratio				Amount				Ratio				Amount				Ratio
As of December 31, 2004
	Total capital (to risk-weighted assets)
		UnionBancorp, Inc.		$	69,414				14.3	%		$	38,826				8.0	%			N/A				N/A
		UnionBank			77,523				16.0				38,854				8.0				48,567				10.0
	Tier I capital (to risk-weighted assets) UnionBancorp, Inc.			$	63,347				13.0				19,413				4.0				N/A				N/A
		UnionBank			71,452				14.7				19,427				4.0				29,140				6.0
	Tier I leverage ratio (to average assets) UnionBancorp, Inc.			$	63,347				9.5				26,560				4.0				N/A				N/A
		UnionBank			71,452				10.7				26,646				4.0				33,307				5.0

Note 15.	Fair Value of Financial Instruments

The carrying amount is the estimated fair value for cash and due from banks, federal funds sold, short-term borrowings, Federal Home Loan Bank stock, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. Security fair values are based on market prices or dealer quotes and, if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, the fair value is based on discounted

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cash flows using current market rates applied to the estimated life and credit risk. Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values. The fair value of loans held for sale is based on market quotes. The fair value of debt and redeemable stock is based on current rates for similar financing. The fair value of off-balance-sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements.

			December 31,
			2005								2004
			Carrying								Carrying
			Amount				Fair Value				Amount				Fair Value
Financial assets
	Cash and cash equivalents		$	24,358			$	24,358			$	22,802			$	22,802
	Securities			196,440				196,440				191,661				191,661
	Loans			409,163				405,398				409,543				412,728
	Accrued interest receivable			4,418				4,418				4,151				4,151
Financial liabilities
	Deposits			543,841				521,350				512,477				502,805
	Federal funds purchased and securities sold under agreements to repurchase			612				612				12,722				12,722
	Advances from the Federal Home Loan Bank			50,000				48,828				61,900				61,669
	Series B mandatorily redeemable preferred stock			831				831				831				831
	Notes payable			9,468				9,468				6,629				6,629
	Accrued interest payable			3,206				3,206				2,474				2,474

Note 16.	Commitments, Contingencies, and Credit Risk

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			Standby																Range of Rates
			Letters				Variable Rate				Fixed Rate				Total				on Fixed Rate
			of Credit				Commitments				Commitments				Commitments				Commitments
Commitments to extend credit and standby letters of credit
	December 31, 2005		$	8,066			$	58,667			$	20,777			$	87,510				2.25% - 18.00%
	December 31, 2004		$	4,331			$	64,787			$	25,228			$	94,346				2.25% - 18.00%

2006			$	107
2007				107
2008				107
2009				107
2010				65
Thereafter				13
	Total		$	506

Note 17.	Condensed Financial Information — Parent Company Only

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	Balance Sheets (Parent Company Only)

		December 31,
		2005				2004
ASSETS
Cash and cash equivalents		$	116			$	463
Investment in subsidiaries			76,744				78,352
Other assets			100				100
		$	76,960			$	78,915

		December 31,
		2005				2004
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Notes payable		$	9,200			$	6,275
Mandatory redeemable preferred stock			831				831
Other liabilities			854				1,562
			10,885				8,668
Stockholders’ equity			66,075				70,247
		$	76,960			$	78,915

	Income Statements (Parent Company Only)

		Years Ended December 31,
		2005				2004				2003
Dividends from subsidiaries		$	5,031			$	3,395			$	4,358
Other income			6				1,206				2,120
Interest expense			459				334				382
Other expenses			488				3,442				5,417
Income tax benefit			(436	)			(1,077	)			(1,462	)
Equity in undistributed earnings of subsidiaries (dividends in excess of earnings)			(353	)			2,901				(11	)
Net income			4,173				4,803				2,130
Less dividends on preferred stock			207				207				193
Net income on common stock		$	3,966			$	4,596			$	1,937

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	Statements of Cash Flows (Parent Company Only)

					Years Ended December 31,
					2005				2004				2003
Cash flows from operating activities
	Net income				$	4,173			$	4,803			$	2,130
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation				—				186				264
		Undistributed earnings of subsidiaries				353				(2,901	)			11
		Amortization of deferred compensation — stock options				—				2				21
		Decrease (increase) in other assets				(2	)			514				(161	)
		Increase in other liabilities				(708	)			196				472
			Net cash provided by operating activities			3,816				2,800				2,737
Cash flows from investing activities
	Purchases of premises and equipment					—				223				70
	Investment in subsidiaries					—				(673	)			—
		Net cash provided by financing activities				—				(450	)			70
Cash flows from financing activities
	Net increase (decrease) in notes payable				$	2,925			$	(1,000	)		$	(1,000	)
	Dividend paid on common stock					(1,721	)			(1,613	)			(1,441	)
	Dividends paid on preferred stock					(207	)			(207	)			(193	)
	Proceeds from exercise of stock options					579				161				685
	Purchase of treasury stock					(5,739	)			(156	)			(189	)
		Net cash used in financing activities				(4,163	)			(2,815	)			(2,138	)
	Net increase (decrease) in cash and cash equivalents					(347	)			(465	)			669
Cash and cash equivalents
	Beginning of year					463				928				259
	End of year				$	116			$	463			$	928

Note 18.	Other Comprehensive Income

			Years Ended December 31,
			2005				2004				2003
Change in unrealized gains on securities available-for-sale			$	(2,050	)		$	(1,167	)		$	(1,386	)
Reclassification adjustment for losses (gains) recognized in income				79				(123	)			(281	)
	Net unrealized gains			(1,971	)			(1,290	)			(1,667	)
Tax expense				(715	)			(500	)			(637	)
Other comprehensive income			$	(1,256	)		$	(790	)		$	(1,030	)

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Note 19.	Segment Information

				Banking				Mortgage				Financial				Other				Consolidated
				Segment				Banking				Services				Segments				Totals
2005
	Net interest income			$	21,192			$	267			$	(15	)		$	(459	)		$	20,985
	Other revenue				3,862				1,349				2,625				(234	)			7,602
	Other expense				16,111				868				2,876				1,093				20,948
	Noncash items
		Depreciation			1,497				86				158				98				1,839
		Provision for loan loss			250				—				—				—				250
		Amortization of intangibles			114				—				56				—				170
	Segment profit (loss)				7,082				662				(484	)			(1,888	)			4,173
	Goodwill				5,143				—				1,820				—				6,963
	Segment assets				668,273				4,368				3,723				(142	)			676,222
2004
	Net interest income			$	21,284			$	700			$	9			$	(331	)		$	21,662
	Other revenue				9,012				2,070				3,019				1				14,102
	Other expense				16,833				1,605				3,699				2,052				24,189
	Noncash items
		Depreciation			1,956				100				211				188				2,455
		Provision for loan loss			1,924				—				—				—				1,924
		Amortization of intangibles			286				—				51				—				337
	Segment profit (loss)				9,297				1,065				(933	)			(2,570	)			4,803
	Goodwill				5,143				—				1,820				—				6,963
	Segment assets				662,415				3,887				5,388				(2,144	)			669,546
2003
	Net interest income			$	25,143			$	379			$	(20	)		$	(377	)		$	25,125
	Other revenue				5,043				4,914				3,192				570				13,719
	Other expense				17,377				3,201				4,155				3,874				28,607
	Noncash items
		Depreciation			1,144				99				179				263				1,685
		Provision for loan loss			8,081				—				—				—				8,081
		Amortization of intangibles			206				—				41				—				247
	Segment profit (loss)				4,655				320				(627	)			(2,218	)			2,130
	Goodwill				5,822				—				1,820				—				7,642
	Segment assets				781,189				2,620				8,394				1,219				793,422

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Note 20.	Quarterly Results of Operations (Unaudited)

		Year Ended December 31, 2005																Year Ended December 31, 2004
		Three Months Ended																Three Months Ended
		Dec. 31(A)				Sep. 30				June 30(B)				March 31				Dec. 31(C)				Sep. 30(D)				June 30				March 31
Total interest income		$	9,290			$	8,720			$	8,545			$	8,142			$	8,056			$	8,505			$	8,843			$	9,508
Total interest expense			3,886				3,504				3,265				3,057				3,089				3,142				3,312				3,707
Net interest income			5,404				5,216				5,280				5,085				4,967				5,363				5,531				5,801
Provision for loan losses			100				50				—				100				300				374				500				750
Noninterest income			1,707				2,014				2,031				1,850				1,093				6,895				3,190				2,924
Noninterest expense			6,042				5,750				5,627				5,546				5,459				7,514				7,029				6,979
Income (loss) before income taxes			969				1,430				1,684				1,289				301				4,370				1,192				996
Income tax expense (benefit)			203				369				302				325				(172	)			1,753				279				196
			766				1,061				1,382				964				473				2,617				913				800
Preferred stock dividend			51				52				52				52				52				52				52				52
Net income (loss) for common stockholders		$	715			$	1,009			$	1,330			$	912			$	421			$	2,565			$	861			$	748
Basic earnings (loss) per share		$	0.19			$	0.26			$	0.33			$	0.23			$	0.10			$	0.64			$	0.21			$	0.19
Diluted earnings (loss) per share		$	0.18			$	0.26			$	0.33			$	0.22			$	0.10			$	0.62			$	0.21			$	0.18

(A)		The net income for the quarter was impacted by nonrecurring expenses primarily related to organizational restructuring. The impact to earnings was a decrease of approximately $0.05 per diluted share.
(B)		The net income for the quarter was impacted by a reduction in state income taxes related to the receipt of a tax refund related to amended returns outstanding from prior years. The impact to earnings was an increase of approximately $0.06 per diluted share.
(C)		The net income for the quarter was impacted by the sale of 5 branches in the western Illinois region with a pretax gain of $4.2 million.
(D)		A reclassification was made to the third quarter information to allocate a portion of the allowance for loan losses to the loans sold as part of the branch sales during the quarter. This reclassification had no impact on the balance sheet or income, as noninterest income was increased by $174 and the provision for loan losses was increased by $174.

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			Page
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — JUNE 30, 2006 AND 2005
	CONSOLIDATED BALANCE SHEETS			F-47
	CONSOLIDATED STATEMENTS OF INCOME			F-48
	CONSOLIDATED STATEMENTS OF CASH FLOWS			F-49
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			F-51
	REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			F-57
CONSOLIDATED FINANCIAL STATEMENTS — DECEMBER 31, 2005 AND 2004
	CONSOLIDATED BALANCE SHEETS			F-58
	CONSOLIDATED STATEMENTS OF INCOME			F-59
	CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY			F-60
	CONSOLIDATED STATEMENTS OF CASH FLOWS			F-61
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			F-63

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				June 30,				December 31,
				2006				2005
				(Dollars in thousands)
ASSETS
Cash and due from banks				$	11,534			$	13,566
Interest bearing due from banks and other					3,322				4,692
	Cash and cash equivalents				14,856				18,258
Certificates of Deposit					50				50
Investment Securities available-for-sale, at fair value					121,175				125,190
Loans, net of allowance for loan losses of $4,294 and $4,486					435,183				428,468
Loans held for sale					3,132				8,373
Premises and equipment					22,678				22,579
Goodwill					14,362				14,362
Life insurance contracts					9,647				9,465
Non-marketable equity securities					5,065				5,059
Accrued interest receivable					3,376				3,248
Intangible assets					1,779				1,922
Real estate held for sale					38				1,709
Other assets					3,162				2,840
		Total Assets		$	634,503			$	641,523
LIABILITIES
Deposits:
	Noninterest bearing			$	65,526			$	67,982
	Interest bearing				396,752				439,934
		Total Deposits			462,278				507,916
Short-term borrowings					65,112				27,014
Long-term borrowings					60,053				58,723
Other liabilities					3,790				4,767
		Total Liabilities			591,233				598,420
Stockholders’ Equity
	Preferred stock, $.01 par value — 500,000 shares authorized and unissued				—				—
	Common stock, $.01 par value — 5,500,000 authorized; 4,200,300 shares issued and outstanding				42				42
	Additional paid-in capital				30,895				30,460
	Retained income, partially restricted				49,023				47,403
	Accumulated other comprehensive (loss)				(2,586	)			(1,657	)
	Treasury stock, (1,967,411 and 1,937,361 shares), at cost				(34,104	)			(33,145	)
		Total Stockholders’ Equity			43,270				43,103
		Total Liabilities and Stockholders’ Equity		$	634,503			$	641,523

