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                                          As filed with the Securities and Exchange Commission on July 2, 2010
                                                                                                                               Registration No. 333-




                                        UNITED STATES
                            SECURITIES AND EXCHANGE COMMISSION
                                                               WASHINGTON, D.C. 20549


                                                       FORM S-1
                                                REGISTRATION STATEMENT
                                                                     UNDER
                                                            THE SECURITIES ACT OF 1933


                                        SP Bancorp, Inc. and
                          SharePlus Federal Bank 401(k) Profit Sharing Plan
                                                   (Exact Name of Registrant as Specified in Its Charter)



                      Maryland                                                      6712                                      Being applied for
              (State or Other Jurisdiction of                            (Primary Standard Industrial                            (I.R.S. Employer
             Incorporation or Organization)                               Classification Code Number)                         Identification Number)

                                                                     5224 West Plano Parkway
                                                                        Plano, Texas 75093
                                                                          (972) 931-5311
                                                (Address, Including Zip Code, and Telephone Number, Including Area Code, of
                                                                   Registrant’s Principal Executive Offices)



                                                                     Mr. Jeffrey L. Weaver
                                                             President and Chief Executive Officer
                                                                   5224 West Plano Parkway
                                                                      Plano, Texas 75093
                                                                        (972) 931-5311
                                                (Address, Including Zip Code, and Telephone Number, Including Area Code, of
                                                                              Agent for Service)




                                                                               Copies to:

                      Robert B. Pomerenk, Esq.                                                                        James Fleischer
                         Steven Lanter, Esq.                                                                 Silver, Freedman & Taff, L.L.P.
                Luse Gorman Pomerenk & Schick, P.C.                                                                3299 K Street, N.W.
                    5335 Wisconsin Avenue, N.W.                                                                           Suite 100
                              Suite 780                                                                           Washington, DC 20007
                       Washington, D.C. 20015                                                                          (202) 295-4500
                           (202) 274-2000


      Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes
effective.

     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: 
      If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: 
     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering: 

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering: 

      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of ―large accelerated filer,‖ ―accelerated filer‖ and ―smaller reporting company‖ in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer                                                                                 Accelerated filer                          
Non-accelerated filer                  (Do not check if a smaller reporting company)                    Smaller reporting company                  


                                                   CALCULATION OF REGISTRATION FEE

                                                                                          Proposed             Proposed
                                                                       Amount             maximum              maximum
                        Title of each class of                          to be           offering price         aggregate           Amount of
                     securities to be registered                      registered          per share          offering price      registration fee
Common Stock, $0.01 par value per share                           1,983,750 shares        $10.00          $19,837,500 (1)           $1,415
Participation interests                                           177,863 interests                                                   (2)

(1)   Estimated solely for the purpose of calculating the registration fee.
(2)   The securities of SP Bancorp, Inc. to be purchased by the SharePlus Federal Bank 401(k) Profit Sharing Plan are included in the amount
      shown for the common stock. Accordingly, no separate fee is required for the participation interests. In accordance with Rule 457(h) of
      the Securities Act of 1933, as amended, the registration fee has been calculated on the basis of the number of shares of common stock
      that may be purchased with the current assets of such Plan.


      The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which specifically states that this registration shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
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PROSPECTUS


                                             SP BANCORP, INC.
                                   (Proposed Holding Company for SharePlus Federal Bank)

                                Up to 1,725,000 Shares of Common Stock

      SP Bancorp, Inc., a Maryland corporation, is offering up to 1,725,000 shares of common stock on a best efforts basis in connection with
the conversion of SharePlus Federal Bank, a federally chartered savings bank, from the mutual to the stock form of organization. We may sell
up to 1,983,750 shares of common stock because of demand for the shares or changes in market conditions without resoliciting subscribers. We
must sell a minimum of 1,275,000 shares in order to complete the offering. All shares of common stock are being offered for sale at a price of
$10.00 per share. We expect that our common stock will be listed for trading on the Nasdaq Capital Market under the symbol ―SPBC‖ upon
conclusion of the stock offering. There is currently no public market for the shares of our common stock.

      We are offering the shares of common stock in a ―subscription offering.‖ Depositors of SharePlus Federal Bank with aggregate account
balances of at least $50 as of the close of business on March 31, 2009 will have first priority rights to buy our shares of common stock. Shares
of common stock not purchased in the subscription offering may be offered for sale to the general public in a ―community offering.‖ We also
may offer for sale shares of common stock not purchased in the subscription offering or community offering through a ―syndicated community
offering‖ managed by Sandler O’Neill & Partners, L.P.

      The minimum number of shares of common stock you may order is 25 shares. The maximum number of shares of common stock that can
be ordered through a single qualifying account is 25,000 shares, and no person by himself or with an associate or group of persons acting in
concert may purchase more than 40,000 shares. The offering is expected to expire at 4:00 p.m., Dallas Time, on [expiration date]. We may
extend this expiration date without notice to you until [extension date], unless the Office of Thrift Supervision approves a later date, which may
not be beyond [final date]. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [extension date], or
the number of shares of common stock to be sold is increased to more than 1,983,750 shares or decreased to fewer than 1,275,000 shares. If the
offering is extended beyond [extension date], or if the number of shares of common stock to be sold is increased to more than 1,983,750 shares
or decreased to fewer than 1,275,000 shares, we will resolicit subscribers, giving them an opportunity to change or cancel their orders. Funds
received during the offering will be held in a segregated account at SharePlus Federal Bank and will earn interest at _____%, which is our
current passbook savings rate.

      Sandler O’Neill & Partners, L.P. will assist us in selling our shares of common stock on a best efforts basis. Sandler O’Neill & Partners,
L.P. is not required to purchase any shares of the common stock that are being offered. Purchasers will not pay a commission to purchase
shares of common stock in the offering. Sandler O’Neill & Partners, L.P. has advised us that following the offering it intends to make a market
in the common stock, but is under no obligation to do so.


     This investment involves a degree of risk, including the possible loss of your investment. Please read ― Risk
Factors ‖ beginning on page 16.



                                                           OFFERING SUMMARY
                                                            Price: $10.00 per Share

                                                                                           Minimum              Maximum          Adjusted Maximum
Number of shares                                                                             1,275,000           1,725,000             1,983,750
Gross offering proceeds                                                                $    12,750,000      $   17,250,000      $     19,837,500
Estimated offering expenses (excluding selling agent fees and expenses)                $     1,015,000      $    1,015,000      $      1,015,000
Estimated selling agent fees and expenses (1) (2)                                      $       245,950      $      308,050      $        343,758
Estimated net proceeds                                                                 $    11,489,050      $   15,926,950      $     18,478,742
Estimated net proceeds per share                                                       $          9.01      $         9.23      $           9.32

(1)   See ―The Conversion; Plan of Distribution—Marketing and Distribution; Compensation‖ for a discussion of Sandler O’Neill & Partners,
      L.P.’s compensation for this offering.
(2)   If all shares of common stock are sold in the syndicated community offering, excluding shares purchased by the employee stock
ownership plan and shares purchased by insiders of SP Bancorp, Inc., for which no selling agent commissions would be paid, the
maximum selling agent commissions and expenses would be $735,000 at the minimum, $1.0 million at the maximum and $1.2 million at
the maximum, as adjusted. See ―The Conversion; Plan of Distribution—Marketing and Distribution; Compensation‖ for a discussion of
fees to be paid to Sandler O’Neill & Partners, L.P. and other FINRA member firms in the event that shares are sold in a syndicated
community offering.
     These securities are not deposits or savings accounts and are not federally insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

     Neither the Securities and Exchange Commission, the Office of Thrift Supervision, nor any state securities regulator has approved or
disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
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                     For assistance, please call the Conversion Center at (800) 387-1024.



                    S ANDLER O’ NEILL + P ARTNERS , L.P.

                              The date of this prospectus is August ___, 2010.
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                    [MAP SHOWING MARKET AREA APPEARS ON INSIDE FRONT COVER]
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                                        TABLE OF CONTENTS

                                                                                        Page
SUMMARY                                                                                   1
RISK FACTORS                                                                             16
SELECTED FINANCIAL AND OTHER DATA                                                        26
HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING                                      29
OUR POLICY REGARDING DIVIDENDS                                                           30
MARKET FOR THE COMMON STOCK                                                              31
HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE                                   32
CAPITALIZATION                                                                           34
PRO FORMA DATA                                                                           35
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS    43
BUSINESS OF SP BANCORP, INC.                                                             63
BUSINESS OF SHAREPLUS FEDERAL BANK                                                       63
SUPERVISION AND REGULATION                                                               92
TAXATION                                                                                101
MANAGEMENT OF SP BANCORP, INC.                                                          102
SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS                                       113
THE CONVERSION; PLAN OF DISTRIBUTION                                                    115
RESTRICTIONS ON ACQUISITION OF SP BANCORP, INC.                                         135
DESCRIPTION OF CAPITAL STOCK                                                            140
TRANSFER AGENT                                                                          141
EXPERTS                                                                                 141
LEGAL AND TAX MATTERS                                                                   141
WHERE YOU CAN FIND ADDITIONAL INFORMATION                                               142
INDEX TO FINANCIAL STATEMENTS OF SHAREPLUS FEDERAL BANK                                 F-1

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                                                                   SUMMARY

     The following summary highlights material information in this prospectus. It may not contain all the information that is important to you.
For additional information, you should read this entire prospectus carefully, including the Financial Statements and the notes to the Financial
Statements.

     In this prospectus, the terms ―we,‖ ―our,‖ and ―us‖ refer to SP Bancorp, Inc. and SharePlus Federal Bank, unless the context indicates
another meaning.

SharePlus Federal Bank
      SharePlus Federal Bank is a federally chartered savings bank headquartered in Plano, Texas. SharePlus Federal Bank was originally
chartered in 1958 as a federal credit union serving the employees and family members of Frito-Lay, Inc. Over the years and through a series of
mergers, the credit union also grew to serve the employees and family members of YUM! Brands, Inc., A&W Restaurants, Inc., KFC
Corporation, Long John Silvers, Inc., Pizza Hut, Inc., Taco Bell Corp., and various PepsiCo divisions, as well as dozens of other companies
that provided credit union benefits to their employees. Throughout this prospectus, these companies are sometimes referred to as our former
sponsor companies.

      We converted to a federal savings bank on October 1, 2004, at which time we had $142.9 million in total loans, $149.3 million in deposits
and $18.4 million of total equity. The objective of the charter conversion was to implement our business strategy of broadening our banking
services into residential mortgage lending as well as commercial real estate and commercial business lending. This has allowed us to better
serve the needs of our customers and the local communities in which we operate, compete more effectively with other financial service
providers, and have access to the capital markets through a potential stock offering. As of March 31, 2010, SharePlus Federal Bank had $227.2
million of total assets, $167.2 million of loans, net, including loans held for sale, $192.2 million of deposits and $17.0 million of total equity.

       We provide financial services to individuals, families and businesses through our eight banking offices. Five of our branch offices are
located in and around our headquarters in Plano, Texas. Additionally, two of our branches are located in Louisville, Kentucky and one is
located in Irvine, California. Six of our eight branch offices are located within corporate facilities of our former sponsor companies. Because of
their location within corporate offices, the substantial majority of the customers of these branches are employees of these former sponsor
companies. Upon completion of the mutual-to-stock conversion and stock offering, we intend to continue to operate from each of these offices;
however, it is expected that at the end of 2010, one of our Dallas branch offices located in a former sponsor company facility will re-locate to
Plano, Texas and will have reduced hours of operations.

      Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated
from operations and borrowings, in mortgage loans secured by residential real estate, home equity loans and lines of credit, commercial real
estate loans, consumer loans (consisting primarily of automobile loans) and to a lesser extent, commercial loans. At March 31, 2010, $146.4
million, or 86.8%, of our total loan portfolio was comprised of residential and commercial real estate loans. We also offer brokerage services
for the purchase and sale of non-deposit investment and insurance products through a third-party brokerage arrangement.

      The majority of our residential and commercial real estate loans are originated through our Texas branch network and are collateralized
by properties within this market area. Additionally, we are a preferred lender through various employee loan programs and executive relocation
loan programs for

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certain of our former sponsor companies. Through these programs, we have the opportunity to provide loans on the primary residences of
employees and of executives who are being relocated by these companies, which has resulted in a portion of our residential real estate loan
portfolio being collateralized by properties outside of our Texas market area.

     We also invest in investment securities, primarily consisting of government sponsored mortgage-backed securities, and to a lesser extent,
municipal obligations, agency bonds and collateralized mortgage obligations guaranteed by Fannie Mae and Freddie Mac.

     We offer a variety of deposit accounts, including noninterest-bearing and interest-bearing demand accounts, savings accounts, money
market accounts and certificates of deposit.

     SharePlus Federal Bank’s executive offices are located at 5224 W. Plano Parkway, Plano, Texas 75093. Our telephone number at this
address is (972) 931-5311. Our website address is www.shareplus.com. Information on our website is not incorporated into this prospectus and
should not be considered part of this prospectus.

SP Bancorp, Inc.
      SP Bancorp, Inc. is a newly formed Maryland corporation that will own all of the outstanding shares of common stock of SharePlus
Federal Bank upon completion of the mutual-to-stock conversion and the stock offering. SP Bancorp, Inc. has not engaged in any business to
date.

      Our executive offices are located at 5224 W. Plano Parkway, Plano, Texas 75093. Our telephone number at this address is
(972) 931-5311.

Our Organizational Structure
      SharePlus Federal Bank is a mutual savings bank that has no stockholders. Pursuant to the terms of our plan of conversion, SharePlus
Federal Bank will convert from the mutual to the stock form of ownership. As part of the conversion, we are offering for sale in a subscription
offering, and, if necessary, a community offering and a syndicated community offering, shares of common stock of SP Bancorp, Inc., our
newly formed stock holding company. Upon the completion of the conversion and stock offering, SharePlus Federal Bank will be a wholly
owned subsidiary of SP Bancorp, Inc.

Business Strategy
      Due to our credit union history, SharePlus Federal Bank’s customer base has been drawn, in part, from the employees of our former
sponsor companies. Additionally, since our conversion to a federal savings bank in 2004, we have increased our deposits and loan portfolio in
and around our Texas branch office network through a more traditional community bank growth pattern. Our intention is to continue to provide
the highest quality customer service and offerings to our existing customers at all of our branch locations and to continue to increase our
commercial and residential real estate lending in our Texas market area. Our business strategy is to accomplish these goals and to grow and
improve our profitability by:
        •    continuing to diversify our loan portfolio by emphasizing the origination of one- to four-family residential loans, commercial real
             estate loans and commercial loans;

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        •    continuing conservative underwriting guidelines and aggressively monitoring of our loan portfolio to maintain asset quality;
        •    emphasizing lower-cost core deposits to reduce the funding costs of our loan originations;
        •    managing interest rate risk by emphasizing adjustable-rate loans for our portfolio and selling most of our longer-term, fixed-rate
             residential mortgage loans;
        •    increasing our sources of noninterest income; and
        •    utilizing our current branch network to implement a controlled growth strategy, and reducing our non-interest expense as a
             percentage of our net income.

     Our strategy is designed to expand our banking relationships with customers and to diversify our revenue stream. A full description of our
products and services begins on page [62] of this prospectus under the heading ―Business of SharePlus Federal Bank.‖

      This strategy is intended to guide our investment of the net proceeds of the offering. We intend to continue to pursue our business
strategy after the conversion and the offering, subject to changes necessitated by future market conditions and other factors. See
―Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Strategy‖ for a further discussion of our
business strategy.

Reasons for the Conversion
      Our primary reasons for converting and raising additional capital through the offering are:
        •    to increase our capital to support future growth;
        •    to have greater flexibility to structure and finance the expansion of our operations, including potential cash or stock acquisitions of
             other financial institutions, although we have no current arrangements or agreements with respect to any such acquisitions;
        •    to provide better capital management alternatives, including the ability to pay dividends and to repurchase shares of our common
             stock, subject to market conditions; and
        •    to attract and retain qualified personnel by establishing stock-based benefit plans for management and employees.

      We believe that the additional capital raised in the offering may enable us to take advantage of business opportunities that may not
otherwise be available to us. As of March 31, 2010, SharePlus Federal Bank was considered ―well capitalized‖ for regulatory purposes and is
not subject to a directive or a recommendation from the Office of Thrift Supervision to raise capital.

Terms of the Conversion and the Offering
     Under SharePlus Federal Bank’s plan of conversion, SharePlus Federal Bank will convert to stock form and will become a subsidiary of
SP Bancorp, Inc. In connection with the conversion, we are offering between 1,275,000 and 1,725,000 shares of common stock to eligible
depositors of SharePlus Federal Bank, to our employee benefit plans and, to the extent shares remain available, to the general

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public. The number of shares of common stock to be sold may be increased to up to 1,983,750 as a result of demand for the shares or changes
in the market for financial institution stocks. Unless the number of shares of common stock to be offered is increased to more than 1,983,750 or
decreased to less than 1,275,000, or the offering is extended beyond [extension date], subscribers will not have the opportunity to change or
cancel their stock orders.

      The purchase price of each share of common stock to be issued in the offering is $10.00. All investors will pay the same purchase price
per share. Investors will not be charged a commission to purchase shares of common stock in the offering. Sandler O’Neill & Partners, L.P.,
our marketing advisor in the offering, will use its best efforts to assist us in selling shares of our common stock. Sandler O’Neill & Partners,
L.P. is not obligated to purchase any shares of common stock in the offering.

Persons Who May Order Shares of Common Stock in the Offering
      We are offering the shares of common stock in a subscription offering in the following descending order of priority:
        •    First, to depositors of SharePlus Federal Bank with aggregate account balances of at least $50 as of the close of business on
             March 31, 2009.
        •    Second, to SharePlus Federal Bank’s tax-qualified employee benefit plans, including our employee stock ownership plan and
             401(k) plan, which will receive, without payment therefor, nontransferable subscription rights to purchase in the aggregate up to
             10% of the shares of common stock sold in the offering. Our employee stock ownership plan intends to purchase up to 8% of the
             shares of common stock sold in the offering, with the remaining shares in this purchase priority allocated to our 401(k) plan and
             any other tax-qualified employee benefit plan.
        •    Third, to depositors of SharePlus Federal Bank with aggregate account balances of at least $50 as of the close of business on
             [supplemental date].
        •    Fourth, to depositors of SharePlus Federal Bank as of [other member date].

      Shares of common stock not purchased in the subscription offering may be offered for sale to the general public in a community offering,
with a preference given to natural persons residing in the Texas counties of Dallas, Collin, Denton, Rockwall, Hunt, Kaufman, Ellis, Tarrant,
Grayson and Fannin, the California county of Orange and the Kentucky county of Jefferson. The community offering may begin concurrently
with, during or promptly after the subscription offering as we may determine at any time. If shares remain available for sale following the
subscription offering or community offering, we also may offer for sale shares of common stock through a syndicated community offering
managed by Sandler O’Neill & Partners, L.P.

     We have the right to accept or reject, in our sole discretion, orders received in the community offering or syndicated community offering.
We have not established any set criteria for determining whether to accept or reject a purchase order in the community offering or the
syndicated community offering and, accordingly, any determination to accept or reject purchase orders in the community offering and the
syndicated community offering will be based on the facts and circumstances known to us at the time.

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      To ensure a proper allocation of stock, each subscriber eligible to purchase stock in the subscription offering must list on his or her stock
order and certification form all deposit accounts in which he or she had an ownership interest at March 31, 2009, [supplemental date] or [other
member date], as applicable. Failure to list all accounts, or providing incorrect information, could result in the loss of all or part of a
subscriber’s stock allocation. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the order forms
will be final.

       If we receive orders for more shares than we are offering, we may not be able to fully or partially fill your order. Shares will be allocated
first in the order of priority to subscribers in the subscription offering. A detailed description of share allocation procedures can be found in the
section entitled ―The Conversion; Plan of Distribution.‖

How We Determined the Offering Range
       The amount of common stock that we are offering is based on an independent appraisal of the estimated market value of SP Bancorp,
Inc., assuming the conversion and the offering are completed. RP Financial, LC., our independent appraiser, has estimated that as of May 28,
2010, this market value ranged from $12.8 million to $17.3 million, with a midpoint of $15.0 million. Based on this valuation and a $10.00 per
share price, the number of shares of common stock being offered for sale by us will range from 1,275,000 shares to 1,725,000 shares. We may
sell up to 1,983,750 shares of common stock because of demand for the shares or changes in market conditions without resoliciting subscribers.
The $10.00 per share price was selected primarily because it is the price most commonly used in mutual-to-stock conversions of financial
institutions.

      The appraisal is based in part on our financial condition and results of operations, the effect of the additional capital raised by the sale of
shares of common stock in the offering, and an analysis of a peer group of ten publicly traded thrift holding companies with assets between
$199.0 million and $577.0 million that RP Financial, LC. considered comparable to us.

            Company Name and Ticker Symbol                                     Exchange            Headquarters              Total Assets
                                                                                                                             (in millions)
            Citizens Community Bancorp, Inc. (CZWI)                             NASD
                                                                                 AQ          Eau Claire, WI              $             577
            Community Financial Corp. (CFFC)                                    NASD                                                         (1)
                                                                                 AQ          Staunton, VA                $             541
            FFD Financial Corp. (FFDF)                                          NASD
                                                                                 AQ          Dover, OH                   $             199
            First Advantage Bancorp (FABK)                                      NASD
                                                                                 AQ          Clarksville, TN             $             345
            First Capital, Inc. (FCAP)                                          NASD
                                                                                 AQ          Corydon, IN                 $             463
            First Savings Financial Group, Inc. (FSFG)                          NASD
                                                                                 AQ          Clarksville, IN             $             494
            Louisiana Bancorp, Inc. (LABC)                                      NASD
                                                                                 AQ          Metairie, LA                $             327
            North Central Bancshares, Inc. (FFFD)                               NASD
                                                                                 AQ          Fort Dodge, IA              $             452
            River Valley Bancorp (RIVR)                                         NASD
                                                                                 AQ          Madison, IN                 $             395
            Wayne Savings Bancshares, Inc. (WAYN)                               NASD
                                                                                 AQ          Wooster, OH                 $             406

(1)   As of December 31, 2009.