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					Three Months								Six Months
					Ended June 30								Ended June 30
					2006				2005				2006				2005
					(Dollars in thousands, except per share
					data)
Interest and dividend income:
	Loans				$	7,206			$	6,687			$	14,286			$	12,872
	Investments					1,281				1,229				2,573				2,396
	Deposits with banks and other					8				15				15				23
	FHLB stock dividends					37				56				76				105
		Total interest and dividend income				8,532				7,987				16,950				15,396
Interest expense:
	Deposits					2,771				2,155				5,543				4,100
	Long-term borrowings					979				866				1,699				1,589
	Short-term borrowings					438				69				670				125
		Total interest expense				4,188				3,090				7,912				5,814
			Net interest income			4,344				4,897				9,038				9,582
Provision for loan losses						75				251				150				501
		Net interest income after provision for loan losses				4,269				4,646				8,888				9,081
Noninterest income:
	Fee income					1,632				1,330				2,799				2,429
	Net gain on sale of securities					—				—				4				183
	Net gain (loss) on sale of real estate held for sale					181				(8	)			157				(6	)
	Net gain on sale of loans					324				158				431				289
	Increase in cash surrender value of life Insurance contracts					90				87				182				178
	Other					100				140				397				198
		Total noninterest income				2,327				1,707				3,970				3,271
Noninterest expense:
	Compensation and benefits					2,736				2,688				5,868				5,024
	Occupancy, net					483				391				946				778
	Furniture and equipment					262				803				544				1,133
	Advertising					110				80				200				160
	Data processing					462				160				806				318
	Telephone and postage					220				153				372				324
	Amortization of intangibles					71				72				143				133
	Legal and professional fees					191				319				353				461
	Other					773				791				1,436				1,450
	Total noninterest expense					5,308				5,457				10,668				9,781
Income before income taxes						1,288				896				2,190				2,571
Income tax expense						350				176				570				664
Net income					$	938			$	720			$	1,620			$	1,907
Other comprehensive income:
	Change in unrealized gains or losses on available for sale securities, net of related income taxes				$	(688	)		$	577			$	(927	)		$	(323	)
	Less: reclassification adjustment for gains included in net income net of related income taxes					—				—				2				131
	Other comprehensive income (loss)					(688	)			577				(929	)			(454	)
Comprehensive income					$	250			$	1,297			$	691			$	1,453
Basic earnings per share					$	0.42			$	0.30			$	0.73			$	0.80
Diluted earnings per share					$	0.42			$	0.30			$	0.72			$	0.80
Dividends per share					$	—			$	—			$	—			$	—

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					Six Months
					Ended June 30
					2006				2005
					(Dollars in thousands)
Operating activities:
	Net income				$	1,620			$	1,907
	Adjustments to reconcile net income to net cash provided by operating activities:
			Provision for loan losses			150				501
			Depreciation and amortization			374				1,145
			Net amortization on investments			80				111
			Amortization of intangibles			143				133
			Deferred income taxes			(160	)			2,159
			Origination of loans held for sale			(18,428	)			(14,017	)
			Proceeds from sales of loans held for sale			19,308				14,015
			Gain on sale of loans			(431	)			(289	)
			(Gain) on sale of securities			(4	)			(183	)
			(Gain) loss on sale of real estate held for sale			(157	)			6
			Compensation expense for restricted stock			386				103
			Increase in cash surrender value of life insurance Contracts			(182	)			(178	)
			Federal Home Loan Bank stock dividends			(6	)			(120	)
		Changes in:
			Accrued interest receivable			(128	)			(197	)
			Other assets and other liabilities, net			(659	)			456
Net cash provided by operating activities						1,906				5,552
Investing activities:
	Proceeds from maturities of certificates of deposit					—				99
	Purchases of available for sale securities					(2,012	)			(9,786	)
	Proceeds from sales of available for sale securities					2,475				9,015
	Proceeds from maturities of available for sale securities					2,067				7,383
	Proceeds from sales of real estate held for sale					1,828				1,612
	Acquisitions, net					—				357
	Net (increase) decrease in loans					(2,073	)			5,776
	Purchases of bank premises and equipment					(473	)			(2,200	)
Net cash provided by investing activities						1,812				12,256
Financing activities:
	Net (decrease) in deposits					(45,638	)			(9,612	)
	Net change in short-term borrowings					38,098				(1,610	)
	Proceeds from long-term borrowings					5,000				21,405
	Repayments of long-term borrowings					(3,670	)			(13,742	)
	Proceeds from exercise of stock options					357				62
	Dividends paid					—				—
	Purchase of treasury stock					(1,267	)			(2,003	)
Net cash used in financing activities						(7,120	)			(5,500	)
Net increase (decrease) in cash and cash equivalents						(3,402	)			12,308
Cash and cash equivalents — beginning of period						18,258				13,286
Cash and cash equivalents — end of period					$	14,856			$	25,594

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				Six Months
				Ended June 30
				2006				2005
				(Dollars in thousands)
Supplemental disclosure of cash flow information
	Interest paid			$	8,734			$	4,787
	Income taxes paid				290				525
	Real estate acquired in settlement of loans				—				195
	Loans held for sale, transferred to loan portfolio at fair market value				4,792				—
Acquisitions, net:
	Assets acquired:
		Investments						$	(6,561	)
		Loans, net							(12,608	)
		Loans held for sale							(5,047	)
		Interest receivable							(109	)
		Premises and equipment							(2,428	)
		Goodwill							(1,034	)
		Intangibles							(424	)
		Real Estate held for sale							(155	)
		Non-marketable securities							(639	)
		Other assets							(108	)
	Liabilities assumed:
		Deposits							27,757
		Other liabilities							56
	Treasury Stock issued								1,657
Cash received, net of cash paid								$	357

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		Three Months								Six Months
		Ended June 30								Ended June 30
		2006				2005				2006				2005
		(Dollars in thousands, except share and per share data)
Basic:
Net income		$	938			$	720			$	1,620			$	1,907
Average common shares outstanding			2,222,405				2,379,121				2,227,133				2,369,233
Net income per common share — basic		$	.42			$	0.30			$	0.73			$	0.80
Diluted:
Net income		$	938			$	720			$	1,620			$	1,907
Average common shares outstanding			2,222,405				2,379,121				2,227,133				2,369,233
Dilutive potential due to stock options			7,297				5,784				8,407				7,414
Average common shares outstanding			2,229,702				2,384,905				2,235,540				2,376,647
Net income per common share — Diluted		$	0.42			$	0.30			$	0.72			$	0.80

		Certificates of				Long-Term
Years Ending June 30,		Deposit				Borrowings(1)				Total
2007		$	146,588			$	28,041			$	174,629
2008			48,496				21,149				69,645
2009			7,292				10,156				17,448
2010			5,341				165				5,506
2011			4,563				174				4,737
thereafter			—				368				368
Total		$	212,280			$	60,053			$	272,333
Financial instruments whose contract amounts represent credit risk:
Commitment to extend credit										$	56,528
Standby letters of credit											1,372
Total										$	330,233

(1)

Fixed rate callable borrowings are included in the period of their modified duration rather than in the period in which they are due. Borrowings include two fixed rate callable advances of $5 million each that mature in years 2008 and 2016 which are callable within the next 12 months and a variable rate, pre-payable advance of $20 million maturing in fiscal year 2008. Trust preferred debentures of $10 million mature in both 2032 and 2034, but are callable in 2007 and 2009.

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		Continuous Unrealized								Continuous Unrealized
		Losses Existing for Less								Losses Existing Greater
		Than 12 Months								Than 12 Months								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
Description of Securities
U.S. government agencies		$	16,415			$	471			$	57,748			$	2,079			$	74,163			$	2,550
Municipals			2,857				63				19,017				772				21,874				835
Mortgage backed securities			7,741				164				6,766				355				14,507				519
Corporate			—				—				1,920				132				1,920				132
Total temporarily impaired securities		$	27,013			$	698			$	85,451			$	3,338			$	112,464			$	4,036

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										Weighted-
						Weighted-				Average
						Average				Remaining
						Exercise				Contractual				Aggregate
		Shares				Price				Term				Intrinsic Value
Outstanding at January 1, 2006			223,800			$	25.41
Granted			20,000				25.05
Exercised			(15,000	)			23.19
Forfeited			(24,000	)			27.29
Outstanding at June 30, 2006			204,800			$	25.28				6.99			$	1,607,239
Exercisable at June 30, 2006			116,900			$	24.21				5.69			$	853,201

		Six Months Ended June 30
		2006				2005
Expected volatility			10% - 25%				10% - 25%
Weighted-average volatility			17.5%				16%
Expected dividend rate			0%				0%
Expected term			5 years				5 years
Risk-free rate			4.92%				4.27%

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						Weighted-Average
						Grant Date
		Shares				Fair Value
Nonvested at January 1, 2006			120,000			$	26.58
Granted			20,000				25.05
Vested			(30,900	)			24.65
Forfeited			(21,200	)			27.26
Nonvested at June 30, 2006			87,900			$	26.69

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F-56

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F-57

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					2005				2004
					(In thousands, except
					share and per share data)
ASSETS
Cash and due from banks					$	13,566			$	10,760
Interest bearing due from banks and other						4,692				2,526
			Cash and cash equivalents			18,258				13,286
Certificates of deposit						50				149
Investment securities available-for-sale, at fair value						125,190				124,763
Loans, net of allowance for loan losses of $4,486 in 2005 and $5,475 in 2004						428,468				418,963
Loans held for sale						8,373				416
Office properties and equipment						22,579				18,267
Goodwill						14,362				12,446
Life insurance contracts						9,465				9,110
Non-marketable equity securities						5,059				4,211
Accrued interest receivable						3,248				2,570
Intangible assets						1,922				1,774
Real estate held for sale						1,709				3,002
Other assets						2,840				3,026
			Total assets		$	641,523			$	611,983
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
	Deposits
		Noninterest bearing			$	67,982			$	53,919
		Interest bearing				439,934				441,858
			Total deposits			507,916				495,777
	Short-term borrowings					27,014				14,188
	Long-term borrowings					58,723				55,473
	Other liabilities					4,767				3,239
			Total liabilities			598,420				568,677
Commitments and Contingencies (Notes 14 and 15)
Stockholders’ Equity
	Preferred stock, $.01 par value; authorized and unissued, 500,000 shares					—				—
	Common stock, $.01 par value; 5,500,000 shares authorized; 4,200,300 shares issued					42				42
	Additional paid-in capital					30,460				29,222
	Retained income, partially restricted					47,403				43,319
	Accumulated other comprehensive income (loss)					(1,657	)			27
	Treasury stock (1,937,361 and 1,819,634 shares in 2005 and 2004, respectively), at cost					(33,145	)			(29,304	)
			Total stockholders’ equity			43,103				43,306
			Total liabilities and stockholders’ equity		$	641,523			$	611,983

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					2005				2004				2003
					(In thousands, except
					per share data)
Interest and dividend income:
	Loans				$	26,759			$	24,884			$	23,442
	Investment securities:
		Taxable				4,266				3,584				3,466
		Tax exempt				696				597				60
	Deposits with banks and other					198				119				313
	FHLB dividends					177				214				195
			Total interest and dividend income			32,096				29,398				27,476
Interest expense:
	Deposits					9,463				7,807				9,216
	Short-term borrowings					654				115				47
	Long-term borrowings					2,946				2,728				2,733
			Total interest expense			13,063				10,650				11,996
			Net interest income			19,033				18,748				15,480
Provision for loan losses						651				1,200				4,122
			Net interest income after provision for loan losses			18,382				17,548				11,358
Noninterest income:
	Fee income					5,808				4,357				2,874
	Net gain on sales of securities					183				85				8
	Net gain (loss) on sales of real estate held for sale					(23	)			104				253
	Net gain on sales of loans held for sale					603				886				1,271
	Gain on sale of branch					—				—				478
	Increase in cash surrender value of life insurance contracts					355				358				403
	Other					299				217				419
			Total noninterest income			7,225				6,007				5,706
Noninterest expenses:
	Compensation and benefits					10,838				8,943				8,298
	Occupancy					1,638				1,435				1,398
	Furniture and equipment					1,751				1,370				945
	Legal and professional fees					854				670				894
	Telephone and postage					624				611				534
	Data processing services					492				615				514
	Advertising					391				279				440
	Amortization of intangibles					276				229				147
	Other					3,173				2,954				2,753
			Total noninterest expenses			20,037				17,106				15,923
			Income before income taxes			5,570				6,449				1,141
Income taxes						1,486				1,823				106
			Net income		$	4,084			$	4,626			$	1,035
Basic Earnings Per Share					$	1.74			$	1.86			$	0.49
Diluted Earnings Per Share					$	1.73			$	1.85			$	0.49
Dividends Per Share					$	—			$	0.075			$	0.30

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																Accumulated
																Other
								Additional								Comprehensive								Total
				Common				Paid-In				Retained				Income				Treasury				Stockholders’
				Stock				Capital				Income				(Loss)				Stock				Equity
Balance, December 31, 2002 as reported				$	36			$	15,022			$	38,517			$	1,631			$	(14,099	)		$	41,107
Cumulative Effect at January 1, 2003					—				1				(15	)			—				—				(14	)
Balance, December 31, 2002, as adjusted					36				15,023				38,502				1,631				(14,099	)			41,093
Comprehensive income:
	Net income				—				—				1,035				—				—				1,035
	Unrealized gain (loss) on securities available-for-sale arising during the period, net of tax of $(326)				—				—				—				(548	)			—				(548	)
	Less: Reclassifications adjustment for gains included in net income, net of tax of $3				—				—				—				5				—				5
																									(553	)
		Comprehensive income																							492
Purchase of 466,540 shares of treasury stock					—				—				—				—				(9,308	)			(9,308	)
Exercise of stock options					—				20				—				—				182				202
Restricted stock awards					—				(398	)			—				—				398				—
Stock issued in acquisition (700,300 shares)					6				13,465				—				—				—				13,471
Dividends paid on common stock — $.30 per share					—				—				(649	)			—				—				(649	)
APIC — Stock Options					—				396				—				—				—				396
Balance, December 31, 2003					42				28,506				38,888				1,088				(22,827	)			45,697
Comprehensive income:
	Net income				—				—				4,626				—				—				4,626
	Unrealized gain (loss) on securities available-for-sale arising during the period, net of tax of $(530)				—				—				—				(1,114	)			—				(1,114	)
	Less: Reclassifications adjustment for gains included in net income, net of tax of $32				—				—				—				53				—				53
																									(1,061	)
		Comprehensive income																							3,565
Purchase of 232,706 shares of treasury stock					—				—				—				—				(6,514	)			(6,514	)
Exercise of stock options					—				41				—				—				148				189
Restricted stock awards					—				(38	)			—				—				38				—
Forfeit of restricted stock					—				149				—				—				(149	)			—
Amortization of restricted stock awards					—				225				—				—				—				225
Dividends paid on common stock — $.075 per share					—				—				(195	)			—				—				(195	)
APIC — Stock Options					—				339				—				—				—				339
Balance, December 31, 2004					42				29,222				43,319				27				(29,304	)			43,306
Comprehensive income:
	Net income				—				—				4,084				—				—				4,084
	Unrealized (loss) on securities available-for-sale arising during the period, net of tax of $(919)				—				—				—				(1,815	)			—				(1,815	)
	Less: Reclassifications adjustment for gains included in net income, net of tax of $52																131								131
																									(1,684	)
		Comprehensive income																							2,400
Purchase of 178,865 shares of treasury stock					—				—				—				—				(4,817	)			(4,817	)
Stock issued in acquisition (59,638 shares)					—				697				—				—				960				1,657
Issuance of restricted stock					—				(35	)			—				—				35				—
Forfeit of restricted stock					—				19				—				—				(19	)			—
Amortization of restricted stock awards					—				209				—				—				—				209
APIC — Stock Options					—				348				—				—				—				348
Balance, December 31, 2005				$	42			$	30,460			$	47,403			$	(1,657	)		$	(33,145	)		$	43,103

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						2005				2004				2003
						(In thousands)
Cash Flows from Operating Activities
	Net income					$	4,084			$	4,626			$	1,035
	Adjustments to reconcile net income to net cash from operating activities:
		Provision for loan losses					651				1,200				4,122
		Depreciation					2,054				1,722				1,293
		Amortization of investments, net					195				103				179
		Amortization of intangibles					276				229				147
		Amortization of restricted stock					209				225				—
		Deferred income taxes					1,278				1,191				367
		Origination of loans held for sale					(28,751	)			(31,008	)			(56,224	)
		Proceeds from sales of loans held for sale					26,444				51,651				57,623
		Net gain on sales of loans held for sale					(603	)			(886	)			(1,271	)
		Net gain on sales of securities					(183	)			(85	)			(8	)
		Stock options expense					348				356				512
		Net (gain) loss on sales of real estate held for sale					23				(104	)			(253	)
		Gain on sale of branch					—				—				(478	)
		Increase in cash surrender value of life insurance contracts					(355	)			(358	)			(403	)
		Federal Home Loan Bank stock dividend					(209	)			(213	)			(229	)
		Changes in:
			Accrued interest receivable				(569	)			86				559
			Other assets and liabilities, net				1,056				1,584				(2,760	)
				Net cash provided by operating activities			5,948				30,319				4,211
Cash Flow from Investing Activities
	Purchases of available for sale securities						(21,332	)			(88,785	)			(37,784	)
	Proceeds from sales of available for sale securities						13,698				5,943				96
	Proceeds from maturities of available for sale securities						11,207				52,148				47,226
	Proceeds from maturities of held-to-maturity securities						—				242				201
	Proceeds from maturities of certificates of deposit						99				199				—
	Proceeds from sales of real estate held for sale						2,581				648				678
	Proceeds from sales of office properties and equipment						15				—				—
	Cash paid for branch sale						—				—				(12,315	)
	Cash acquired, net of cash (paid) for acquisitions						(228	)			38				2,984
	Net (increase) decrease in loans						1,296				(10,205	)			19,547
	Purchases of office properties and equipment, net						(3,953	)			(2,607	)			(6,767	)
				Net cash from investing activities			3,383				(42,379	)			13,866
Cash Flows from Financing Activities
	Net increase (decrease) in deposit accounts						(15,618	)			(19,004	)			1,355
	Proceeds from long-term borrowings						44,360				14,000				104
	Repayments of long-term borrowings						(41,110	)			(21,475	)			(12,400	)
	Change in short-term borrowings						12,826				12,740				798
	Proceeds from exercise of stock options						—				189				202
	Dividends paid						—				(195	)			(649	)
	Purchase of treasury stock						(4,817	)			(6,514	)			(9,308	)
			Net cash from financing activities				4,359				(20,259	)			(19,898	)
			Increase (decrease) in cash and cash equivalents				4,972				(32,319	)			(1,821	)
Cash and cash equivalents:
	Beginning of year						13,286				45,605				47,426
	End of year					$	18,258			$	13,286			$	45,605
Supplemental Disclosures of Cash Flow Information Cash paid during the year for:
		Interest				$	11,616			$	10,651			$	12,017
		Income taxes				$	1,108			$	1,478			$	1,104
Supplemental Disclosures of Noncash Investing Activities:
	Real estate acquired through foreclosure					$	1,156			$	3,254			$	428

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					2005				2004				2003
					(In thousands)
Sale of Hoopeston Branch:
	Assets disposed:
		Loans			$	—			$	—			$	(6,370	)
		Accrued interest receivable				—				—				(24	)
		Premises and equipment				—				—				(165	)
		Other assets				—				—				(197	)
	Liabilities assumed by buyer:
		Demand deposits				—				—				2,162
		Certificates of deposit				—				—				17,243
		Other liabilities				—				—				144
	Gain on sale of branch					—				—				(478	)
Cash paid					$	—			$	—			$	12,315
Acquisitions:
	Cash paid				$	1,658			$	4,400			$	—
	Stock issued					1,657				—				13,471
	Cost incurred					744				123				601
			Total cost		$	4,059			$	4,523			$	14,072
	Assets acquired:
		Cash and cash equivalents			$	2,174			$	4,561			$	2,984
		Certificates of deposit				—				298				—
		Investments				6,561				8,616				15,355
		Nonmarketable equity securities				639				85				329
		Loans				12,608				7,342				72,068
		Loans held for sale				5,047				—				—
		Accrued interest receivable				109				104				339
		Office properties and equipment				2,428				269				1,426
		Other assets, including deferred taxes				(189	)			72				—
		Real estate held for sale				155				—				—
		Goodwill				1,916				1,013				8,367
		Intangible assets				424				774				358
	Liabilities assumed:
		Deposits				(27,757	)			(18,524	)			(80,588	)
		Borrowings				—				—				(6,194	)
		Other liabilities				(56	)			(87	)			(372	)
			Net assets acquired		$	4,059			$	4,523			$	14,072
			Cash acquired, net of cash (paid)		$	(228	)		$	38			$	2,984

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Note 1.	Summary of Significant Accounting Policies

	Nature of Operations

	Basis of Consolidation

	Industry Segment Information

	Use of Estimates

	Comprehensive Income

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	Cash and Cash Equivalents

	Securities

	Loans

	Loans Held for Sale

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	Allowance for Loan Losses

	Real Estate Held for Sale

	Office Properties and Equipment

	Non-Marketable Equity Securities

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	Intangible Assets

	Goodwill

	Loan Servicing

	Income Taxes

	Earnings Per Share

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			December 31,
			2005				2004				2003
Net income available to common shareholders			$	4,084,000			$	4,626,000			$	1,035,000
Basic average shares outstanding				2,345,971				2,490,789				2,098,386
Diluted potential common shares:
	Stock option equivalents			9,413				11,847				2,891
Diluted average shares outstanding				2,355,384				2,502,636				2,101,277
Basic earnings per share			$	1.74			$	1.86			$	0.49
Diluted earnings per share			$	1.73			$	1.85			$	0.49

	Stock-Based Employee Compensation

	Reclassification

Note 2.	Business Acquisitions

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Note 3.	Goodwill and Intangible Assets

				As of December 31, 2005
				Gross Carrying				Accumulated
				Amount				Amortization
				(In thousands)
Amortized intangible assets:
	Core deposit intangible			$	3,414			$	1,492
Aggregate amortization expense:
	For the year ended December 31, 2005			$	276
Estimated amortization expense:
	For the year ended:
		2006		$	278
		2007		$	278
		2008		$	278
		2009		$	278
		2010		$	278
		Thereafter		$	532

		Year Ended
		December 31,
		2005				2004
Balance, at beginning of year		$	12,446			$	11,433
Goodwill acquired			1,916				1,013
Balance, at end of year		$	14,362			$	12,446

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Note 4.	Investment Securities

							Gross				Gross
			Amortized				Unrealized				Unrealized
			Cost				Gains				Losses				Fair Value
			(In thousands)
December 31, 2005
U.S. government and agency securities			$	77,924			$	1			$	1,562			$	76,363
Municipal bonds				23,492				5				756				22,741
Mortgage-backed securities				19,211				111				267				19,055
Corporate bonds				2,060				—				111				1,949
Mutual funds and equity securities				779				29				—				808
Other securities				4,250				24				—				4,274
	Total		$	127,716			$	170			$	2,696			$	125,190
December 31, 2004
U.S. government and agency securities			$	70,944			$	263			$	58			$	71,149
Municipal bonds				23,582				47				278				23,351
Mortgage-backed securities				23,396				291				157				23,530
Corporate bonds				2,076				—				76				2,000
Mutual funds				400				—				15				385
Other securities				4,320				28				—				4,348
	Total		$	124,718			$	629			$	584			$	124,763

			Amortized				Fair
			Cost				Value
			(In thousands)
Due within 1 year			$	3,579			$	3,547
Due after 1 year through 5 years				83,498				81,713
Due after 5 through 10 years				16,399				15,793
Due after 10 years				4,250				4,274
Mortgage-backed securities				19,211				19,055
Mutual fund shares and equity securities				779				808
	Total		$	127,716			$	125,190

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		December 31, 2005
		Less Than 12 Months								12 Months or More								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
		(In thousands)
U.S. government and agency securities		$	49,408			$	957			$	26,704			$	605			$	76,112			$	1,562
Municipal bonds			4,643				75				17,081				681				21,724				756
Mortgage-backed securities			4,478				44				5,983				223				10,461				267
Corporate bonds			—				—				1,949				111				1,949				111
		$	58,529			$	1,076			$	51,717			$	1,620			$	110,246			$	2,696

		December 31, 2004
		Less Than 12 Months								12 Months or More								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
		(In thousands)
U.S. government and agency securities		$	30,342			$	58			$	—			$	—			$	30,342			$	58
Municipal bonds			17,259				277				528				1				17,787				278
Mortgage-backed securities			5,312				104				4,343				53				9,655				157
Corporate bonds			1,999				76				—				—				1,999				76
Mutual funds			—				—				385				15				385				15
		$	54,912			$	515			$	5,256			$	69			$	60,168			$	584

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			Year Ended
			December 31,
			2005				2004				2003
			(In thousands)
Realized gains			$	198			$	90			$	8
Realized losses				(15	)			(5	)			—
	Net gain		$	183			$	85			$	8

Note 5.	Loans

			December 31,
			2005				2004
			(In thousands)
Real estate mortgage loans:
	One-to-four family		$	162,430			$	175,224
	Multifamily			8,274				15,655
	Commercial			131,365				101,516
	Construction and development			34,274				28,731
				336,343				321,126
Commercial loans				57,864				61,090
Consumer loans:
	Home equity loans			30,138				28,188
	All other consumer loans			8,853				14,303
				38,991				42,491
Gross loans				433,198				424,707
Less:
	Deferred loan fees, net			244				269
	Allowance for loan losses			4,486				5,475
			$	428,468			$	418,963

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			Year Ended December 31,
			2005				2004				2003
			(In thousands)
Balance at beginning of year			$	5,475			$	7,471			$	6,524
	Provision for loan losses			651				1,200				4,122
	Purchased allowance			255				156				2,435
	Charge-offs			(2,717	)			(3,647	)			(6,242	)
	Recoveries			822				295				632
Balance at end of year			$	4,486			$	5,475			$	7,471

			December 31,
			2005				2004				2003
			(In thousands)
Impaired loans with a valuation allowance			$	3,894			$	4,934			$	4,545
Impaired loans without a valuation allowance				1,096				906				—
	Total impaired loans		$	4,990			$	5,840			$	4,545
Related valuation allowance			$	851			$	1,348			$	2,524
Non-accrual loans, excluding impaired loans			$	1,676			$	1,176			$	1,438
Loans past due ninety days or more and still accruing interest			$	—			$	222			$	2,232
Average monthly balance of impaired loans (based on month-end balances)			$	4,574			$	6,512			$	5,097
Interest income recognized on impaired loans			$	—			$	—			$	199
Interest income recognized on a cash basis on impaired loans			$	—			$	—			$	199

Note 6.	Loan Servicing

			December 31,
			2005				2004
			(In thousands)
Mortgage loan portfolios serviced for:
	Freddie Mac		$	148,293			$	136,433
	Fannie Mae			933				1,383
			$	149,226			$	137,816

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		December 31,
		2005				2004
		(In thousands)
Balance, beginning		$	1,056			$	822
Servicing assets recognized during the year			305				372
Amortization of servicing assets			(263	)			(138	)
Balance, ending		$	1,098			$	1,056

		December 31,
		2005				2004
		(In thousands)
Balance, beginning		$	156			$	206
Additions			—				—
Reductions			—				(50	)
Balance, ending		$	156			$	156

Note 7.	Office Properties and Equipment

		December 31,
		2005				2004
		(In thousands)
Land		$	6,159			$	6,110
Buildings and improvements			19,181				12,445
Construction in progress			—				2,179
Furniture and equipment			5,779				9,561
			31,119				30,295
Less: Accumulated depreciation and amortization			8,540				12,028
		$	22,579			$	18,267

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Note 8.	Lease Commitments and Total Rental Expense

During the Year Ending December 31:
2006		$	147
2007			153
2008			128
2009			43
Thereafter			23
		$	494

Note 9.	Deposits

			December 31,
			2005				2004
			(In thousands)
Demand deposits — noninterest bearing			$	67,982			$	53,919
Savings				88,134				87,990
NOW				41,081				48,495
Money market				55,788				46,886
Time deposits, $100,000 or more				73,017				61,274
Other time deposits				181,914				197,213
	Interest bearing deposits			439,934				441,858
	Total deposits		$	507,916			$	495,777