      The following table presents a summary of selected pricing ratios for SP Bancorp, Inc. and the peer group companies identified by RP
Financial, LC. Ratios are based on earnings for the twelve months ended March 31, 2010 and book value as of March 31, 2010, except as noted
in the table above where company information is as of December 31, 2009, the most recent information available as of the time of the
appraisal. Tangible book value is total equity, less intangible assets. Compared to the median pricing of the peer group, our pro forma pricing
ratios at the maximum of the offering range indicated a

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discount of 17.5% on a price-to-book value basis and a discount of 21.4% on a price-to-tangible book value basis. The pricing ratios result from
our generally having higher levels of equity but lower core earnings than the companies in the peer group on a pro forma basis. The pricing
ratios also reflect recent volatile market conditions, particularly for stock of financial institution holding companies, and the effect of such
conditions on the trading market for recent mutual-to-stock conversions. In reviewing and approving the valuation, our board of directors
considered the range of price-to-book value ratios and price-to-tangible book value ratios at the different ranges of shares to be sold in the
offering. The appraisal did not consider one valuation approach to be more important than the others.

                                                              Price-to-earnings          Price-to-book            Price-to-tangible
                                                                  multiple                value ratio             book value ratio
            SP Bancorp, Inc. (pro forma) (1)
                Maximum, as adjusted                                        NM *                59.92 %                       59.92 %
                Maximum                                                     NM *                55.90 %                       55.90 %
                Minimum                                                     NM *                47.28 %                       47.28 %
            Valuation of peer group companies
              using stock prices as of May 28, 2010
                Averages                                                 14.61x                 69.06 %                       72.27 %
                Medians                                                  12.07x                 67.77 %                       71.12 %

*     Not meaningful
(1)   Based on earnings for the twelve months ended March 31, 2010 and book value as of March 31, 2010.

      Pro forma earning multiples were not meaningful (―NM‖) for SP Bancorp, Inc. due to its negative pro forma earnings per share.

      RP Financial, LC. advised the board of directors that the appraisal was prepared in conformance with the regulatory appraisal
methodology. That methodology requires a valuation based on an analysis of the trading prices of comparable public companies whose stocks
have traded for at least one year prior to the valuation date, and as a result of this analysis, RP Financial, LC. determined that our pro forma
price-to-core earnings ratios were higher than the peer group companies and our pro forma price-to-book and price-to-tangible book ratios were
lower than the peer group companies. See ―—How We Determined the Offering Range.‖

      Our board of directors carefully reviewed the information provided to it by RP Financial, LC. through the appraisal process, but did not
make any determination regarding whether prior standard mutual-to-stock conversions have been undervalued, nor did the board draw any
conclusions regarding how the historical pricing data reflected above may affect SP Bancorp, Inc.’s appraisal. Instead, we engaged RP
Financial, LC. to help us understand the regulatory process as it applies to the appraisal and to advise the board of directors as to how much
capital SP Bancorp, Inc. would be required to raise under the regulatory appraisal guidelines.

      The independent appraisal does not indicate per share market value. Do not assume or expect that the valuation of SP Bancorp,
Inc. as indicated above means that, after the conversion and the offering, the shares of common stock will trade at or above the $10.00
offering price. Furthermore, the pricing ratios presented above were utilized by RP Financial, LC. to estimate our market value and
not to compare the relative value of shares of our common stock with the value of the capital stock of the peer group. The value of the
capital stock of a particular company may be affected by a number of factors such as financial performance, asset size and market
location.

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      The independent appraisal will be updated prior to the completion of the conversion. If the appraised value decreases below $12.8 million
or increases above $19.8 million, subscribers may be resolicited with the approval of the Office of Thrift Supervision and be given the
opportunity to change or cancel their orders. If you do not respond, we will cancel your stock order and return your subscription funds, with
interest, and cancel any authorization to withdraw funds from your deposit accounts for the purchase of shares of common stock. For a more
complete discussion of the amount of common stock we are offering for sale and the independent appraisal, see ―The Conversion; Plan of
Distribution—Determination of Share Price and Number of Shares to be Issued.‖

After-Market Stock Price Performance Provided by Independent Appraiser
     The following table presents stock price performance information for all standard mutual-to-stock conversions completed between
January 1, 2009 and May 28, 2010. These companies did not constitute the group of ten comparable public companies utilized in RP Financial,
LC.’s valuation analysis.

                                        Mutual-to-Stock Conversion Offerings with Closing Dates
                                              between January 1, 2009 and May 28, 2010

                                                Conversion                              Percentage Price Appreciation (Depreciation)
                                                  Date         Exchange                          From Initial Trading Date
Company Name and                                                                                                                   Through May 28,
Ticker Symbol                                                               One Day       One Week           One Month                  2010
Harvard Illinois Bancorp, Inc. (HARI)             04/09/10       OTC           —               —                  (1.0 )%                    (21.5 )%
OBA Financial Services, Inc. (OBAF)                             NASD
                                                  01/22/10       AQ             3.9 %           1.1 %              3.0 %                      14.6 %
OmniAmerican Bancorp, Inc. (OABC)                               NASD
                                                  01/21/10       AQ           18.5 %           13.2 %             9.9 %                       15.7 %
Versailles Financial Corp. (VERF)                 01/13/10       OTC           —                —                 —                            —
Athens Bancshares, Inc. (AFCB)                                  NASD
                                                  01/07/10       AQ           16.0 %           13.9 %             10.6 %                       6.0 %
Territorial Bancorp, Inc. (TBNK)                                NASD
                                                  07/13/09       AQ           49.9 %           47.5 %             48.7 %                      97.0 %
St. Joseph Bancorp, Inc. (SJBA)                   02/02/09       OTC           —                —                  —                           —
Hibernia Homestead Bancorp, Inc. (HIBE)           01/28/09       OTC           5.0 %            5.0 %              5.0 %                      50.0 %
      Average                                                                 11.7 %           10.1 %              9.5 %                      20.2 %
      Median                                                                   4.5 %            3.1 %              4.0 %                      10.3 %

      Stock price performance is affected by many factors, including, but not limited to: general market and economic conditions; the interest
rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the
experience and ability of management, historical and anticipated operating results, the nature and quality of the company’s assets, and the
company’s market area. The companies listed in the table above may not be similar to SP Bancorp, Inc. Moreover, the pricing ratios for their
stock offerings were in some cases different than the pricing ratios for SP Bancorp, Inc.’s common stock, and the market conditions in which
these offerings were completed were, in some cases, different from current market conditions. Any or all of these differences may cause our
stock to perform differently from these other offerings.

      There can be no assurance that our stock price will not trade below $10.00 per share, as has been the case for many
mutual-to-stock conversions. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not
limited to, the section entitled ―Risk Factors‖ beginning on page 16.

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Limits on How Much Common Stock You May Purchase
      The minimum number of shares of common stock that may be purchased is 25. Generally, no individual, or individuals exercising
subscription rights through a single qualifying account held jointly, may purchase more than 25,000 shares ($250,000) of common stock. If any
of the following persons purchases shares of common stock through different accounts, their purchases, in all categories of the offering, when
combined with your purchases, cannot exceed 40,000 shares ($400,000):
        •    your spouse or relatives of you or your spouse living in your house;
        •    most companies, trusts or other entities in which you are a trustee, have a substantial beneficial interest or hold a senior
             management position; or
        •    other persons who may be your associates or persons acting in concert with you.

     See the detailed descriptions of ―acting in concert‖ and ―associate‖ in ―The Conversion; Plan of Distribution—Limitations on Common
Stock Purchases.‖

How You May Purchase Shares of Common Stock
      In the subscription offering and community offering, you may pay for your shares only by:
        •    personal check, bank check or money order, made payable to SP Bancorp, Inc.; or
        •    authorizing us to withdraw funds from the types of SharePlus Federal Bank deposit accounts permitted on the stock order and
             certification form.

      SharePlus Federal Bank is not permitted to knowingly lend funds to anyone for the purpose of purchasing shares of common stock in the
offering. Additionally, you may not use a check drawn on a SharePlus Federal Bank line of credit or a third-party check to pay for shares of
common stock.

       You can subscribe for shares of common stock in the offering by delivering a signed and completed original stock order and certification
form, together with full payment or authorization to withdraw from one or more of your SharePlus Federal Bank deposit accounts, so that it is
received (not postmarked) before 4:00 p.m., Dallas Time, on [expiration date], which is the expiration of the offering period. For orders paid
for by check or money order, the funds will be cashed promptly and held in a segregated account at SharePlus Federal Bank, or in our
discretion at another insured depository institution. We will pay interest on those funds calculated at SharePlus Federal Bank’s current
passbook savings rate from the date funds are received until completion or termination of the conversion and the offering. Withdrawals from
certificates of deposit to purchase shares of common stock in the offering may be made without incurring an early withdrawal penalty;
however, if a withdrawal results in a certificate account with a balance less than the applicable minimum balance requirement, the certificate
will be canceled at the time of withdrawal without penalty and the remaining balance will be transferred to a savings account and earn interest
at our passbook savings rate subsequent to the withdrawal. All funds authorized for withdrawal from deposit accounts with SharePlus Federal
Bank must be in the accounts at the time the stock order is received. However, funds will not be withdrawn from the accounts until the
completion of the conversion and offering and will earn interest at the applicable deposit account rate until that time. A hold will be placed on
those funds when your stock order is received, making the designated funds unavailable to you. After we receive your order, your order cannot
be changed or canceled unless the number of shares of common stock to be offered is increased to more than 1,983,750 shares or decreased to
fewer than 1,275,000 shares, or the offering is extended beyond [extension date].

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      By signing the stock order and certification form, you are acknowledging receipt of a prospectus and that the shares of common stock are
not deposits or savings accounts that are federally insured or otherwise guaranteed by SharePlus Federal Bank, the Federal Deposit Insurance
Corporation or any other government agency.

      You may be able to subscribe for shares of common stock using funds in your individual retirement account (IRA). If you wish to
use some or all of the funds in your SharePlus Federal Bank IRA to purchase our common stock, the applicable funds must be
transferred to a self-directed account maintained by an independent trustee, such as a brokerage firm, and the purchase must be made
through that account. Because individual circumstances differ and processing of IRA fund orders takes additional time, we
recommend that you contact our Conversion Center promptly, preferably at least two weeks before the [expiration date] expiration of
the offering period, for assistance with purchases using funds from your SharePlus Federal Bank IRA or any other retirement account
that you may have. Whether you may use such funds for the purchase of shares in the stock offering may depend on time constraints and,
possibly, limitations imposed by the brokerage firm or institution where your funds are held.

Delivery of Stock Certificates
      Certificates representing shares of common stock sold in the offering will be mailed to the persons entitled thereto at the certificate
registration address noted by them on the stock order and certification form, as soon as practicable following consummation of the offering and
receipt of all necessary regulatory approvals. It is possible that, until certificates for the common stock are delivered, purchasers might
not be able to sell the shares of common stock that they ordered, even though the common stock will have begun trading.

How We Intend to Use the Proceeds From the Offering
       Assuming we sell 1,983,750 shares of common stock in the stock offering, and we have net proceeds of $18.5 million, we intend to
distribute the net proceeds as follows:
        •    $9.2 million (50.0% of the net proceeds) will be invested in SharePlus Federal Bank;
        •    $1.6 million (8.6% of the net proceeds) will be loaned to our employee stock ownership plan to fund its purchase of our shares of
             common stock; and
        •    $7.7 million (41.4% of the net proceeds) will be retained by us.

      We may use the remaining funds we receive for investments, to pay cash dividends, to repurchase shares of common stock and for other
general corporate purposes. We presently do not have any plans to pay cash dividends or to repurchase our shares of common stock. SharePlus
Federal Bank may use the proceeds it receives to support increased lending and other products and services, and to repay short-term
borrowings. The net proceeds retained by SP Bancorp, Inc. and SharePlus Federal Bank also may be used for future business expansion
through acquisitions of banks, thrifts and other financial services companies, and opening or acquiring branch offices. We have no current
arrangements or agreements with respect to any such acquisitions. Initially, a substantial portion of the net proceeds will be invested in
short-term investments and mortgage-backed securities consistent with our investment policy.

     Please see the section of this prospectus entitled ―How We Intend to Use the Proceeds From the Offering‖ for more information on the
proposed use of the proceeds from the offering.

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You May Not Sell or Transfer Your Subscription Rights
      Office of Thrift Supervision regulations prohibit you from transferring your subscription rights. If you order shares of common stock in
the subscription offering, you will be required to state that you are purchasing the shares of common stock for yourself and that you have no
agreement or understanding to sell or transfer your subscription rights. We intend to take legal action, including reporting persons to
federal or state regulatory agencies, against anyone who we believe has sold or transferred his or her subscription rights. We will not
accept your order if we have reason to believe that you have sold or transferred your subscription rights. When completing your stock
order and certification form, you should not add the name(s) of persons who do not have subscription rights or who qualify in a lower
subscription priority than you do. In addition, the stock order and certification form requires that you list all deposit accounts, giving all names
on each account and the account number at the applicable eligibility record date. Your failure to provide this information, or providing
incomplete or incorrect information, may result in a loss of part or all of your share allocation, if there is an oversubscription.

Deadline for Orders of Common Stock
       If you wish to purchase shares of common stock in the offering, we must receive a properly completed original stock order and
certification form, together with full payment for the shares of common stock, at the Conversion Center or any of our branch offices no later
than 4:00 p.m., Dallas Time, on [expiration date]. A postmark prior to [expiration date] will not entitle you to purchase shares of common stock
unless we receive the envelope by 4:00 p.m., Dallas Time on [expiration date]. You may submit your stock order and certification form by mail
using the order reply envelope provided, by overnight courier to the indicated address on the stock order form, or by hand delivery to our
Conversion Center, located at 5224 W. Plano Parkway, Plano, Texas 75093, or to any of our branch offices. Once we receive it, your order is
irrevocable unless the offering is terminated or extended beyond [extension date] or the number of shares of common stock to be sold is
decreased to less than 1,275,000 shares or increased to more than 1,983,750 shares. If the offering is extended beyond [extension date], or if the
number of shares of common stock to be sold is decreased to less than 1,275,000 shares or is increased to more than 1,983,750 shares, we will,
with the approval of the Office of Thrift Supervision, resolicit subscribers, giving them the opportunity to confirm, cancel or change their stock
orders during a specified resolicitation period.

      Although we will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights, the
subscription offering and all subscription rights will expire at 4:00 p.m., Dallas Time, on [expiration date], whether or not we have been able to
locate each person entitled to subscription rights.

Steps We May Take If We Do Not Receive Orders for the Minimum Number of Shares
    If we do not receive orders for at least 1,275,000 shares of common stock, we may take steps to issue the minimum number of shares of
common stock in the offering range. Specifically, we may:
        •    increase the purchase limitations; and/or
        •    seek the approval of the Office of Thrift Supervision to extend the offering beyond [extension date], so long as we resolicit
             subscriptions that we have previously received in the offering.

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      If a purchase limitation is increased, subscribers in the subscription offering who ordered the maximum amount will be, and, in our sole
discretion, some other large subscribers may be, given the opportunity to increase their subscriptions up to the then applicable limit.

Possible Change in the Offering Range
     RP Financial, LC. will update its appraisal before we complete the offering. If, as a result of demand for the shares or changes in market
conditions, RP Financial, LC. determines that our pro forma market value has increased, we may sell up to 1,983,750 shares in the offering
without further notice to you. If our pro forma market value at that time is either below $12.8 million or above $19.8 million, then, after
consulting with the Office of Thrift Supervision, we may:
        •    terminate the stock offering and promptly return all funds;
        •    set a new offering range and give all subscribers the opportunity to confirm, modify or rescind their purchase orders for shares of
             SP Bancorp, Inc.’s common stock; or
        •    take such other actions as may be permitted by the Office of Thrift Supervision and the Securities and Exchange Commission.

Possible Termination of the Offering
     We may terminate the offering at any time prior to the special meeting of members of SharePlus Federal Bank that is being called to vote
upon the conversion, and at any time after member approval with the approval of the Office of Thrift Supervision.

     We must sell a minimum of 1,275,000 shares to complete the offering. If we terminate the offering because we fail to sell the minimum
number of shares or for any other reason, we will promptly return your funds with interest at our passbook savings rate and we will cancel
deposit account withdrawal authorizations.

Purchases by Officers and Directors
      We expect our directors and executive officers, together with their associates, to subscribe for 209,500 shares of common stock in the
offering, or 16.4% of the shares to be sold at the minimum of the offering range. However, there can be no assurance that any individual
director or executive officer, or the directors and executive officers as a group, will purchase any specific number of shares of our common
stock. The purchase price paid by our directors and executive officers for their subscribed shares will be the same $10.00 per share price paid
by all other persons who purchase shares of common stock in the offering. Purchases by directors, executive officers and their associates will
be included in determining whether the required minimum number of shares has been subscribed for in the offering.

Benefits to Management and Potential Dilution to Stockholders Following the Conversion
       We expect our tax-qualified employee stock ownership plan to purchase up to 8% of the total number of shares of common stock that we
sell in the offering, or up to 138,000 shares of common stock, assuming we sell the maximum of the shares proposed to be sold. If we receive
orders for more shares of common stock than the maximum of the offering range, the employee stock ownership plan will have first priority to
purchase shares over this maximum, up to a total of 8% of the total number of shares of common stock sold in the offering. We reserve the
right to purchase shares of common stock in the open

                                                                           11
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market following the offering in order to fund all or a portion of the employee stock ownership plan. This plan is a tax-qualified retirement plan
for the benefit of all our employees. Purchases by the employee stock ownership plan will be included in determining whether the required
minimum number of shares have been sold in the offering. Assuming the employee stock ownership plan purchases 138,000 shares in the
offering, we will recognize additional pre-tax compensation expense of $1.4 million over a 20-year period, assuming the shares of common
stock have a fair market value of $10.00 per share for the full 20-year period. If, in the future, the shares of common stock have a fair market
value greater or less than $10.00, the compensation expense will increase or decrease accordingly.

      We also intend to implement one or more stock-based benefit plans no earlier than six months after completion of the conversion.
Stockholder approval of these plans will be required, and the stock-based benefit plans cannot be implemented until at least six months after the
completion of the conversion pursuant to applicable Office of Thrift Supervision regulations. If adopted within 12 months following the
completion of the conversion, the stock-based benefit plan will reserve a number of shares of common stock equal to not more than 4% of the
shares sold in the offering, or up to 69,000 shares of common stock at the maximum of the offering range, for restricted stock awards to key
employees and directors, at no cost to the recipients. If adopted within 12 months following the completion of the conversion, the stock-based
benefit plan will also reserve a number of shares equal to not more than 10% of the shares of common stock sold in the offering, or up to
172,500 shares of common stock at the maximum of the offering range, for the exercise of stock options granted to key employees and
directors. If the stock-based benefit plans are adopted after one year from the date of the completion of the conversion, the 4% and 10%
limitations described above will no longer apply, and we may adopt stock-based benefit plans encompassing more than 241,500 shares of our
common stock assuming the maximum of the offering range. We have not yet determined whether we will present these plans for stockholder
approval within 12 months following the completion of the conversion or whether we will present these plans for stockholder approval more
than 12 months after the completion of the conversion.

      If 4% of the shares of common stock sold in the offering are awarded under a stock-based benefit plan and come from authorized but
unissued shares of common stock, stockholders’ ownership interest in SP Bancorp, Inc. would be diluted by approximately 3.8%. If 10% of the
shares of common stock sold in the offering are issued upon the exercise of options granted under a stock-based benefit plan and come from
authorized but unissued shares of common stock, stockholders’ ownership interest in SP Bancorp, Inc. would be diluted by approximately
9.1%.

                                                                       12
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      The following table summarizes the number of shares of common stock and aggregate dollar value of grants (valuing each share granted
at the offering price of $10.00) that are available under one or more stock-based benefit plans if such plans are adopted within one year
following the completion of the conversion and the offering. The table shows the dilution to stockholders if all these shares are issued from
authorized but unissued shares, instead of shares purchased in the open market. The table also sets forth the number of shares of common stock
to be acquired by the employee stock ownership plan for allocation to all employees. A portion of the stock grants shown in the table below
may be made to non-management employees.