		Amount
		(In thousands)
Year of Maturity
2006		$	167,991
2007			61,937
2008			14,172
2009			5,101
2010			5,730
		$	254,931

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Note 10.	Short-Term Borrowings

			December 31,
			2005				2004
			(In thousands)
Federal funds purchased			$	—			$	3,500
Securities sold under repurchase agreements				16,314				8,563
Federal Home Loan Bank line of credit				10,700				—
Line of credit				—				2,125
	Total short-term borrowings		$	27,014			$	14,188

Note 11.	Long Term Borrowings

			December 31,
			2005				2004
			(In thousands)
Reverse repurchase agreements			$	—			$	9,200
Other borrowings				1,157				1,318
Junior subordinated debt owed to unconsolidated trusts				20,000				20,000
Federal Home Loan Bank advances				37,566				24,955
	Total long-term borrowings		$	58,723			$	55,473

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			Amount
			(In thousands)
Year Ended
2006			$	9,341
2007				31,449
2008				5,156
2009				10,165
2010				174
Thereafter				2,438
	Total		$	58,723

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Note 12.	Income Taxes

		Year Ended December 31,
		2005				2004				2003
		(In thousands)
Current		$	208			$	632			$	(261	)
Deferred			1,278				1,191				367
		$	1,486			$	1,823			$	106

			Year Ended December 31,
			2005				2004				2003
			(In thousands)
Expected income taxes			$	1,950			$	2,257			$	400
Income tax effect of:
	State income tax, net of federal benefit			112				—				—
	Income taxed at lower rate			(56	)			(65	)			(11	)
	Increase in cash surrender value of life insurance			(124	)			(125	)			(137	)
	Tax exempt interest, net			(284	)			(237	)			(80	)
	Reduction in valuation allowance for deferred taxes			—				(169	)			—
	Other			(112	)			162				(66	)
			$	1,486			$	1,823			$	106

				December 31,
				2005				2004
				(In thousands)
Deferred tax assets:
	Allowance for loan losses			$	1,930			$	2,075
	State net operating loss carryforwards				390				245
	Federal net operating loss carryforwards				963				691
	Accrued benefits				144				204
	Unrealized losses on securities available for sale				852				—
	Other				92				197
		Total deferred tax assets			4,371				3,412
	Less: Valuation allowance for deferred tax assets				1,207				—
		Total deferred tax assets, net of valuation allowance			3,164				3,412

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				December 31,
				2005				2004
				(In thousands)
Deferred tax liabilities:
	Unrealized gain on securities available-for-sale				—				(13	)
	Deferred loan fees				(313	)			(344	)
	FHLB stock divided				(531	)			(386	)
	Office properties and equipment				(759	)			(467	)
	Mortgage servicing rights				(366	)			(350	)
	Intangible assets				(975	)			(501	)
	Basis in acquired assets				(420	)			(193	)
		Total deferred tax liabilities			(3,364	)			(2,254	)
		Net deferred tax assets (liabilities)		$	(200	)		$	1,158

Note 13.	Stockholders’ Equity and Regulatory Capital

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																			To be Well
																			Capitalized Under
											For Capital								Prompt Corrective
			Actual								Adequacy Purposes								Action Provisions
			Amount				Ratio				Amount				Ratio				Amount				Ratio
			(Dollars in thousands)
As of December 31, 2005
Tier 1 Capital to Average Assets
	Centrue Financial		$	43,261				6.93%			$	24,967				4.00%				N/A
	Centrue Bank			43,773				7.08%				24,733				4.00%			$	30,917				5.00%
Tier I Capital to Risk Weighted Assets
	Centrue Financial			43,261				10.25%				16,796				4.00%				N/A
	Centrue Bank			43,773				10.49%				16,696				4.00%				25,044				6.00%
Total Capital to Risk Weighted Assets
	Centrue Financial			52,882				12.53%				33,593				8.00%				N/A
	Centrue Bank			48,259				11.56%				33,391				8.00%				41,739				10.00%
As of December 31, 2004
Tier 1 Capital to Average Assets
	Centrue Financial		$	43,344				7.32%			$	23,674				4.00%				N/A
	Centrue Bank			45,656				7.81%				23,382				4.00%			$	29,227				5.00%
Tier I Capital to Risk Weighted Assets
	Centrue Financial			43,344				11.01%				15,742				4.00%				N/A
	Centrue Bank			45,656				11.32%				16,136				4.00%				24,204				6.00%
Total Capital to Risk Weighted Assets
	Centrue Financial			53,889				13.69%				31,483				8.00%				N/A
	Centrue Bank			50,703				12.57%				32,272				8.00%				40,340				10.00%

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Note 14.	Officer, Director and Employee Plans

	401(k) Savings Plan

	Stock Option Plan

		Year Ended December 31,
		2005				2004				2003
Income before income taxes, as originally reported		$	5,918			$	6,805			$	1,653
Stock-based compensation expense under fair value method			(348	)			(356	)			(512	)
Income before income taxes, restated			5,570				6,449				1,141
Net income, as originally reported		$	4,380			$	4,889			$	1,363
Stock-based compensation expense under fair value			(296	)			(263	)			(328	)
Net income, restated			4,084				4,626				1,035
Net income per share (basic), as originally reported			1.87				1.96				.65
Net income per share (basic), as originally reported			1.74				1.86				.49
Net income per share (diluted), as originally reported			1.86				1.95				.65
Net income per share (diluted), as originally reported			1.73				1.85				.49

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										Weighted
						Weighted				Average
						Average				Remaining				Aggregate
		Shares				Exercise Price				Contractual Term				Intrinsic Value
Fixed Options
Outstanding at January 1, 2005			147,300			$	24.720
Granted			78,000				27.234
Exercised			—				—
Forfeited			(1,500	)			26.967
Outstanding at December 31, 2005			223,800				25.405				7.5			$	1,717,264
Options exercisable at December 31, 2005			103,800				24.048				5.9			$	716,201

		2005				2004				2003
Number of options granted			78,000				65,500				107,000
Risk-free interest rate			4.02%-4.38%				4.04%-4.45%				3.41%-4.27%
Expected life, in years			5				10				5-10
Expected volatility			16%-17%				22%-23	%			22%-25%
Expected dividend yield			0.00%				0.00%-1.25%				1.14%-1.29%
Estimated weighted average fair value per option			$6.80				$11.71				$9.70

						Weighted-Average
						Grant Date
		Shares				Fair Value
Nonvested at January 1, 2005			81,500			$	24.72
Granted			78,000				27.23
Vested			(38,000	)			26.77
Forfeited			(1,500	)			26.97
Nonvested at December 31, 2005			120,000			$	26.58

	Stockholders’ Rights Plan

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	Restricted Stock Awards

		Number of Shares
		2005				2004				2003
Under restriction, beginning of year			19,750				27,800				—
Granted			2,200				2,400				27,800
Restrictions released			(6,450	)			(5,400	)			—
Forfeited and reissuable			(750	)			(5,050	)			—
Under restriction, end of year			14,750				19,750				27,800

	Directors’ Deferred Compensation Plan

Note 15.	Commitments and Contingencies

Note 16.	Financial Instruments

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		December 31,
		2005				2004
		(In thousands)
Commitments to originate new loans		$	3,787			$	10,694
Commitments to extend credit			56,873				48,121
Standby letters of credit			4,508				2,750

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Note 17.	Fair Value of Financial Instruments

			December 31,
			2005								2004
			Carrying								Carrying
			Amount				Fair Value				Amount				Fair Value
			(In thousands)
Assets:
	Cash and cash equivalents		$	18,258			$	18,258			$	13,286			$	13,286
	Certificates of deposit			50				50				149				149
	Investment securities			125,190				125,190				124,763				124,763
	Loans, gross			432,954				427,330				424,438				428,198
	Loans held for sale			8,373				8,373				416				416
	Nonmarketable equity securities			5,059				5,059				4,211				4,211
	Accrued interest receivable			3,248				3,248				2,570				2,570
Liabilities:
	Deposits		$	507,916			$	508,465			$	495,777			$	497,657
	Short-term borrowings			27,014				27,014				14,188				14,188
	Long-term borrowings			58,723				58,522				55,473				55,725
	Accrued interest payable			2,035				2,035				568				568

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Note 18.	Sale of Branch

Note 19.	Condensed Parent Company Only Financial Statements

			December 31,
			2005				2004
			(In thousands)
Statements of financial condition
Assets:
	Cash and cash equivalents		$	1,514			$	370
	Certificate of deposit			50				50
	Investment securities available-for-sale			4,787				6,450
	Equity in net assets of Centrue Bank			58,463				59,916
	Investment in Capital Trusts			620				620
	Other assets			1,118				1,233
			$	66,552			$	68,639
Liabilities and stockholders’ equity:
	Long-term borrowings		$	21,157			$	23,443
	Other liabilities			2,292				1,890
	Common stock			42				42
	Additional paid-in capital			30,460				29,222
	Retained income			47,403				43,319
	Accumulated other comprehensive income (loss)			(1,657	)			27
	Treasury stock			(33,145	)			(29,304	)
			$	66,552			$	68,639

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					Years Ended December 31,
					2005				2004				2003
					(In thousands)
Statements of income
Operating income:
	Equity in net income of subsidiary				$	5,791			$	5,867			$	2,309
	Interest income					249				198				41
	Net gain (loss) on sale of securities					(15	)			(5	)			8
		Operating income				6,025				6,060				2,358
Operating expense:
	Interest expense					1,480				1,057				611
	Other expenses					1,411				1,095				1,495
		Operating expense				2,891				2,152				2,106
			Income before income tax benefit			3,134				3,908				252
	Income tax benefit					950				718				783
			Net income		$	4,084			$	4,626			$	1,035

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					Years Ended December 31,
					2005				2004				2003
					(In thousands)
Statements of cash flows
Operating activities:
	Net income				$	4,084			$	4,626			$	1,035
	Adjustments to reconcile net income to net cash provided by operating activities:
		(Gain) loss on sale of securities				15				5				(8	)
		Distributions in excess of (less than) net income of subsidiary				4,566				(3,271	)			(415	)
		Compensation expense for restricted stock				209				225				—
		Stock option expense				348				356				512
		Other				527				270				(956	)
			Net cash provided by operating activities			9,749				2,211				168
Investing activities:
	Available-for-sale investment securities:
		Proceeds from sale of securities				1,984				1,996				96
		Purchases				(315	)			(8,996	)			(14	)
		Maturities of securities				—				1,000				—
	Acquisitions					(3,171	)			—				20
			Net cash provided by (used in) investing activities			(1,502	)			(6,000	)			102
Financing activities:
	Purchase of treasury stock					(4,817	)			(6,514	)			(9,308	)
	Dividends paid					—				(195	)			(649	)
	Proceeds from issuance of junior subordinated debentures					—				10,000				—
	Proceeds from borrowings					—				2,603				933
	Payments on borrowings					(2,286	)			(2,000	)			(100	)
	Proceeds from exercise of stock options					—				189				202
			Net cash provided by (used in) financing activities			(7,103	)			4,083				(8,922	)
Increase (decrease) in cash and cash equivalents						1,144				294				(8,652	)
Cash and cash equivalents:
	Beginning of period					370				76				8,728
	End of period				$	1,514			$	370			$	76

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			Year Ended December 31, 2005
			Three Months Ended
			December 31				September 30				June 30				March 31
			(In thousands, except per share data)
Interest income			$	8,430			$	8,270			$	7,987			$	7,409
Interest expense				3,716				3,533				3,090				2,724
	Net interest income			4,714				4,737				4,897				4,685
Provision for loan losses				75				75				251				250
	Net interest income after provision for loan losses			4,639				4,662				4,646				4,435
Other income				1,935				2,018				1,707				1,565
Other expense				5,217				5,039				5,457				4,324
	Income before income taxes			1,357				1,641				896				1,676
Income taxes				342				480				176				488
	Net income		$	1,015			$	1,161			$	720			$	1,188
Basic earnings per share			$	0.45			$	0.49			$	0.30			$	0.50
Diluted earnings per share			$	0.44			$	0.49			$	0.30			$	0.50

			Year Ended December 31, 2004
			Three Months Ended
			December 31				September 30				June 30				March 31
			(In thousands, except per share data)
Interest income			$	7,402			$	7,358			$	7,273			$	7,365
Interest expense				2,653				2,602				2,603				2,792
	Net interest income			4,749				4,756				4,670				4,573
Provision for loan losses				300				300				300				300
	Net interest income after provision for loan losses			4,449				4,456				4,370				4,273
Other income				1,666				1,589				1,503				1,249
Other expense				3,984				4,374				4,375				4,373
	Income before income taxes			2,131				1,671				1,498				1,149
Income taxes				502				477				501				343
	Net income		$	1,629			$	1,194			$	997			$	806
Basic earnings per share			$	0.67			$	0.49			$	0.39			$	0.31
Diluted earnings per share			$	0.67			$	0.48			$	0.39			$	0.31

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(i) a particular individual: (A) each other member of such individual’s Family; (B) any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family; (C) any Person in which such individual or members of such individual’s Family hold (individually or in the aggregate) a Material Interest; and (D) any Person with respect to which such individual or one or

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	more members of such individual’s Family serves as a director, officer, partner, executor or trustee (or in a similar capacity); and
	(ii) a specified Person other than an individual: (A) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person; (B) any Person that holds a Material Interest in such specified Person; (C) each Person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity); (D) any Person in which such specified Person holds a Material Interest; (E) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and (F) any Affiliate of any individual described in clause (B) or (C) of this subsection (ii).