                                                                                                                  Dilution
                                                Number of Shares to be Granted or Purchased                      Resulting                     Value of Grants (1)
                                                                                         As a                      From                     At                     At
                                                 At                  At              Percentage                 Issuance of              Minimum               Maximum
                                             Minimum            Maximum             of Common                   Shares for                  of                     of
                                             of Offering        of Offering          Stock to be               Stock Benefit             Offering              Offering
                                                Range              Range              Issued (2)                   Plans                  Range                  Range
                                                                                                                                             (Dollars in thousands)
Employee stock ownership plan                      102,000             138,000                  8.00 %                   — %         $    1,020,000        $    1,380,000
Stock awards                                        51,000              69,000                  4.00 %                   3.8 %              510,000               690,000
Stock options                                      127,500             172,500                 10.00 %                   9.1 %              555,900               752,100
      Total                                        280,500             379,500                 22.00 %                   12.3 %      $    2,085,900        $    2,822,100



(1)   The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. For purposes of this
      table, fair value is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at
      $4.36 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option
      exercise price of $10.00; dividend yield of 0%; an expected option life of ten years; a risk-free interest rate of 3.84%; and a volatility rate
      of 23.90% based on an index of publicly traded thrift institutions. The actual expense of stock options granted under a stock-based
      benefit plan will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the
      valuation assumptions used in the option pricing model ultimately adopted, which may or may not be the Black-Scholes model.
(2)   The stock-based benefit plans may award a greater number of options and shares, respectively, if the plans are adopted more than 12
      months after the completion of the conversion.

       The actual value of restricted stock grants will be determined based on their fair value (the closing market price of shares of common
stock of SP Bancorp, Inc.) as of the date grants are made. The following table presents the total value of all shares to be available for awards of
restricted stock under the stock-based benefit plan, assuming the shares for the plan are purchased or issued in a range of market prices from
$8.00 per share to $14.00 per share at the time of the grant.

                          51,000 Shares Awarded                    60,000 Shares Awarded                    69,000 Shares Awarded                  79,350 Shares Awarded
                          at Minimum of Offering                   at Midpoint of Offering                  at Maximum of Offering                 at Maximum of Offering
 Share Price                      Range                                    Range                                    Range                             Range, As Adjusted
                                                             (In thousands, except share price information)
$       8.00          $                       408               $                        480           $                       552             $                      635
       10.00                                  510                                        600                                   690                                    794
       12.00                                  612                                        720                                   828                                    952
       14.00                                  714                                        840                                   966                                  1,111

       The grant-date fair value of the stock options granted under the stock-based benefit plans will be based, in part, on the closing price of
shares of common stock of SP Bancorp, Inc. on the date the options are granted. The fair value will also depend on the various assumptions
utilized in the option-pricing model ultimately adopted. The following table presents the total estimated value of the stock options to be
available for grant under the stock-based benefit plans, assuming the range of market prices for the shares are $8.00 per share to $14.00 per
share at the time of the grant.

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                                                                                                                                    198,375 Options at
                               Grant-Date Fair       127,500 Options at             150,000 Options at   172,500 Options at           Maximum of
    Exercise Price             Value Per Option      Minimum of Range               Midpoint of Range    Maximum of Range           Range, As Adjusted
                                                       (In thousands, except share price information)
$              8.00        $               3.49      $               445          $                524   $             602      $                  692
              10.00                        4.36                      556                           654                 752                         865
              12.00                        5.23                      667                           785                 902                       1,038
              14.00                        6.10                      778                           915               1,052                       1,210

      The tables presented above are provided for informational purposes only. There can be no assurance that our stock price will not
trade below $10.00 per share. Before you make an investment decision, we urge you to carefully read this prospectus, including, but
not limited to, the section entitled ―Risk Factors‖ beginning on page 16.

Market for Common Stock
      We expect that our common stock will be listed on the Nasdaq Capital Market under the symbol ―SPBC.‖ Sandler O’Neill & Partners,
L.P. currently intends to make a market in the shares of our common stock, but is under no obligation to do so. See ―Market for the Common
Stock.‖

Our Policy Regarding Dividends
     Following completion of the stock offering, our board of directors will have the authority to declare dividends on our common stock,
subject to statutory and regulatory requirements. However, we currently do not intend to pay a cash dividend in the immediate future. The
payment and amount of any dividend payments will depend upon a number of factors, including the following:
          •     regulatory capital requirements;
          •     our financial condition and results of operations;
          •     tax considerations;
          •     statutory and regulatory limitations; and
          •     general economic conditions and forecasts.

Tax Consequences
     As a general matter, the conversion will not be a taxable transaction for federal or state income tax purposes to SharePlus Federal Bank,
SP Bancorp, Inc., or persons eligible to subscribe in the subscription offering. See ―Taxation‖ for additional information.

Conditions to Completion of the Conversion and the Offering
        We cannot complete the conversion and the offering unless:
          •     the plan of conversion is approved by at least a majority of votes eligible to be cast by members of SharePlus Federal Bank. A
                special meeting of members to consider and vote upon the plan of conversion has been set for _________ ____, 2010;

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        •    we have received orders to purchase at least the minimum number of shares of common stock offered; and
        •    we receive final approval from the Office of Thrift Supervision to complete the conversion and the offering.

How You Can Obtain Additional Information
      Our branch office personnel may not, by law, assist with investment-related questions about the offering. If you have any questions
regarding the conversion or the offering, please call our Conversion Center at (800) 387-1024, Monday through Friday between 10:00 a.m. and
4:00 p.m., Dallas Time, or visit the Conversion Center located at 5224 W. Plano Parkway, Plano, Texas. The Conversion Center will be closed
on weekends and bank holidays.

TO ENSURE THAT EACH PERSON RECEIVES A PROSPECTUS AT LEAST 48 HOURS PRIOR TO THE EXPIRATION DATE
OF [EXPIRATION DATE], IN ACCORDANCE WITH FEDERAL LAW, NO PROSPECTUS WILL BE MAILED OR
HAND-DELIVERED ANY LATER THAN FIVE DAYS OR TWO DAYS, RESPECTIVELY, PRIOR TO [EXPIRATION DATE].

                                                                       15
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                                                                RISK FACTORS

                        You should consider carefully the following risk factors in evaluating an investment in our
                                                        shares of common stock.

Risks Related to Our Business
   We have increased our commercial real estate lending, which has increased our exposure to credit risk.
      Since our conversion from a credit union to a savings bank, we have increased our portfolio of loans secured by commercial real estate.
As a result, our commercial real estate loans are relatively unseasoned. At March 31, 2010, our commercial real estate loans totaled $23.4
million, or 13.9% of total loans, compared to no commercial real estate loans at December 31, 2006, and $5.6 million of commercial real estate
loans at December 31, 2007. At March 31, 2010, our commercial real estate loans that were delinquent 30 days or more totaled $2.4 million, or
48.9% of total delinquent loans of 30 days or more. We intend to continue to increase the origination of commercial real estate loans consistent
with safety and soundness standards.

      Commercial real estate loans generally have greater credit risk than owner-occupied one- to four-family residential mortgage loans.
Repayment of commercial real estate loans generally depends, in large part, on sufficient income from the property securing the loan or the
borrower’s business to cover operating expenses and debt service. These types of loans typically involve larger loan balances to single
borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Changes in economic conditions that are
beyond the control of the borrower may affect the value of the security for the loan, the future cash flow of the affected property or business, or
the marketability of a construction project with respect to loans originated for the acquisition and development of property. As we increase our
portfolio of commercial real estate loans, our level of non-performing loans may increase.

   If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings will decrease.
      Our customers may not repay their loans according to the original terms, and the collateral, if any, securing the payment of these loans
may be insufficient to pay any remaining loan balance. We may experience significant loan losses, which may have a material adverse effect on
our operating results. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness
of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining
the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic
conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover probable losses in our loan portfolio,
requiring us to make additions to our allowance for loan losses. While our allowance for loan losses was 1.18% of total loans at March 31,
2010, additions to our allowance could materially decrease our net income.

      In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our allowance for loan
losses or recognize further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory
authorities may have a material adverse effect on our financial condition and results of operations.

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   If our non-performing assets increase, our earnings will decrease.
       At March 31, 2010, our non-performing assets (which consist of non-accrual loans, loans 90 days or more delinquent and troubled debt
restructurings) totaled $6.3 million, which is an increase of $2.9 million over non-performing assets at December 31, 2009. Our
non-performing assets adversely affect our net income in various ways. We do not record interest income on non-accrual loans, and we must
reserve for probable losses on non-performing loans, which are established through a current period charge to income in the provision for loan
losses. There are also legal fees associated with the resolution of problem assets. Additionally, although we did not have any real estate owned
at either March 31, 2010 or December 31, 2009, any such real estate would result in carrying costs such as taxes, insurance and maintenance
fees. Further, the resolution of non-performing assets requires the active involvement of management, which can distract us from the overall
supervision of operations and other income-producing activities of the Bank. Finally, if our estimate of the allowance for loan losses is
inadequate, we will have to increase the allowance accordingly, which is effected by recording a provision for loan losses.

   We have additional concentration of credit risk due to our history as a credit union.
      Because of our history as a credit union, we have a concentration of credit risk with respect to loans in our portfolio and that we continue
to make to employees and former employees of our former sponsor companies. The former sponsor companies are Frito-Lay, Inc., KFC
Corporation, Pizza Hut, Inc., Taco Bell Corp., Yum! Brands, Inc., A&W Restaurants, Inc., Long John Silver’s, Inc. and various divisions of
PepsiCo. This concentration of credit risk could unfavorably affect our operations if these former sponsor companies experienced employment
curtailments or temporary layoffs.

   Higher Federal Deposit Insurance Corporation insurance premiums have increased our expenses and any future insurance premium
   increases will adversely affect our earnings.
      On May 22, 2009, the Federal Deposit Insurance Corporation adopted a final rule levying a five basis point special assessment on each
insured depository institution’s assets minus Tier 1 capital as of June 30, 2009. We recorded an expense of $95,000 during the quarter ended
June 30, 2009, to reflect the special assessment. Any further special assessments that the Federal Deposit Insurance Corporation levies will be
recorded as an expense during the appropriate period. The Federal Deposit Insurance Corporation also increased the general deposit insurance
assessment rate. Therefore, our Federal Deposit Insurance Corporation general insurance premium expense will increase compared to prior
periods.

      The Federal Deposit Insurance Corporation also adopted a rule pursuant to which all insured depository institutions were required to
prepay their estimated assessments for the fourth quarter of 2009, and for all of 2010, 2011 and 2012. The prepayment amount was collected on
December 30, 2009. The assessment rate for the fourth quarter of 2009 and for 2010 is based on each institution’s total base assessment rate for
the third quarter of 2009, modified to assume that the assessment rate in effect on September 30, 2009 had been in effect for the entire third
quarter, and the assessment rate for 2011 and 2012 will be equal to the modified third quarter assessment rate plus an additional three basis
points. In addition, each institution’s base assessment rate for each period will be calculated using its third quarter assessment base, adjusted
quarterly for an estimated 5% annual growth rate in the assessment base through the end of 2012. We recorded the pre-payment as a prepaid
expense, which will be amortized to expense over three years. Based on our deposits and assessment rate as of September 30, 2009, our
prepayment amount was $991,000.

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   Future changes in interest rates could reduce our profits.
     Our profitability largely depends on our net interest income, which can be negatively affected by changes in interest rates. Net interest
income is the difference between:
        •    the interest income we earn on our interest-earning assets, such as loans and securities; and
        •    the interest expense we incur on our interest-bearing liabilities, such as deposits and borrowings.

      As a result of our focus on one- to four-family residential mortgage lending, the interest rates on our loans are generally fixed for a longer
period of time than the interest rates on our deposits. Additionally, many of our securities investments have lengthy maturities with fixed
interest rates. Like many savings institutions, our focus on deposits as a source of funds, which either have no stated maturity or shorter
contractual maturities than mortgage loans, results in our liabilities having a shorter average duration than our assets. For example, as of
March 31, 2010, 65.2% of our loans had maturities of 15 years or longer (the majority of which were adjustable-rate residential mortgage
loans), while 68.3% of our certificates of deposit had maturities of one year or less. This imbalance can create significant earnings volatility
because market interest rates change over time. In a period of rising interest rates, the interest we earn on our assets, such as loans and
investments, may not increase as rapidly as the interest we pay on our liabilities, such as deposits. In a period of declining market interest rates,
the interest income we earn on our assets may decrease more rapidly than the interest expense we incur on our liabilities, as borrowers prepay
mortgage loans and mortgage-backed securities and callable investment securities are called or prepaid, thereby requiring us to reinvest these
cash flows at lower interest rates. See ―Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Management of Market Risk.‖

      In addition, changes in interest rates can affect the average life of loans and mortgage-backed and related securities. A reduction in
interest rates results in increased prepayments of loans and mortgage-backed and related securities, as borrowers refinance their debt in order to
reduce their borrowing costs. This creates reinvestment risk, which is the risk that we may not be able to reinvest prepayments at rates that are
comparable to the rates we earned on the prepaid loans or securities. Additionally, increases in interest rates may decrease loan demand and/or
make it more difficult for borrowers to repay adjustable-rate loans.

      Changes in interest rates also affect the current fair value of our investment securities that pay interest. Generally, the value of these
securities moves inversely with changes in interest rates. At March 31, 2010, the fair value of our available for sale securities portfolio,
consisting of mortgage-backed securities issued by U.S. Government sponsored enterprises, collateralized mortgage obligations, municipal
obligations and agency bonds totaled $13.3 million. Net unrealized gains on these securities totaled $247,000 at March 31, 2010.

       We evaluate interest rate sensitivity using a model that estimates the change in our net portfolio value over a range of interest rate
scenarios, also known as a ―rate shock‖ analysis. Net portfolio value is the discounted present value of expected cash flows from assets,
liabilities and off-balance sheet contracts. At March 31, 2010, the ―rate shock‖ analysis indicated that our net portfolio value would decrease by
$2.6 million if there was an instantaneous 200 basis point increase in market interest rates. See ―Management’s Discussion and Analysis of
Financial Condition and Results of Operations—Management of Market Risk.‖

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   The United States economy remains weak and unemployment levels are high. The prolonged economic downturn will adversely affect
   our business and financial results.
      The United States experienced a severe economic recession in 2008 and 2009. While economic growth has resumed recently, the rate of
growth has been slow and unemployment remains at very high levels and is not expected to improve in the near future. Loan portfolio quality
has deteriorated at many financial institutions reflecting, in part, the weak U.S. economy and high unemployment. In addition, the values of
real estate collateral supporting many commercial loans and home mortgages in our market areas have declined and may continue to decline.
The continuing real estate downturn also has resulted in reduced demand for the construction of new housing and in increased delinquencies in
construction, residential and commercial real estate loans. Bank and bank holding company stock prices have declined substantially, and it is
significantly more difficult for banks and bank holding companies to raise capital or borrow in the debt markets.

      The Federal Deposit Insurance Corporation Quarterly Banking Profile has reported that non-performing assets as a percentage of assets
for Federal Deposit Insurance Corporation-insured financial institutions rose to 3.33% as of March 31, 2010, compared to 1.88% as of
December 31, 2008. For the year ended December 31, 2009, the Federal Deposit Insurance Corporation Quarterly Banking Profile has reported
that annualized return on average assets was 0.09% for Federal Deposit Insurance Corporation-insured financial institutions compared to 0.81%
for the year ended December 31, 2007. At March 31, 2010, our non-performing assets as a percentage of total assets was 2.75%. Our
annualized return on average assets was (0.56)% for the three months ended March 31, 2010 compared to a return on average assets of 0.23%
for the year ended December 31, 2009.

      Continued negative developments in the financial services industry and in the domestic and international credit markets may significantly
affect the markets in which we do business, the market for and value of our loans and investments, and our ongoing operations, costs and
profitability. Moreover, continued declines in the stock market in general, or stock values of financial institutions and their holding companies
specifically, may adversely affect our stock performance.

   Legislation has been introduced in Congress that would, among other things, eliminate the Office of Thrift Supervision, tighten capital
   standards, create a new Consumer Financial Protection Bureau and result in new laws and regulations that are expected to increase our
   costs of operations.
      Legislation has been introduced in Congress that would implement significant changes to the current bank regulatory structure. The most
recent bill passed by the U.S. Senate would eliminate our current primary federal regulator, the Office of Thrift Supervision, and require
SharePlus Federal Bank to be regulated by the Office of the Comptroller of the Currency (the primary federal regulator for national banks). The
Senate bill also provides that the Board of Governors of the Federal Reserve System would be responsible for supervising and regulating
savings and loan holding companies like SP Bancorp, Inc., in addition to bank holding companies which it currently regulates. If the Federal
Reserve Board’s current regulations applied to savings and loan holding companies like SP Bancorp, Inc., SP Bancorp, Inc. would become
subject to bank holding company capital requirements to which it is not currently subject, unless the final legislation exempts smaller bank
holding companies from such capital requirements. These capital requirements are substantially similar to the capital requirements currently
applicable to SharePlus Federal Bank, as described in ―Supervision and Regulation—Federal Banking

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Regulation—Capital Requirements.‖ The Senate bill also requires the bank regulators to set minimum capital levels for holding companies that
are comparable to those required for the insured depository subsidiaries, but the components of Tier 1 capital would be restricted to capital
instruments that are currently considered to be Tier 1 capital for insured depository institutions. This would effectively eliminate the ability of
bank holding companies to include trust preferred securities or subordinated debt as Tier 1 capital.

      The proposed legislation would also create a new Consumer Financial Protection Bureau with broad powers to supervise and enforce
consumer protection laws. The Consumer Financial Protection Bureau would have broad rule-making authority for a wide range of consumer
protection laws that would apply to all banks and savings institutions such as SharePlus Federal Bank, including the authority to prohibit
―unfair, deceptive or abusive‖ acts and practices. The Consumer Financial Protection Bureau would have examination and enforcement
authority over all banks and savings institutions with more than $10 billion in assets. Under the Senate bill, banks and savings institutions with
$10 billion or less in assets would be examined by their applicable bank regulators. The new legislation would also weaken the federal
preemption available for national banks and federal savings associations, and would give state attorneys general the ability to enforce
applicable consumer laws.

      The proposed legislation would also broaden the base for Federal Deposit Insurance Corporation insurance assessments to be based on
the average consolidated total assets less tangible equity capital of a financial institution, and restrict bank proprietary trading in securities.
Lastly, the proposed legislation would increase stockholder influence over boards of directors by requiring companies to give stockholders a
non-binding vote on executive compensation, and allow stockholders to nominate their own candidates using a company’s proxy ballots. Public
companies would also be required to adopt majority voting for the election of directors, and the Federal Reserve Board would be directed to
promulgate rules prohibiting excessive compensation paid to bank holding company executives, regardless of whether the company is publicly
traded or not.

   Future legislative or regulatory actions responding to perceived financial and market problems could impair our ability to collect our
   loans and foreclose on collateral.
      Current and future proposals made by members of Congress would reduce the amount distressed borrowers are otherwise contractually
obligated to pay under their mortgage loans, and may limit the ability of lenders to foreclose on mortgage collateral. If proposals such as these,
or other proposals limiting SharePlus Federal Bank’s rights as a creditor, were to be implemented, we could experience increased credit losses
on our loans and mortgage-backed securities, or increased expense in pursuing our remedies as a creditor.

   We are subject to extensive regulatory oversight.
      SharePlus Federal Bank is subject to extensive regulation and supervision. Regulators have intensified their focus on bank lending criteria
and controls, and on the USA PATRIOT Act’s anti-money laundering and Bank Secrecy Act compliance requirements. There also is increased
scrutiny of our compliance practices generally and particularly with the rules enforced by the Office of Foreign Assets Control. It is possible
that we are not in full compliance with these requirements. Our failure to comply with these and other regulatory requirements could lead to,
among other remedies, administrative enforcement actions and legal proceedings. In addition, proposed future legislation and regulations are
likely to have a significant effect on the financial services industry. Regulatory or legislative changes could make regulatory compliance more
difficult or expensive for us, and could cause us to change or limit some of our products and services, or the way we operate our business.

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   Negative developments in the financial industry and the domestic and international credit markets may adversely affect our operations
   and results.
      Negative developments in the global credit and securitization markets during the past two years have resulted in a global recession and
significant uncertainty in the financial markets. Loan portfolio quality has deteriorated at many institutions, reflecting in part, the severely
weakened U.S. economy and higher unemployment. In addition, the values of real estate collateral supporting many commercial loans and
home mortgages in the State of Texas have declined and may continue to decline. Bank and bank holding company stock prices have been
negatively affected, as has the ability of banks and bank holding companies to raise capital or borrow in the debt markets. Specifically, the
Federal Deposit Insurance Corporation Quarterly Banking Profile has reported that noncurrent assets plus other real estate owned as a
percentage of assets for FDIC-insured financial institutions rose to 3.43% as of March 31, 2010, compared to 1.89% as of December 31, 2008
and 0.95% as of December 31, 2007. At March 31, 2010, our non-performing assets as a percentage of total assets was 2.75%. We had an
annualized return on average assets of (0.56)% for the three months ended March 31, 2010 compared to a return on average assets of 0.23% for
the year ended December 31, 2009.

   We operate in a highly regulated environment and may be adversely affected by changes in laws and regulations.
      We are subject to extensive regulation, supervision, and examination by the Office of Thrift Supervision and the Federal Deposit
Insurance Corporation. Federal regulations govern the activities in which we may engage, and are primarily for the protection of depositors and
the Deposit Insurance Fund. These regulatory authorities have extensive discretion in connection with their supervisory and enforcement
activities, including the imposition of restrictions on the operations of a bank, the classification of assets by a bank, and the adequacy of a
bank’s allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations or
legislation, could have a material impact on our results of operations. Because our business is highly regulated, the laws, rules and applicable
regulations are subject to regular modification and change. There can be no assurance that proposed laws, rules and regulations, or any other
laws, rules or regulations, will not be adopted in the future, which could make compliance more difficult or expensive or otherwise adversely
affect our business, financial condition or prospects. Further, we expect any such new laws, rules or regulations will add to our compliance
costs and place additional demands on our management team.