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	(i) an individual means that such person will be deemed to have “Knowledge” of a particular fact or other matter if: (A) such individual is actually aware of such fact or other matter; or (B) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter; and
	(ii) a Person (other than an individual) means that such Person will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving as a director, officer, manager, partner, executor or trustee of such Person (or in any similar capacity) has Knowledge of such fact or other matter.

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	(i) is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;
	(ii) is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority), other than loan approvals for customers of a financial institution; and
	(iii) is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), other than loan approvals for customers of a financial institution, in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

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	(a) evidence of the delivery by Union or its agents to the Exchange Agent (as defined below) of: (i) certificates representing the number of shares of Union Common Stock to be issued in exchange for the shares of Centrue Common Stock pursuant to the terms of this Agreement; and (ii) an aggregate amount of cash equal to the total fractional shares of Union Common Stock that former holders of Centrue Common Stock would be entitled to receive;
	(b) a good standing certificate for Union issued by the Secretary of State of each of the States of Delaware and Illinois, and dated in each case not more than ten Business Days prior to the Closing Date;
	(c) a copy of the certificate of incorporation of Union certified not more than ten Business Days prior to the Closing Date by the Secretary of State of the State of Delaware;
	(d) a certificate of the Secretary or any Assistant Secretary of Union dated the Closing Date certifying a copy of the bylaws of Union;
	(e) copies of resolutions of the board of directors and stockholders of Union authorizing and approving this Agreement and the consummation of the Contemplated Transactions certified as of the Closing Date by the Secretary or any Assistant Secretary of Union;
	(f) a good standing certificate for UnionBank issued by the Department and dated not more than ten Business Days prior to the Closing Date;
	(g) a copy of the charter of UnionBank certified by the Department and dated not more than ten Business Days prior to the Closing Date;
	(h) a certificate of the Secretary of UnionBank dated the Closing Date certifying a copy of the bylaws of UnionBank and stating that there have been no further amendments to the charter of UnionBank delivered pursuant to the immediately preceding paragraph of this Section;
	(i) a certificate executed by Union dated the Closing Date stating that: (i) all of the representations and warranties of Union set forth in this Agreement, when read without regard to any qualification as to materiality or Material Adverse Effect contained therein, are true and correct with the same force and effect as if all of such representations and warranties were made at the Closing Date (provided, however, that to the extent such representations and warranties expressly relate to an earlier date, such representations and warranties shall be true and correct on and as of such earlier date), except for any untrue or incorrect representations or warranties that individually or in the aggregate do not have a Material Adverse Effect on Union on a consolidated basis or on Centrue’s or its stockholders’ rights or interests under this Agreement; and (ii) all of the covenants and obligations to be performed or complied with by Union under the terms of this Agreement on or prior to the Closing Date, when read without regard to any qualification as to materiality or Material Adverse Effect contained therein, have been performed or complied with by Union, except where any non-performance or noncompliance would not have a Material Adverse Effect on Union on a consolidated basis or on Centrue’s or its stockholders’ rights or interests under this Agreement; and
	(j) a copy of the tax opinion described in Section 10.10.

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	(a) a good standing certificate for Centrue issued by the Secretary of State of each of the States of Delaware and Illinois, and dated in each case not more than ten Business Days prior to the Closing Date;
	(b) a copy of the certificate of incorporation of Centrue certified not more than ten Business Days prior to the Closing Date by the Secretary of State of the State of Delaware;
	(c) a certificate of the Secretary or any Assistant Secretary of Centrue dated the Closing Date certifying a copy of the bylaws of Centrue;
	(d) copies of resolutions of the board of directors and stockholders of Centrue authorizing and approving this Agreement and the consummation of the Contemplated Transactions certified as of the Closing Date by the Secretary or any Assistant Secretary of Centrue;
	(e) a good standing certificate for Centrue Bank issued by the Department and dated not more than ten Business Days prior to the Closing Date;
	(f) a copy of the charter of Centrue Bank certified by the Department and dated not more than ten Business Days prior to the Closing Date;
	(g) a certificate of the Secretary of Centrue Bank dated the Closing Date certifying a copy of the bylaws of Centrue Bank and stating that there have been no further amendments to the charter of Centrue Bank delivered pursuant to the immediately preceding paragraph of this Section;
	(h) a certificate executed by Centrue dated the Closing Date stating that: (i) all of the representations and warranties of Centrue set forth in this Agreement, when read without regard to any qualification as to materiality or material Adverse Effect contained therein, are true and correct with the same force and effect as if all of such representations and warranties were made at the Closing Date (provided, however, that to the extent such representations and warranties expressly relate to an earlier date, such representations and warranties shall be true and correct on and as of such earlier date), except for any untrue or incorrect representations or warranties that individually or in the aggregate do not have a Material Adverse Effect on Centrue on a consolidated basis or on Union’s or its stockholders’ rights or interests under this Agreement; and (ii) all of the covenants and obligations to be performed or complied with by Centrue under the terms of this Agreement on or prior to the Closing Date, when read without regard to any qualification as to materiality or Material Adverse Effect contained therein, have been performed or complied with by Centrue, except where any non-performance or noncompliance would not have a Material Adverse Effect on Centrue on a consolidated basis or on Union’s or its stockholders’ rights or interests under this Agreement; and
	(i) a list of all holders of Centrue Common Stock as of the Closing Date and a list of all Persons as of the Closing Date who, to the Knowledge of Centrue, have the right at any time to acquire shares of Centrue Common Stock, certified in each case by the Secretary or any Assistant Secretary of Centrue;
	(j) a copy of the tax opinion described in Section 10.10; and
	(k) such other documents as Union may reasonably request.

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	(a) respectively, to cause the board of directors of each of Centrue Bank and UnionBank to approve the Bank Merger and to submit the same to its respective sole stockholder for approval;
	(b) respectively, to vote the shares of stock of Centrue Bank and UnionBank owned by them in favor of the Bank Merger; and
	(c) to take, or cause to be taken, all steps necessary to consummate the Bank Merger at the Effective Time or as soon thereafter as is reasonably practicable.

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	(i) the number of shares of Union Common Stock to be subject to each Centrue Converted Stock Option shall be equal to the product of the number of shares of Centrue Common Stock subject to the original option and the Exchange Ratio, provided that any fractional shares of Union Common Stock shall be rounded up to the next highest whole share; and
	(ii) the exercise price per share of Union Common Stock under the Centrue Converted Stock Option shall be equal to the exercise price per share of Centrue Common Stock under the original option divided by the Exchange Ratio, provided that such exercise price shall be rounded to the nearest whole cent;

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	(a) audited Consolidated Balance Sheets for Centrue as of December 31, 2003, 2004 and 2005, and the related Consolidated Statements of Income and Comprehensive Income, Consolidated Statements of

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	Cash Flows and Consolidated Statements of Stockholders’ Equity of Centrue for the years ended December 31, 2003, 2004 and 2005;
	(b) unaudited Consolidated Balance Sheet for Centrue as of March 31, 2006, and the related unaudited Consolidated Statement of Income and Comprehensive Income and Consolidated Statement of Cash Flows for the three months ended March 31, 2006; and
	(c) Call Reports for Centrue Bank as of the close of business on December 31, 2003, 2004 and 2005, and on March 31, 2006.

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	(a) change in its authorized or issued capital stock; grant of any stock option or right to purchase shares of its capital stock; issuance of any security convertible into such capital stock or evidences of indebtedness (except in connection with customer deposits); grant of any registration rights; purchase, redemption, retirement or other acquisition by it of any shares of any such capital stock; or declaration or payment of any dividend or other distribution or payment in respect of shares of its capital stock;
	(b) amendment to its certificate of incorporation or charter (or similar organizational documents) or bylaws or adoption of any resolutions by its board of directors or stockholders with respect to the same;
	(c) payment or increase of any bonus, salary or other compensation to any of its stockholders, directors, officers or employees, except, with respect to employees, for normal salary and bonus increases made in the Ordinary Course of Business or made in accordance with any then existing Centrue Employee Benefit Plan (as defined below), or entry by it into any employment, consulting, non-competition, change in control, severance or similar Contract with any stockholder, director, officer or employee;
	(d) adoption, amendment (except for any amendment necessary to comply with any Legal Requirement) or termination of, or increase in the payments to or benefits under, any Centrue Employee Benefit Plan;
	(e) damage to or destruction or loss of any of its assets or property, whether or not covered by insurance and where the resulting diminution in value individually or in the aggregate was greater than $100,000;
	(f) entry into, termination or extension of, or receipt of notice of termination of any joint venture or similar agreement pursuant to any Contract or any similar transaction;
	(g) except for this Agreement, entry into any new, or modification, amendment, renewal or extension (through action or inaction) of the terms of any existing lease, Contract or license that has a term of more than one year or that involves the payment by Centrue or any Centrue Subsidiary of more than $100,000 in the aggregate;
	(h) Centrue Loan or commitment to make any Centrue Loan other than in the Ordinary Course of Business;
	(i) Centrue Loan or commitment to make, renew, extend the term or increase the amount of any Loan to any Person if such Centrue Loan or any other Centrue Loans to such Person or an Affiliate of such Person is on the “watch list” or similar internal report of Centrue or any Centrue Subsidiary, or has been classified as “substandard,” “doubtful,” “loss,” or “other loans specially mentioned” or listed as a “potential problem loan”; provided, however, that nothing in this Section 4.17(i) shall prohibit Centrue or any Centrue Subsidiary from honoring any contractual obligation in existence on the date of this Agreement;
	(j) sale (other than any sale in the Ordinary Course of Business), lease or other disposition of any of its assets or properties or mortgage, pledge or imposition of any lien or other encumbrance upon any of its material assets or properties except for Tax and other liens that arise by operation of law and with respect to which payment is not past due and except for pledges or liens: (i) required to be granted in

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	connection with the acceptance by Centrue Bank of government deposits; (ii) granted in connection with repurchase or reverse repurchase agreements; or (iii) otherwise incurred in the Ordinary Course of Business;
	(k) incurrence by it of any obligation or liability (fixed or contingent) other than in the Ordinary Course of Business;
	(l) cancellation or waiver by it of any claims or rights with a value in excess of $100,000;
	(m) aggregate investments by it of a capital nature exceeding $100,000;
	(n) except for the Contemplated Transactions, merger or consolidation with or into any other Person, or acquisition of any stock, equity interest or business of any other Person;
	(o) transaction for the borrowing or loaning of monies, or any increase in any outstanding indebtedness, other than in the Ordinary Course of Business;
	(p) material change in any policies and practices with respect to liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and Tax planning, accounting or any other material aspect of its business or operations, except for such changes as may be required in the opinion of the management of Centrue to respond to then current market or economic conditions or as may be required by any Regulatory Authorities;
	(q) filing of any applications for additional branches, opening of any new office or branch, closing of any current office or branch or relocation of operations from existing locations;
	(r) discharge or satisfaction of any material lien or encumbrance on its assets or repayment of any material indebtedness for borrowed money, except for obligations incurred and repaid in the Ordinary Course of Business;
	(s) entry into any Contract or agreement to buy, sell, exchange or otherwise deal in any assets or series of assets in a single transaction in excess of $100,000 in aggregate value, except for sales of Centrue “other real estate owned” and other repossessed properties or the acceptance of a deed in lieu of foreclosure;
	(t) purchase or other acquisition of any investments, direct or indirect, in any derivative securities, financial futures or commodities or entry into any interest rate swap, floors and option agreements or other similar interest rate management agreements;
	(u) hiring of any employee with an annual salary in excess of $100,000, except for employees at will who are hired to replace employees who have resigned or whose employment has otherwise been terminated; or
	(v) agreement, whether oral or written, by it to do any of the foregoing.