   Strong competition within our market areas may limit our growth and profitability.
       Competition in the banking and financial services industry is intense. In our market areas, we compete with commercial banks, savings
institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment
banking firms operating locally and elsewhere. Some of our competitors have greater name recognition and market presence that benefit them
in attracting business, and offer certain services that we do not or cannot provide. In addition, larger competitors may be able to price loans and
deposits more aggressively than we do, which could affect our ability to grow and remain profitable on a long-term basis. Our profitability
depends upon our continued ability to successfully compete in our market areas. If we must raise interest rates paid on deposits or lower
interest rates charged on our loans, our net interest margin and profitability could be adversely affected. For additional information see
―Business of SharePlus Federal Bank—Competition.‖

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   We may have unanticipated credit risk in our investment securities portfolio.
     At March 31, 2010, $13.3 million, or 5.9% of our assets, consisted of investment securities and mortgage-backed securities, most of
which were issued by, or have principal and interest payments guaranteed by, Fannie Mae or Freddie Mac.

      In September 2008, the Federal Housing Finance Agency placed Fannie Mae and Freddie Mac into federal conservatorship. Although the
federal government has committed substantial capital to Fannie Mae and Freddie Mac, there can be no assurance that these credit facilities and
other capital infusions will be adequate for their needs. If the financial support is inadequate, or if additional support is not provided when
needed, these companies could continue to suffer losses and could fail to honor their guarantees and other obligations. Any changes to the
nature of the guarantees provided by Fannie Mae and Freddie Mac could have a significant adverse effect on the market value and cash flows
of our investment and mortgage-backed securities, resulting in substantial losses.

Risks Related to this Stock Offering
   The future price of our common stock may be less than the purchase price in the stock offering.
      If you purchase shares of common stock in the stock offering, you may not be able to sell them at or above the purchase price in the stock
offering. The purchase price in the offering is based upon an independent third-party appraisal of the pro forma market value of SharePlus
Federal Bank and is subject to review and approval by the Office of Thrift Supervision. The appraisal is not intended, and should not be
construed, as a recommendation of any kind as to the advisability of purchasing shares of our common stock. Our aggregate pro forma market
value as reflected in the final independent appraisal may exceed the market price of our shares of common stock after the completion of the
offering, which may result in our stock trading below the initial offering price of $10.00 per share.

   The capital we raise in the stock offering will reduce our return on equity. This could negatively affect the trading price of our shares of
   common stock.
      Net income divided by average equity, known as ―return on equity,‖ is a ratio many investors use to compare the performance of a
financial institution to its peers. For the year ended December 31, 2009, our return on average equity was 2.90%. Following the stock offering,
we expect our equity to increase from $17.0 million to between $27.0 million at the minimum of the offering range and $33.1 million at the
adjusted maximum of the offering range. Based upon our earnings for the year ended December 31, 2009, and these pro forma equity levels,
our return on equity would be 1.8% and 1.5% at the minimum and adjusted maximum of the offering range, respectively. We expect our return
on equity to remain lower until we are able to leverage the additional capital we receive from the stock offering. Although we will be able to
increase net interest income using proceeds of the stock offering, our return on equity will be reduced by the capital raised in the stock offering,
higher expenses from the costs of being a public company, and added expenses associated with our employee stock ownership plan and the
stock-based benefit plan which we intend to adopt. Until we can increase our net interest income and noninterest income, we expect our return
on equity to remain relatively low compared to our peer group, which may reduce the value of our shares of common stock.

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   We will need to implement additional finance and accounting systems, procedures and controls in order to satisfy our new public
   company reporting requirements.
      Upon completion of the stock offering, we will become a public reporting company. The federal securities laws and regulations of the
Securities and Exchange Commission require that we file annual, quarterly and current reports, and that we maintain effective disclosure
controls and procedures and internal controls over financial reporting. We expect that the obligations of being a public company, including
substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. These
obligations will increase our operating expenses and could divert management’s attention from our banking operations. Compliance with the
Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission will require us to certify the
adequacy of our internal controls and procedures, which could require us to upgrade our systems, and/or hire additional staff, which would
increase our operating costs.

   Our stock-based benefit plans will increase our costs, which will reduce our income.
      We anticipate that our employee stock ownership plan will purchase 8% of the total shares of common stock sold in the stock offering,
with funds borrowed from SP Bancorp, Inc. The cost of acquiring the shares of common stock for the employee stock ownership plan will be
between $1.0 million at the minimum of the offering range and $1.6 million at the adjusted maximum of the offering range. We will record
annual employee stock ownership plan expense in an amount equal to the fair value of shares of common stock committed to be released to
employees. If shares of common stock appreciate in value over time, compensation expense relating to the employee stock ownership plan will
increase.

       We also intend to adopt a stock-based benefit plan after the stock offering that would award participants (at no cost to them) shares of our
common stock and/or options to purchase shares of our common stock. The number of shares reserved for awards of restricted stock or grants
of stock options under any initial stock-based benefit plan may not exceed 4% and 10%, respectively, of the total shares issued in the offering,
if these plans are adopted within 12 months after the completion of the conversion. We may reserve shares of common stock for stock awards
and stock options in excess of these amounts provided the stock-based benefit plan is adopted more than one year following the stock offering.
Assuming the market price of the common stock is $10.00 per share; the options are granted with an exercise price of $10.00 per share; the
dividend yield on the stock is 0%; the expected option life is ten years; the risk free interest rate is 3.84% (based on the ten-year Treasury rate)
and the volatility rate on the shares of common stock is 23.90% (based on an index of publicly traded thrift institutions), the estimated
grant-date fair value of the options using a Black-Scholes option pricing analysis is $4.36 per option granted. Assuming this value is amortized
over a five-year vesting period, the corresponding annual pre-tax expense associated with all the stock options would be $173,000 at the
adjusted maximum of the offering range. In addition, assuming that all shares of restricted stock are awarded at a price of $10.00 per share, and
that the awards vest over a five-year period, the corresponding annual pre-tax expense associated with restricted stock awarded under the
stock-based benefit plan would be $159,000 at the adjusted maximum of the offering range. Moreover, if we grant shares of common stock or
options in excess of these amounts, such grants would increase our costs further.

     The shares of restricted stock granted under the stock-based benefit plan will be expensed by us over their vesting period at the fair
market value of the shares on the date they are awarded. If the shares of restricted stock to be granted under the plan are repurchased in the
open market (rather than issued directly from authorized but unissued shares by SP Bancorp, Inc.) and cost the same as the purchase price

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in the stock offering, the reduction to stockholders’ equity due to the plan would be between $510,000 at the minimum of the offering range
and $794,000 at the adjusted maximum of the offering range. To the extent we repurchase shares of common stock in the open market to fund
the grants of shares under the plan, and the price of such shares exceeds the offering price of $10.00 per share, the reduction to stockholders’
equity would exceed the range described above. Conversely, to the extent the price of such shares is below the offering price of $10.00 per
share, the reduction to stockholders’ equity would be less than the range described above.

   The implementation of stock-based benefit plans may dilute your ownership interest. Historically, the overwhelming majority of
   stock-based benefit plans adopted by savings institutions and their holding companies following mutual-to-stock conversions have been
   approved by stockholders.
      We intend to adopt one or more stock-based benefit plans, which will allow participants to be awarded shares of common stock (at no
cost to them) and/or options to purchase shares of our common stock, following the stock offering. These stock-based benefit plans will be
funded either through open market purchases of shares of common stock, if permitted, or from the issuance of authorized but unissued shares of
common stock. Stockholders would experience a reduction in ownership interest totaling 12.3% in the event newly issued shares are used to
fund stock options or awards of shares of common stock under these plans in an amount equal to 10% and 4%, respectively, of the shares
issued in the stock offering. We may grant shares of common stock and stock options in excess of these amounts provided the stock-based
benefit plan is adopted more than one year following the stock offering. The implementation of the stock-based benefit plan will be subject to
stockholder approval and historically the overwhelming majority of stock-based benefit plans adopted by savings institutions and their holding
companies following mutual-to-stock conversions have been approved by stockholders.

   We have not determined whether we will adopt stock-based benefit plans more than one year following the stock offering. Stock-based
   benefit plans implemented more than one year following the stock offering may exceed regulatory restrictions on the size of stock-based
   benefit plans implemented within one year, which would increase our costs.
      If we adopt stock-based benefit plans more than one year following the completion of the stock offering, then we may reserve shares of
common stock for stock awards or stock options under these plans for more than 4% and 10%, respectively, of our total outstanding shares,
which would increase our costs beyond the amounts estimated in the section titled ―Our stock-based benefit plans will increase our costs, which
will reduce our income.‖ Stock-based benefit plans that provide for awards in excess of these amounts could also result in dilution to
stockholders in excess of that described in the section titled ―The implementation of stock-based benefit plans may dilute your ownership
interest.‖ Although the implementation of our stock-based benefit plans will be subject to stockholder approval, the determination as to the
timing of the implementation of such a plan will be at the discretion of our board of directors.

   We have broad discretion in using the proceeds of the stock offering. Our failure to effectively use such proceeds could reduce our
   profits.
      We will use a portion of the net proceeds to finance the purchase of shares of common stock in the stock offering by the employee stock
ownership plan and we may use the remaining net proceeds to pay dividends to stockholders, repurchase shares of common stock, purchase
investment securities, deposit funds in SharePlus Federal Bank, acquire other financial services companies or for other general corporate
purposes. SharePlus Federal Bank may use the proceeds it receives to fund new loans, establish or acquire new branches, purchase investment
securities, reduce a portion of our borrowings, or for

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general corporate purposes. We have not identified specific amounts of proceeds for any of these purposes and we will have significant
flexibility in determining the amount of net proceeds we apply to different uses and the timing of such applications. Our failure to utilize these
funds effectively could reduce our profitability. We have not established a timetable for the effective deployment of the proceeds and we
cannot predict how long we will require to effectively deploy the proceeds.

   Our stock value may be negatively affected by federal regulations that restrict takeovers.
     For three years following the stock offering, Office of Thrift Supervision regulations prohibit any person from acquiring or offering to
acquire more than 10% of our common stock without the prior written approval of the Office of Thrift Supervision. See ―Restrictions on
Acquisition of SP Bancorp, Inc.‖ for a discussion of applicable Office of Thrift Supervision regulations regarding acquisitions.