	(a) all real property owned by Centrue and each Centrue Subsidiary and the principal buildings and structures located thereon, together with the address of such real estate, and each lease of real property to which Centrue and each Centrue Subsidiary is a party, identifying the parties thereto, the annual rental payable, the expiration date thereof and a brief description of the property covered, and in each case of either owned or leased real property, the proper identification, if applicable, of each such property as a branch or main office or other office of Centrue or such Centrue Subsidiary;
	(b) all loan and credit agreements, conditional sales contracts or other title retention agreements or security agreements relating to money borrowed by Centrue or any Centrue Subsidiary, exclusive of deposit agreements with customers of Centrue Bank entered into in the Ordinary Course of Business, agreements for the purchase of federal funds and repurchase agreements;

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	(c) each Contract that involves the performance of services or delivery of goods or materials by Centrue or any Centrue Subsidiary of an amount or value in excess of $100,000;
	(d) each Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of Centrue or any Centrue Subsidiary in excess of $100,000;
	(e) each Contract not referred to elsewhere in this Section that:

	(i) relates to the future purchase of goods or services that materially exceeds the requirements of its respective business at current levels or for normal operating purposes; or
	(ii) materially affects the business or financial condition of Centrue or any Centrue Subsidiary;

	(f) each lease, rental, license, installment and conditional sale agreement and other Contract affecting the ownership of, leasing of, title to or use of, any personal property (except personal property leases and installment and conditional sales agreements having a value per item or aggregate payments of less than $100,000 or with terms of less than one year);
	(g) each licensing agreement or other Contract with respect to patents, trademarks, copyrights, or other intellectual property (collectively, “Intellectual Property Assets”), including agreements with current or former employees, consultants or contractors regarding the appropriation or the non-disclosure of any of the Intellectual Property Assets of Centrue or any Centrue Subsidiary;
	(h) each collective bargaining agreement and other Contract to or with any labor union or other Person representing one or more employees;
	(i) each joint venture, partnership and other Contract (however named) involving a sharing of profits, losses, costs or liabilities by Centrue or any Centrue Subsidiary with any other Person;
	(j) each Contract containing covenants that in any way purport to restrict the business activity of Centrue or any Centrue Subsidiary or any Affiliate of any of the foregoing, or limit the ability of Centrue or any Centrue Subsidiary or any Affiliate of the foregoing to engage in any line of business or to compete with any Person;
	(k) each Contract providing for payments to or by any Person based on sales, purchases or profits, other than direct payments for goods;
	(l) the name and annual salary of each director, officer or employee of Centrue and each Centrue Subsidiary, and the profit sharing, bonus or other form of compensation (other than salary) paid or payable by Centrue, each Centrue Subsidiary or a combination of any of them to or for the benefit of each such person in question for the year ended December 31, 2005, and for the current year, and any employment agreement, consulting agreement, non-competition, severance or change in control agreement or similar arrangement or plan with respect to each such person;
	(m) each profit sharing, group insurance, hospitalization, stock option, pension, retirement, bonus, severance, change of control, deferred compensation, stock bonus, stock purchase, employee stock ownership or other employee welfare or benefit agreements, plans or arrangements established, maintained, sponsored or undertaken by Centrue or any Centrue Subsidiary for the benefit of the officers, directors or employees of Centrue or any Centrue Subsidiary, including each trust or other agreement with any custodian or any trustee for funds held under any such agreement, plan or arrangement, and all other Contracts or arrangements under which pensions, deferred compensation or other retirement benefits are being paid or may become payable by Centrue or any Centrue Subsidiary for the benefit of the employees of Centrue or any Centrue Subsidiary (collectively, the “Centrue Employee Benefit Plans”), and, in respect to any of them, the latest reports or forms, if any, filed with the Department of Labor and Pension Benefit Guaranty Corporation under ERISA, any current financial or actuarial reports and any currently effective Internal Revenue Service private rulings or determination letters obtained by or for the benefit of Centrue or any Centrue Subsidiary;

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	(n) the name of each Person who is or would be entitled pursuant to any Contract or Centrue Employee Benefit Plan to receive any payment from Centrue or any Centrue Subsidiary as a result of the consummation of the Contemplated Transactions (including any payment that is or would be due as a result of any actual or constructive termination of a Person’s employment or position following such consummation) and the maximum amount of such payment;
	(o) each holder of a Centrue Stock Option and the number of underlying shares to which each such holder may be entitled to acquire;
	(p) each Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by Centrue or any Centrue Subsidiary to be responsible for consequential damages;
	(q) each Contract for capital expenditures in excess of $100,000;
	(r) each written warranty, guaranty or other similar undertaking with respect to contractual performance extended by Centrue or any Centrue Subsidiary other than in the Ordinary Course of Business; and
	(s) each amendment, supplement and modification (whether oral or written) in respect of any of the foregoing.

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	(a) audited Consolidated Balance Sheets for Union as of December 31, 2003, 2004 and 2005, and the related Consolidated Statements of Income and Comprehensive Income, Statements of Cash Flows and Consolidated Statements of Stockholders’ Equity of Union for the years ended December 31, 2003, 2004 and 2005;
	(b) unaudited Consolidated Balance Sheet for Union as of March 31, 2006, and the related unaudited Consolidated Statement of Income and Comprehensive Income and Unaudited Consolidated Statement of Cash Flows for the three months ended March 31, 2006; and
	(c) Call Reports for UnionBank as of the close of business on December 31, 2003, 2004 and 2005, and on March 31, 2006.

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	(a) change in its authorized or issued capital stock; grant of any stock option or right to purchase shares of its capital stock; issuance of any security convertible into such capital stock or evidences of indebtedness (except in connection with customer deposits); grant of any registration rights; purchase, redemption, retirement or other acquisition by it of any shares of any such capital stock; or declaration or payment of any dividend or other distribution or payment in respect of shares of its capital stock;
	(b) amendment to its certificate of incorporation or charter (or similar organizational documents) or bylaws or adoption of any resolutions by its board of directors or stockholders with respect to the same;

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	(c) payment or increase of any bonus, salary or other compensation to any of its stockholders, directors, officers or employees, except, with respect to employees, for normal salary and bonus increases made in the Ordinary Course of Business or made in accordance with any then existing Union Employee Benefit Plan (as defined below), or entry by it into any employment, consulting, non-competition, change in control, severance or similar Contract with any stockholder, director, officer or employee;
	(d) adoption, amendment (except for any amendment necessary to comply with any Legal Requirement) or termination of, or increase in the payments to or benefits under, any Union Employee Benefit Plan;
	(e) damage to or destruction or loss of any of its assets or property, whether or not covered by insurance and where the resulting diminution in value individually or in the aggregate was greater than $100,000;
	(f) entry into, termination or extension of, or receipt of notice of termination of any joint venture or similar agreement pursuant to any Contract or any similar transaction;
	(g) except for this Agreement, entry into any new, or modification, amendment, renewal or extension (through action or inaction) of the terms of any existing lease, Contract or license that has a term of more than one year or that involves the payment by Union or any Union Subsidiary of more than $100,000 in the aggregate;
	(h) Union Loan or commitment to make any Union Loan other than in the Ordinary Course of Business;
	(i) Union Loan or commitment to make, renew, extend the term or increase the amount of any Loan to any Person if such Union Loan or any other Union Loans to such Person or an Affiliate of such Person is on the “watch list” or similar internal report of Union or any Union Subsidiary, or has been classified as “substandard,” “doubtful,” “loss,” or “other loans specially mentioned” or listed as a “potential problem loan”; provided, however, that nothing in this Section 5.17(i) shall prohibit Union or any Union Subsidiary from honoring any contractual obligation in existence on the date of this Agreement;
	(j) sale (other than any sale in the Ordinary Course of Business), lease or other disposition of any of its assets or properties or mortgage, pledge or imposition of any lien or other encumbrance upon any of its material assets or properties except for Tax and other liens that arise by operation of law and with respect to which payment is not past due and except for pledges or liens: (i) required to be granted in connection with the acceptance by UnionBank of government deposits; (ii) granted in connection with repurchase or reverse repurchase agreements; or (iii) otherwise incurred in the Ordinary Course of Business;
	(k) incurrence by it of any obligation or liability (fixed or contingent) other than in the Ordinary Course of Business;
	(l) cancellation or waiver by it of any claims or rights with a value in excess of $100,000;
	(m) aggregate investments by it of a capital nature exceeding $100,000;
	(n) except for the Contemplated Transactions, merger or consolidation with or into any other Person, or acquisition of any stock, equity interest or business of any other Person;
	(o) transaction for the borrowing or loaning of monies, or any increase in any outstanding indebtedness, other than in the Ordinary Course of Business;
	(p) material change in any policies and practices with respect to liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and Tax planning, accounting or any other material aspect of its business or operations, except for such changes as may be required in the opinion of the management of Union to respond to then current market or economic conditions or as may be required by any Regulatory Authorities;

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	(q) filing of any applications for additional branches, opening of any new office or branch, closing of any current office or branch or relocation of operations from existing locations;
	(r) discharge or satisfaction of any material lien or encumbrance on its assets or repayment of any material indebtedness for borrowed money, except for obligations incurred and repaid in the Ordinary Course of Business;
	(s) entry into any Contract or agreement to buy, sell, exchange or otherwise deal in any assets or series of assets in a single transaction in excess of $100,000 in aggregate value, except for sales of Union “other real estate owned” and other repossessed properties or the acceptance of a deed in lieu of foreclosure;
	(t) purchase or other acquisition of any investments, direct or indirect, in any derivative securities, financial futures or commodities or entry into any interest rate swap, floors and option agreements or other similar interest rate management agreements;
	(u) hiring of any employee with an annual salary in excess of $100,000, except for employees at will who are hired to replace employees who have resigned or whose employment has otherwise been terminated; or
	(v) agreement, whether oral or written, by it to do any of the foregoing.

	(a) all real property owned by Union and each Union Subsidiary and the principal buildings and structures located thereon, together with the address of such real estate, and each lease of real property to which Union and each Union Subsidiary is a party, identifying the parties thereto, the annual rental payable, the expiration date thereof and a brief description of the property covered, and in each case of either owned or leased real property, the proper identification, if applicable, of each such property as a branch or main office or other office of Union or such Union Subsidiary;
	(b) all loan and credit agreements, conditional sales contracts or other title retention agreements or security agreements relating to money borrowed by Union or any Union Subsidiary, exclusive of deposit agreements with customers of UnionBank entered into in the Ordinary Course of Business, agreements for the purchase of federal funds and repurchase agreements;
	(c) each Contract that involves the performance of services or delivery of goods or materials by Union or any Union Subsidiary of an amount or value in excess of $100,000;
	(d) each Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of Union or any Union Subsidiary in excess of $100,000;
	(e) each Contract not referred to elsewhere in this Section that:

	(i) relates to the future purchase of goods or services that materially exceeds the requirements of its respective business at current levels or for normal operating purposes; or
	(ii) materially affects the business or financial condition of Union or any Union Subsidiary;

	(f) each lease, rental, license, installment and conditional sale agreement and other Contract affecting the ownership of, leasing of, title to or use of, any personal property (except personal property leases and installment and conditional sales agreements having a value per item or aggregate payments of less than $100,000 or with terms of less than one year);
	(g) each licensing agreement or other Contract with respect to Intellectual Property Assets, including agreements with current or former employees, consultants or contractors regarding the appropriation or the non-disclosure of any of the Intellectual Property Assets of Union or any Union Subsidiary;

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	(h) each collective bargaining agreement and other Contract to or with any labor union or other Person representing one or more employees;
	(i) each joint venture, partnership and other Contract (however named) involving a sharing of profits, losses, costs or liabilities by Union or any Union Subsidiary with any other Person;
	(j) each Contract containing covenants that in any way purport to restrict the business activity of Union or any Union Subsidiary or any Affiliate of any of the foregoing, or limit the ability of Union or any Union Subsidiary or any Affiliate of the foregoing to engage in any line of business or to compete with any Person;
	(k) each Contract providing for payments to or by any Person based on sales, purchases or profits, other than direct payments for goods;
	(l) the name and annual salary of each director, officer or employee of Union and each Union Subsidiary, and the profit sharing, bonus or other form of compensation (other than salary) paid or payable by Union, each Union Subsidiary or a combination of any of them to or for the benefit of each such person in question for the year ended December 31, 2005, and for the current year, and any employment agreement, consulting agreement, non-competition, severance or change in control agreement or similar arrangement or plan with respect to each such person;
	(m) each profit sharing, group insurance, hospitalization, stock option, pension, retirement, bonus, severance, change of control, deferred compensation, stock bonus, stock purchase, employee stock ownership or other employee welfare or benefit agreements, plans or arrangements established, maintained, sponsored or undertaken by Union or any Union Subsidiary for the benefit of the officers, directors or employees of Union or any Union Subsidiary, including each trust or other agreement with any custodian or any trustee for funds held under any such agreement, plan or arrangement, and all other Contracts or arrangements under which pensions, deferred compensation or other retirement benefits are being paid or may become payable by Union or any Union Subsidiary for the benefit of the employees of Union or any Union Subsidiary (collectively, the “Union Employee Benefit Plans”), and, in respect to any of them, the latest reports or forms, if any, filed with the Department of Labor and Pension Benefit Guaranty Corporation under ERISA, any current financial or actuarial reports and any currently effective Internal Revenue Service private rulings or determination letters obtained by or for the benefit of Union or any Union Subsidiary;
	(n) the name of each Person who is or would be entitled pursuant to any Contract or Union Employee Benefit Plan to receive any payment from Union or any Union Subsidiary as a result of the consummation of the Contemplated Transactions (including any payment that is or would be due as a result of any actual or constructive termination of a Person’s employment or position following such consummation) and the maximum amount of such payment;
	(o) each holder of a Union Stock Option and the number of underlying shares to which each such holder may be entitled to acquire;
	(p) each Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by Union or any Union Subsidiary to be responsible for consequential damages;
	(q) each Contract for capital expenditures in excess of $100,000;
	(r) each written warranty, guaranty or other similar undertaking with respect to contractual performance extended by Union or any Union Subsidiary other than in the Ordinary Course of Business; and
	(s) each amendment, supplement and modification (whether oral or written) in respect of any of the foregoing.

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	(a) participate in meetings or discussions with officers and employees of Centrue and Union and their Subsidiaries in connection with employment opportunities with Union after the Effective Time, and, in connection therewith, the parties acknowledge that Union may, after consultation with and upon the consent of Centrue, enter into employment agreements in the applicable form attached as Exhibit G with the individuals listed, and pursuant to the terms identified, on Exhibit G; and
	(b) contact Persons having dealings with Centrue or Union or any of its respective Subsidiaries for the purpose of informing such Persons of the services to be offered by Union after the Effective Time.

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	(a) by mutual consent of the boards of directors of Union and Centrue;
	(b) by Union if: (i) any of the conditions in Article 9 has not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of Union to comply with its obligations under this Agreement); and (ii) Union has not waived such condition on or before the Closing Date;
	(c) by Centrue if: (i) any of the conditions in Article 10 has not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of Centrue to comply with its obligations under this Agreement), and (ii) Centrue has not waived such condition on or before the Closing Date;
	(d) by either Union or Centrue if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) by March 1, 2007, or such later date as the parties may agree (the “Termination Date”); provided, however, that the Termination Date shall be extended for up to ninety days if the sole reason that the

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	Closing has not occurred is due to the fact that (i) the regulatory approvals contemplated by Section 8.1 have not been received, so long as no Regulatory Authority has denied approval of any of the Contemplated Transactions, or (ii) the Registration Statement has not become effective; provided further, however, that the Termination Date shall not be so extended if the failure to obtain any such regulatory approval or the failure of the Registration Statement to become effective is the result of a failure by either Union or Centrue to comply fully with its obligations under this Agreement;
	(e) by Centrue, by giving written notice of such termination to Union, and subject to the special termination fee set forth in Section 11.3(d), if Centrue receives an Acquisition Proposal that is determined in good faith by the Centrue board of directors, in connection with the exercise of its fiduciary duties to Centrue’s stockholders under applicable law, as advised by its counsel, after consultation with Centrue’s financial advisor, to be on terms that are more favorable to the stockholders of Centrue than the Merger and that has a reasonable prospect of being consummated in accordance with its terms (a “Superior Centrue Proposal”); provided, however, that Centrue shall not be permitted to terminate this Agreement pursuant to this Section 11.1(e) unless Centrue shall have given Union five Business Days’ prior written notice thereof (or, if there are less than five Business Days remaining prior to the Closing, written notice prior to the Closing) of its intent to terminate this Agreement pursuant to this Section 11.1(e), together with a summary of the terms of, and the identity of the Person making, such Superior Centrue Proposal; and
	(f) by Union, by giving written notice of such termination to Centrue, and subject to the special termination fee set forth in Section 11.4(d), if Union receives an Acquisition Proposal that is determined in good faith by the Union board of directors, in connection with the exercise of its fiduciary duties to Union’s stockholders under applicable law, as advised by its counsel, after consultation with Union’s financial advisor, to be on terms that are more favorable to the stockholders of Union than the Merger and that has a reasonable prospect of being consummated in accordance with its terms (a “Superior Union Proposal”), provided, however, that Union shall not be permitted to terminate this Agreement pursuant to this Section 11.1(f) unless Union shall have given Centrue five Business Days’ prior written notice thereof (or, if there are less than five Business Days remaining prior to the Closing, written notice prior to the Closing) of its intent to terminate this Agreement pursuant to this Section 11.1(f), together with a summary of the terms of, and the identity of the Person making, such Superior Union Proposal.

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	UnionBancorp, Inc.
	122 West Madison Street
	Ottawa, Illinois 61350
	Telephone: (815) 431-2720
	Facsimile: (815) 431-0685
	Attention: Mr. Scott A. Yeoman

	Howard & Howard Attorneys PC
	Comerica Building
	151 South Rose Street, Suite 800
	Kalamazoo, Michigan 49007
	Telephone: (269) 382-8765
	Facsimile: (269) 382-1568
	Attention: Joseph B. Hemker, Esq.

	Centrue Financial Corporation
	303 Fountains Parkway
	Suite 101
	Fairview Heights, IL 62208
	Telephone: (618) 624-1323
	Facsimile: (618) 624-7389
	Attention: Mr. Thomas A. Daiber

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	Barack Ferrazzano Kirschbaum
	Perlman & Nagelberg LLP
	333 W. Wacker Drive, Suite 2700
	Chicago, Illinois 60606
	Telephone: (312) 984-3100
	Facsimile: (312) 984-3193
	Attention: John E. Freechack, Esq.

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	UNIONBANCORP, INC.

	By:	/s/ Scott A. Yeoman

	Name: Scott A. Yeoman

	Title:	President and CEO

	CENTRUE FINANCIAL CORPORATION

	By:	/s/ Thomas A. Daiber

	Name: Thomas A. Daiber

	Title:	Chief Executive Officer

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	to exercise all such powers and do all such acts as may be exercised or done by the corporation, subject to the provisions of the laws of the State of Delaware, this Certificate of Incorporation and the bylaws of the corporation, and
	to make, alter or repeal any bylaws of the corporation pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption)(the “Whole Board”).

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	for the adoption of any amendment, alteration, change or repeal of Articles VI, X or XI of this Certificate of Incorporation;
	for the adoption of any agreement for the merger or consolidation of the corporation with or into any other corporation;
	to authorize any sale, lease or exchange of all or substantially all of the assets of the corporation; or
	to authorize the dissolution of the corporation.

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	(a) RIGHT TO CONVERT. The shares of Series A Preferred Stock shall be convertible at the holder’s option into the number of fully paid and nonassessable shares of Common Stock that is calculated in accordance with the terms of this Section 3. Unless earlier permitted by the Company, the outstanding shares of Series A Preferred Stock are convertible at the holder’s option after the fourth anniversary of the date of issuance. The number of shares of Common Stock into which the outstanding Series A Preferred Stock is convertible shall be determined for all purposes on the first date such shares of Series A Preferred Stock become convertible (referred to as the “Determination Date”). Notwithstanding the occurrence of the Determination Date for any outstanding shares of Series A Preferred Stock, the holder of such shares may continue to hold these shares of Series A Preferred Stock and may at any time thereafter, subject to the provisions of this Section 3, convert those shares into Common Stock.
	(b) CONVERSION PRICE. The Conversion Price shall be equal to 1.075 times the per share book value of Common Stock, computed in accordance with generally accepted accounting principles, as of the end of the month immediately prior to the Determination Date. Each share of Series A Preferred Stock shall be convertible into the number of shares of Common Stock that results from dividing $1,000 by the Conversion Price.
	(c) MECHANICS OF VOLUNTARY CONVERSION; UNPAID DIVIDENDS.

	(i) Before any holder of shares of Series A Preferred Stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent of Series A Preferred Stock or Common Stock, with a written notice that he elects to convert the same and shall state therein the number of shares of Series A Preferred Stock being converted and the name or names in which the certificate or certificates for shares of Common Stock are to be issued. Except as otherwise expressly provided for herein, the date the Company receives such surrendered certificates and written notice shall be deemed to be the Conversion Date. Thereupon the Company shall promptly issue and deliver at such office to such holder of shares of Series A Preferred Stock or to the nominee or nominees of such holder a certificate or certificates representing: the number of shares of Common Stock to which he shall be entitled; and any shares of Series A Preferred Stock that were represented by any certificate surrendered as required by the provisions of this paragraph, but which were not converted and which he continues to own.
	(ii) Such conversion shall be deemed to have been made immediately prior to the close of business on the Conversion Date and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. A holder of shares of Series A Preferred Stock who surrenders shares of Series A Preferred Stock for conversion shall be entitled to receive from the Company on the date of such surrender an amount in cash equal to the accrued dividends on such surrendered shares of Series A Preferred Stock through such Conversion Date, less the aggregate amount of dividends which would have accrued since the last dividend payment date for Series A Preferred Stock on the number of shares of the Common Stock into which such shares of Series A Preferred Stock are converted if dividends on such shares of Common Stock accrued at an annual rate based upon the dividends paid by the Company on the Common Stock for the most recently ended fiscal period for which Common Stock dividends were paid, but any future dividends with respect to the surrendered shares of Series A Preferred Stock shall cease to accrue after such surrender and all rights with respect to such shares shall forthwith after such surrender terminate.

	(d) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any time or from time to time after the Issuance Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other

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	distribution payable in securities of the Company other than shares of Common Stock, then and in each such event provision shall be made so that the holders of Series A Preferred Stock shall receive upon conversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Company that they would have received had their Series A Preferred Stock been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period giving application to all adjustments called for during such period under this paragraph 3 with respect to the rights of the holders of Series A Preferred Stock.
	(e) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. If the shares of Common Stock issuable upon the conversion of the shares of Series A Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than an event provided for elsewhere in this paragraph 3), then and in each such event the holder of each share of Series A Preferred Stock shall have the right thereafter to convert such share into the kind and amounts of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the number of shares of Common Stock into which such shares of Series A Preferred Stock might have been converted immediately prior to such reorganization, reclassification or change, all subject to further adjustment as provided herein.
	(f) REORGANIZATION, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If at a any time or from time to time there shall be a capital reorganization of the Common Stock (other than an event provided for elsewhere in this paragraph 3) or a merger, consolidation or statutory exchange of securities of the Company with or into another corporation, or the sale of all or substantially all the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the holders of Series A Preferred Stock shall thereafter be entitled to receive upon conversion of the shares of Series A Preferred Stock, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of that number of shares of Common Stock deliverable upon conversion of the shares of Series A Preferred Stock would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this paragraph 3 with respect to the rights of the holders of Series A Preferred Stock after the reorganization, merger, consolidation or sale to the end that the provisions of this paragraph 3 (including, if necessary, adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the shares of Series A Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable. The foregoing provisions shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances.
	(g) SALE OF SHARES BELOW CONVERSION PRICE.

(i) If at any time or from time to time after the Issuance Date, the Company shall issue or sell Additional Shares of Common Stock (as hereinafter defined), other than as a dividend as provided in paragraph 3(e) above, for a consideration per share less than the then existing Conversion Price for Series A Preferred Stock (or, if an adjusted Conversion Price shall be in effect by reason of a previous adjustment, then less than such adjusted Conversion Price), then and in each case the then applicable Conversion Price for Series A Preferred Stock shall be reduced, as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Conversion Price by a fraction, the numerator of which shall be the sum of: the number of shares of Common Stock outstanding immediately prior to such issue or sale; plus the number of shares of Common Stock that the aggregate consideration received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at the Conversion Price, and the denominator of which shall be the sum of: (X) the number of shares of Common Stock outstanding immediately prior to such issue or sale; plus (Y) the number of such Additional Shares of Common Stock so issued.

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	(ii) For the purpose of making any adjustment in the Conversion Price or number of shares of Common Stock purchasable on the conversion of the shares of Series A Preferred Stock as provided above, the consideration received by the Company for any issue or sale of securities shall:

	(A) to the extent it consists of cash, be computed at the net amount of cash received by the Company after deduction of any underwriting or similar commissions, concessions or compensation paid or allowed by the Company in connection with such issue or sale;
	(B) to the extent it consists of services or property other than cash, be computed at the fair value of such services or property as determined in good faith by the Board; and
	(C) if Additional Shares of Common Stock, Convertible Securities (as defined below), or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration that covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options.

	(iii) For the purpose of the adjustment provided in subparagraph (i) of this paragraph 3(g), if at any time or from time to time after the Issuance Date the Company shall issue any rights or options for the purchase of, or stock or other securities convertible into, Additional Shares of Common Stock (such convertible stock or securities being referred to as “Convertible Securities”), then, in each case, if the Effective Price (as defined below) of such rights, options or Convertible Securities shall be less than the then existing Conversion Price for Series A Preferred Stock, the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the rights or options or Convertible Securities, plus, in the case of such options or rights, the minimum amounts of consideration, if any, payable to the Company upon exercise or conversion of such options or rights. For purposes of the foregoing, “Effective Price” shall mean the quotient determined by dividing the total of all such consideration by such maximum number of Additional Shares of Common Stock. No further adjustment of the Conversion Price adjusted upon the issuance of such rights, options or Convertible Securities shall be made as a result of the actual issuance of Additional Shares of Common Stock on the exercise of any such rights or options or the conversion of any such Convertible Securities. If any such rights or options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the Conversion Price adjusted upon the issuance of such rights, options or Convertible Securities shall be readjusted to the Conversion Price that would have been in effect had an adjustment been made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities, and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted plus the consideration, if any, actually received by the Company on the conversion of such Convertible Securities.
	(iv) For the purpose of the adjustment provided for in subparagraph (i) of this paragraph 3(g), if at any time or from time to time after the Issuance Date the Company shall issue any rights or options for the purchase of Convertible Securities, then, in each such case, if the Effective Price thereof is less than the current Conversion Price, the Company shall be deemed to have issued at the time of the issuance of such rights or options the maximum number of Additional Shares of Common Stock issuable upon conversion of the total amount of Convertible Securities covered by such rights or options and to have received as consideration for the issuance of such Additional

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Shares of Common Stock an amount equal to the amount of consideration, if any, received by the Company for the issuance of such rights or options, plus the minimum amounts of consideration, if any, payable to the Company upon the conversion of such Convertible Securities. For purposes of the foregoing, “Effective Price” shall mean the quotient determined by dividing the total amount of such consideration by such maximum number of Additional Shares of Common Stock. No further adjustment of such Conversion Price adjusted upon the issuance of such rights or options shall be made as a result of the actual issuance of the Convertible Securities upon the exercise of such rights or options or upon the actual issuance of Additional Shares of Common Stock upon the conversion of such Convertible Securities. The provisions of subparagraph (iii) of this paragraph 3(h) for the readjustment of such Conversion Price upon the expiration of rights or options or the rights of conversion of Convertible Securities, shall apply mutatis mutandis to the rights, options and Convertible Securities referred to in this subparagraph (iv).

	(h) DEFINITION OF ADDITIONAL SHARES. The term “Additional Shares of Common Stock” as used herein shall mean all shares of Common Stock issued or deemed issued by the Company after the Issuance Date, whether or not subsequently reacquired or retired by the Company, other than: shares of Common Stock issued upon conversion of the shares of Series A Preferred Stock; any shares of Common Stock (as adjusted for all stock dividends, stock splits, subdivisions and combinations) issued to employees, officers, directors, consultants or other persons performing services for the Company (if so issued solely because of any such person’s status as an officer, director, employee, consultant or other person performing services for the Company and not as part of any general offering of the Company’s securities) pursuant to any stock option plan, stock purchase plan or management incentive plan, agreement or arrangement approved by the Board; and (iii) any shares of Common Stock issued by the Company as full or partial consideration by the Company in connection with a merger, consolidation, purchase of assets or other transaction resulting in the acquisition by the Company of greater than 25% of the voting securities of any other corporation, financial institution or other entity, provided that the Common Stock used in such transaction is valued for purposes thereof at not less than its then book value.
	(i) ACCOUNTANTS’ CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or readjustment of the Conversion Price for the number of shares of Common Stock or other securities issuable upon conversion of the shares of Series A Preferred Stock, the Company, at its expense, shall cause independent certified public accountants of recognized standing selected by the Company (who may be the independent certified public accountants then auditing the books of the Company) to compute such adjustment or readjustment in accordance herewith and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to each registered holder of shares of Series A Preferred Stock at the holder’s address as shown on the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based including a statement of: (i) the consideration received or to be received by the Company for any Additional Shares of Common Stock issued or sold or deemed to have been issued or sold; the Conversion Price at the time in effect for each series of Series A Preferred Stock; and the number of Additional Shares of Common Stock and the type and amount, if any, of other property which at the time would be received upon conversion of the shares of Series A Preferred Stock.
	(j) NOTICES OF RECORD DATE. In the event of any taking by the Company of a record of the holders of any class or series of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any reclassification or recapitalization of the capital stock of the Company, any merger, consolidation or share exchange involving the Company, or any transfer of all or substantially all the assets of the Company to any other corporation, entity or person, or any voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, the Company shall mail to each holder of shares of Series A Preferred Stock (other than any such holder who is also a holder of record, or the affiliate of a holder of record, of shares of Common Stock, or is a director or executive officer, or an affiliate of a director or executive officer, of the Company) at least

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	30 days prior to the record date specified therein, a notice specifying: the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution; the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective; and the time, if any is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up.
	(k) FRACTIONAL SHARES. No fractional shares of Common Stock shall be issued upon conversion of shares of Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to the product of such fraction multiplied by the Conversion Price on the Conversion Date. Whether or not the fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting into shares of Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.
	(l) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series A Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred Stock. As a condition precedent to the taking of any action which would cause an adjustment to the Conversion Price, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient in order that it may validly and legally issue the shares of its Common Stock issuable based upon such adjusted Conversion Price.
	(m) NOTICES. Any notice required or permitted by the provisions of this paragraph 3 to be given to the holder of shares of Series A Preferred Stock or the Company, respectively, shall be deemed given when personally delivered to such holder or the Company or five business days after the same has been deposited in the United States mail, first class postage prepaid and addressed to each holder of record at his address appearing on the books of the Company or the Company’s registered office in the state of Illinois, as the case may be, provided, however, that the written notice to be delivered to the Company by the holder of shares of Series A Preferred Stock in connection with the conversion of such stock shall be effective only upon actual receipt by the Company.
	(n) PAYMENT OF TAXES. The Company will pay all taxes and other governmental charges (other than taxes measured by the revenue or income of the holders of shares of Series A Preferred Stock) that may be imposed in respect of the issue or delivery of shares of Common Stock upon conversion of shares of Series A Preferred Stock.
	(o) NO DILUTION OR IMPAIRMENT. The Company shall not amend its Certificate of Incorporation or participate in any reorganization, recapitalization, transfer of assets, consolidation, merger, share exchange, dissolution, issue or sale of securities or any other voluntary action, for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in carrying out all such action as may be reasonably necessary or appropriate to protect the conversion rights of the holders of shares of Series A Preferred Stock against dilution or other impairment.
	(p) DUTY TO MAKE FAIR ADJUSTMENTS IN CERTAIN CASES. If any event occurs as to which the other provisions of this paragraph 3 are not strictly applicable or if strictly applicable would not fairly protect the Conversion Rights of the holders of shares of Series A Preferred Stock in accordance with the essential intent and principles of such provisions, then the Board shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as adequately to protect such Conversion Rights.

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	By:

ATTEST:

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	Very truly yours,
	Sandler O’Neill & Partners, L.P.
	/s/ Sandler O’Neill & Partners, L.P.

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	Very truly yours,
	Keefe, Bruyette & Woods, Inc.
	/s/ Keefe, Bruyette & Woods, Inc.

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Item 20.	Indemnification of Directors and Officers

Item 21.	Exhibits and Financial Statement Schedules

Exhibit
Number				Description
	2	.1		Agreement and Plan of Merger dated June 30, 2006. This document is filed as Appendix A to the joint proxy statement-prospectus forming a part of this Registration Statement.
	3	.1		Restated Certificate of Incorporation of UnionBancorp, Inc. and Amendments thereto (filed as Exhibit to UnionBancorp’s Registration Statement on Form S-1 (Registration No. 33-9891) (the “S-1 Registration Statement”).
	3	.2		Bylaws of UnionBancorp, Inc. (as amended and restated June 17, 2004) (filed as Exhibit 3.2 to UnionBancorp’s Form 10-Q for the quarter ended June 30, 2004, and incorporated by reference herein).
	4	.1		Specimen Stock Certificate of UnionBancorp, Inc. (filed as Exhibit 4.6 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	4	.2		Certificate of Designation of Series A Convertible Preferred Stock (filed as Exhibit 4.3 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	4	.3		Certificate of Designation of Series B Preferred Stock (filed as Exhibit 4.4 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	4	.4		Certificate of Designation of Series C Junior Participating Preferred Stock (filed as Exhibit 4.5 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	5	.1		Opinion of Howard & Howard Attorneys, P.C. regarding legality of UnionBancorp, Inc. common stock to be issued in the merger.
	8	.1		Opinion of Crowe Chizek & Company LLC regarding material Federal income tax consequences of the merger.
	10	.1		Registration Agreement dated August 6, 1996, between the Company and each of Wayne W. Whalen and Dennis J. McDonnell (incorporated by reference from Exhibit 10.10 to UnionBancorp’s S-1 Registration Statement).
	10	.2		Loan Agreement between the Company and LaSalle National Bank dated August 2, 1996 (incorporated by reference from Exhibit 10.11 to UnionBancorp’s S-1 Registration Statement).
	10	.3		UnionBancorp, Inc. Employee Stock Ownership Plan (incorporated by reference from Exhibit 10.12 to UnionBancorp’s S-1 Registration Statement).

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Exhibit
Number				Description
	10	.4		UnionBancorp, Inc. 1999 Nonqualified Stock Option Plan (incorporated by reference from Exhibit 10.1 to the registration statement on Form S-8 filed by the Company on December 10, 1999 (File No. 333-92549)).
	10	.5		UnionBancorp, Inc. 2000 Incentive Compensation Plan (incorporated by reference from Exhibit 10.1 to UnionBancorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 as filed with the SEC on November 13, 2001).
	10	.6		UnionBancorp, Inc. 2003 Stock Option Plan (incorporated by reference from UnionBancorp’s Proxy Statement in connection with UnionBancorp, Inc. 2003 annual meeting of stockholders filed with the SEC on Schedule 14A).
	10	.7		Form of Stock Option Agreements (incorporated by reference from Exhibit 10.1 to UnionBancorp’s Quarterly Report on Form 10-Q/ A for the quarter ended September 30, 2005, as filed with the SEC on July 14, 2006).
	10	.8		Thomas A. Daiber Employment Agreement (incorporated by reference from Exhibit 2.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006 (appears as Exhibit F-1 thereto)).
	10	.9		Scott A. Yeoman Employment Agreement (incorporated by reference from Exhibit 2.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006 (appears as Exhibit F-2 thereto)).
	10	.10		Kurt R. Stevenson Employment Agreement (incorporated by reference from Exhibit 2.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006 (appears as Exhibit F-3 thereto))
	10	.11		UnionBancorp, Inc. Voting Agreement (incorporated by reference from Exhibit 10.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006).
	10	.12		Centrue Financial Corporation Voting Agreement (incorporated by reference from Exhibit 10.2 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006).
	23	.1		Consent of Crowe Chizek & Company LLC.
	23	.2		Consent of McGladrey & Pullen, LLP.
	23	.3		Consent of Howard & Howard Attorneys, P.C. (included in Exhibit 5.1).
	24	.1		Power of Attorney (included on signature page).
	99	.1		Form of Proxy to be delivered to the stockholders of UnionBancorp, Inc.
	99	.2		Form of Proxy to be delivered to the stockholders of Centrue Financial Corporation.
	99	.3		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.4		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.5		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.6		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.7		Consent of Person Named to be Future Director of UnionBancorp, Inc.

Item 22.	Undertakings

	(a) To file during any period in which offers and sales are being made, a post-effective amendment to this registration statement:

	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Act”);
	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof), which individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if

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	the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

	(b) That for the purpose of determining any liability under the Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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	UNIONBANCORP, INC.

	By:	/s/ Scott A. Yeoman

	Scott A. Yeoman
	President and Chief Executive Officer

Signature				Capacity
/s/ Scott A. Yeoman   Scott A. Yeoman				President and Chief Executive Officer, Director
/s/ Kurt R. Stevenson   Kurt R. Stevenson				Senior Executive Vice President and Principal Financial and Accounting Officer
/s/ Richard J. Berry   Richard J. Berry				Director
/s/ Walter E. Breipohl   Walter E. Breipohl				Director
/s/ Robert J. Doty   Robert J. Doty				Director

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Signature				Capacity
/s/ Dennis J. McDonnell   Dennis J. McDonnell				Director
/s/ I. J. Reinhardt, Jr.   I. J. Reinhardt, Jr.				Director
/s/ John A. Shinkle   John A. Shinkle				Director
/s/ Scott C. Sullivan   Scott C. Sullivan				Director
/s/ John A. Trainor   John A. Trainor				Director

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Exhibit
Number				Description
	2	.1		Agreement and Plan of Merger dated June 30, 2006. This document is filed as Appendix A to the joint proxy statement-prospectus forming a part of this Registration Statement.
	3	.1		Restated Certificate of Incorporation of UnionBancorp, Inc. and Amendments thereto (filed as Exhibit to UnionBancorp’s Registration Statement on Form S-1 (Registration No. 33-9891) (the “S-1 Registration Statement”).
	3	.2		Bylaws of UnionBancorp, Inc. (as amended and restated June 17, 2004) (filed as Exhibit 3.2 to UnionBancorp’s Form 10-Q for the quarter ended June 30, 2004, and incorporated by reference herein).
	4	.1		Specimen Stock Certificate of UnionBancorp, Inc. (filed as Exhibit 4.6 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	4	.2		Certificate of Designation of Series A Convertible Preferred Stock (filed as Exhibit 4.3 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	4	.3		Certificate of Designation of Series B Preferred Stock (filed as Exhibit 4.4 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	4	.4		Certificate of Designation of Series C Junior Participating Preferred Stock (filed as Exhibit 4.5 to UnionBancorp’s S-1 Registration Statement and incorporated by reference herein).
	5	.1		Opinion of Howard & Howard Attorneys, P.C. regarding legality of UnionBancorp, Inc. common stock to be issued in the merger.
	8	.1		Opinion of Crowe Chizek & Company LLC regarding material Federal income tax consequences of the merger.
	10	.1		Registration Agreement dated August 6, 1996, between the Company and each of Wayne W. Whalen and Dennis J. McDonnell (incorporated by reference from Exhibit 10.10 to UnionBancorp’s S-1 Registration Statement).
	10	.2		Loan Agreement between the Company and LaSalle National Bank dated August 2, 1996 (incorporated by reference from Exhibit 10.11 to UnionBancorp’s S-1 Registration Statement).
	10	.3		UnionBancorp, Inc. Employee Stock Ownership Plan (incorporated by reference from Exhibit 10.12 to UnionBancorp’s S-1 Registration Statement).
	10	.4		UnionBancorp, Inc. 1999 Nonqualified Stock Option Plan (incorporated by reference from Exhibit 10.1 to the registration statement on Form S-8 filed by the Company on December 10, 1999 (File No. 333-92549)).
	10	.5		UnionBancorp, Inc. 2000 Incentive Compensation Plan (incorporated by reference from Exhibit 10.1 to UnionBancorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 as filed with the SEC on November 13, 2001).
	10	.6		UnionBancorp, Inc. 2003 Stock Option Plan (incorporated by reference from UnionBancorp’s Proxy Statement in connection with UnionBancorp, Inc. 2003 annual meeting of stockholders filed with the SEC on Schedule 14A).
	10	.7		Form of Stock Option Agreements (incorporated by reference from Exhibit 10.1 to UnionBancorp’s Quarterly Report on Form 10-Q/ A for the quarter ended September 30, 2005, as filed with the SEC on July 14, 2006).
	10	.8		Thomas A. Daiber Employment Agreement (incorporated by reference from Exhibit 2.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006 (appears as Exhibit F-1 thereto)).
	10	.9		Scott A. Yeoman Employment Agreement (incorporated by reference from Exhibit 2.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006 (appears as Exhibit F-2 thereto)).
	10	.10		Kurt R. Stevenson Employment Agreement (incorporated by reference from Exhibit 2.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006 (appears as Exhibit F-3 thereto))
	10	.11		UnionBancorp, Inc. Voting Agreement (incorporated by reference from Exhibit 10.1 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006).

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Exhibit
Number				Description
	10	.12		Centrue Financial Corporation Voting Agreement (incorporated by reference from Exhibit 10.2 to UnionBancorp’s Current Report on Form 8-K filed with the SEC on July 7, 2006).
	23	.1		Consent of Crowe Chizek & Company LLC.
	23	.2		Consent of McGladrey & Pullen, LLP.
	23	.3		Consent of Howard & Howard Attorneys, P.C. (included in Exhibit 5.1).
	24	.1		Power of Attorney (included on signature page).
	99	.1		Form of Proxy to be delivered to the stockholders of UnionBancorp, Inc.
	99	.2		Form of Proxy to be delivered to the stockholders of Centrue Financial Corporation.
	99	.3		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.4		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.5		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.6		Consent of Person Named to be Future Director of UnionBancorp, Inc.
	99	.7		Consent of Person Named to be Future Director of UnionBancorp, Inc.