   The corporate governance provisions in our articles of incorporation and bylaws and the federal stock charter of SharePlus Federal
   Bank, and the corporate governance provisions under Maryland law, may prevent or impede the holders of our common stock from
   obtaining representation on our board of directors and may impede takeovers of the company that our board might conclude are not in
   the best interest of SP Bancorp, Inc. or its stockholders.
      Provisions in our articles of incorporation and bylaws, as well as the federal stock charter of SharePlus Federal Bank, may prevent or
impede holders of our common stock from obtaining representation on our board of directors and may make takeovers of SP Bancorp, Inc.
more difficult. For example, our board of directors is divided into three classes, only one of which will stand for election annually. A classified
board makes it more difficult for stockholders to change a majority of the directors because it generally takes at least two annual elections of
directors for this to occur. In addition, our articles of incorporation include a provision that no person will be entitled to vote any shares of our
common stock in excess of 10% of our outstanding shares of common stock. This limitation does not apply to the purchase of shares by a
tax-qualified employee stock benefit plan established by us. SharePlus Federal Bank’s federal stock charter will contain a provision that for a
period of five years from the closing of the conversion, no person other than SP Bancorp, Inc. may offer directly or indirectly to acquire the
beneficial ownership of more than 10% of any class of equity security of SharePlus Federal Bank. This limitation does not apply to the
purchase or voting of shares by a tax-qualified employee stock benefit plan established by us, as well as other acquisitions specified in the
federal stock charter. In addition, our articles of incorporation and bylaws restrict who may call special meetings of stockholders and how
directors may be removed from office. Additionally, in certain instances, the Maryland General Corporation Law and our bylaws could require
a supermajority vote of our stockholders to approve a merger or other business combination with a large stockholder, if the proposed
transaction is not approved by a majority of our directors. See ―Restrictions on Acquisition of SP Bancorp, Inc.‖

   We have never issued common stock and there is no guarantee that a liquid market for our common stock will develop.
      We have never issued capital stock and there is no established market for our common stock. We expect that our common stock will be
traded on the Nasdaq Capital Market under the symbol ―SPBC,‖ subject to completion of the offering and compliance with certain conditions,
including the presence of at least three registered and active market makers. Sandler O’Neill & Partners, L.P. has advised us that it intends to
make a market in shares of our common stock following the offering, but it is under no obligation to do so or to continue to do so once it
begins. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market
in shares of our common stock, there can be no assurance that we will be successful in obtaining such commitments.

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                                                  SELECTED FINANCIAL AND OTHER DATA

      The following tables set forth selected historical financial and other data of SharePlus Federal Bank for the periods and at the dates
indicated. The information at December 31, 2009 and 2008 and for the years ended December 31, 2009 and 2008 is derived in part from, and
should be read together with, the audited financial statements and notes thereto of SharePlus Federal Bank beginning at page F-1 of this
prospectus. The information at December 31, 2007, 2006 and 2005 and for the years then ended is derived in part from audited financial
statements that are not included in this prospectus. The information at March 31, 2010 and for the three months ended March 31, 2010 and
2009 is unaudited and reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the
results for the interim periods presented. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of
the results to be achieved for the remainder of 2010 or any other period.

                                                              At March 31,
                                                                  2010                                              At December 31,
                                                                                          2009            2008              2007              2006           2005
                                                                 (unaudited)                                         (In thousands)
Selected Financial Condition Data:
Total assets                                                 $      227,184         $ 208,132           $ 191,000        $ 167,117         $ 179,832       $ 178,826
Total cash and cash equivalents                                      35,542            11,717               5,731            4,000             6,469          11,480
Investments in available for sale securities, at fair
  value                                                              13,281            13,492               8,048               6,442          6,987           4,710
Investments in held to maturity securities                              —                 —                   —                 8,032         13,429          16,839
Loans held for sale                                                   1,457               932                 470               2,079          1,911             872
Loans, net                                                          165,732           170,535             164,462             135,684        140,718         135,156
Premises and equipment                                                4,812             4,905               5,292               5,455          4,821           4,889
Federal Home Loan Bank of Dallas stock, at cost                       1,604             1,605               1,520                 695          1,126           1,331
Other assets                                                          4,756             4,946               5,477               4,730          4,371           3,549
Deposits                                                            192,191           172,591             141,508             139,895        140,131         137,795
Borrowings                                                           15,998            15,995              30,534               8,509         18,797          20,416
Total equity                                                         17,007            17,262              16,774              16,625         17,772          17,875

                                                            Three Months Ended
                                                                 March 31,                                         Years Ended December 31,
                                                            2010             2009                2009          2008           2007               2006            2005
                                                                 (unaudited)                                             (In thousands)
Selected Operating Data:
Interest income                                         $ 2,582            $ 2,619          $ 10,599       $ 9,571        $     9,207        $ 8,617         $ 8,420
Interest expense                                            567                768             2,751         3,064              3,770          3,290           2,434
    Net interest income                                     2,015              1,851              7,848          6,507          5,437            5,327           5,986
Provision for loan losses                                   1,080                136                687            391            749              492             285
    Net interest income after provision for loan
       losses                                                 935              1,715              7,161          6,116          4,688            4,835           5,701
Noninterest income                                            525                541              2,343          2,372          2,428            2,710           2,049
Noninterest expense                                         1,995              2,040              8,649          8,349          8,922            7,754           7,260
Income (loss) before income taxes                             (535 )                216             855           139           (1,806 )          (209 )            490
Income taxes (benefit)                                        (212 )                 82             362           111             (583 )           (64 )            219
     Net income (loss)                                  $     (323 )       $        134     $       493    $       28     $ (1,223 )         $    (145 )     $      271


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                                                 At or For the Three
                                                   Months Ended
                                                      March 31,                           At or For the Years Ended December 31,
                                                2010              2009         2009        2008             2007            2006       2005
Selected Financial Ratios and Other
   Data:
Performance Ratios:
Return (loss) on assets (ratio of net income
   (loss) to average total assets) (1)           (0.56 )%          0.27 %        0.23 %      0.02 %        (0.71 )%         (0.08 )%     0.15 %
Return (loss) on equity (ratio of net income
   (loss) to average equity) (1)                 (7.46 )%          3.18 %        2.90 %     0.17 %        (6.92 )%          (0.80 )%     1.47 %
Interest rate spread (1)(2)                       3.58 %           3.84 %        3.80 %     3.75 %         3.13 %            3.04 %      3.33 %
Net interest margin (1)(3)                        3.65 %           3.95 %        3.90 %     3.88 %         3.31 %            3.20 %      3.41 %
Efficiency ratio (4)                             78.54 %          85.28 %       84.87 %    94.03 %       113.44 %           96.48 %     90.35 %
Non-interest expense to average total
   assets (1)                                     3.47 %           4.14 %        4.11 %      4.71 %         5.15 %           4.41 %      3.89 %
Average interest-earning assets to average
   interest-bearing liabilities                107.45 %         107.00 %       107.54 %   107.36 %       107.85 %         107.64 %     106.08 %
Average equity to average total assets           7.54 %           8.54 %         8.07 %     9.38 %        10.20 %          10.35 %       9.92 %
Asset Quality Ratios:
Non-performing assets to total assets             2.75 %           0.70 %        1.65 %      0.77 %         2.17 %           0.30 %      0.23 %
Non-performing loans to total loans               3.71 %           0.77 %        1.99 %      0.89 %         2.26 %           0.24 %      0.31 %
Allowance for loan losses to
   non-performing loans                          31.89 %          41.27 %       27.42 %    32.65 %         12.25 %        230.88 %     127.95 %
Allowance for loan losses to total loans          1.18 %           0.32 %        0.55 %     0.29 %          0.28 %          0.55 %       0.39 %
Capital Ratios:
Total capital (to risk-weighted assets)          13.24 %          12.60 %       12.45 %    12.63 %         14.13 %          15.29 %     16.97 %
Tier I capital (to risk-weighted assets)         12.48 %          12.30 %       11.99 %    12.28 %         13.82 %          14.64 %     16.48 %
Tier I capital (to average assets)                7.38 %           7.96 %        8.21 %     8.74 %          9.95 %           9.93 %     10.19 %
Other Data:
Number of full service offices                       8                8            8            9              9                9          9
Full time equivalent employees                      59               61           59           63             66               61         59

(1)   Ratios for the three months ended March 31, 2010 and 2009 are annualized.
(2)   The interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average
      cost of interest-bearing liabilities for the period.
(3)   The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(4)   The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

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                               CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus contains forward-looking statements, which can be identified by the use of words such as ―estimate,‖ ―project,‖
―believe,‖ ―intend,‖ ―anticipate,‖ ―plan,‖ ―seek,‖ ―expect,‖ ―will,‖ ―may‖ and words of similar meaning. These forward-looking statements
include, but are not limited to:
        •    statements of our goals, intentions and expectations;
        •    statements regarding our business plans, prospects, growth and operating strategies;
        •    statements regarding the asset quality of our loan and investment portfolios; and
        •    estimates of our risks and future costs and benefits.

      These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking
statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty
to and do not take any obligation to update any forward-looking statements after the date of this prospectus.

     The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations
expressed in the forward-looking statements:
        •    general economic conditions, either nationally or in our market areas, that are worse than expected;
        •    competition among depository and other financial institutions;
        •    changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;
        •    adverse changes in the securities markets;
        •    changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and
             capital requirements;
        •    our ability to enter new markets successfully and capitalize on growth opportunities;
        •    our ability to successfully integrate acquired entities, if any;
        •    changes in consumer spending, borrowing and savings habits;
        •    changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting
             Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;
        •    changes in our organization, compensation and benefit plans;

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        •    changes in our financial condition or results of operations that reduce capital; and
        •    changes in the financial condition or future prospects of issuers of securities that we own.

      Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated
by these forward-looking statements. Please see ―Risk Factors‖ beginning on page 16.


                                  HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING

      Although we cannot determine what the actual net proceeds from the sale of the shares of common stock in the offering will be until the
offering is completed, we anticipate that the net proceeds will be between $11.5 million and $15.9 million, or $18.5 million if the offering
range is increased by 15%.

      We intend to distribute the net proceeds from the stock offering as follows:

                                                                        Based Upon the Sale at $10.00 Per Share of
                                       1,275,000 Shares                1,500,000 Shares                  1,725,000 Shares               1,983,750 Shares (1)
                                                     Percent                         Percent                           Percent                         Percent
                                                      of Net                          of Net                            of Net                          of Net
                                     Amount         Proceeds         Amount         Proceeds          Amount          Proceeds         Amount         Proceeds
                                                                                  (Dollars in thousands)
Stock offering proceeds          $ 12,750                        $ 15,000                          $ 17,250                        $ 19,838
Less offering expenses             (1,261 )                        (1,292 )                          (1,323 )                        (1,359 )
      Net offering proceeds      $ 11,489             100.0 %    $ 13,708              100.0 %     $ 15,927             100.0 %    $ 18,479             100.0 %

Use of net proceeds:
    To SharePlus Federal
       Bank                      $      5,745          50.0 %    $      6,854            50.0 %    $    7,964            50.0 %    $      9,239          50.0 %
    To fund loan to
       employee stock
       ownership plan                   1,020            8.9 %          1,200             8.8 %         1,380              8.7 %          1,587            8.6 %
      Retained by SP
        Bancorp, Inc.            $      4,725          41.1 %    $      5,654            41.2 %    $    6,584            41.3 %    $      7,652          41.4 %



(1)   As adjusted to give effect to an increase in the number of shares, which could occur due to a 15% increase in the offering range to reflect
      demand for the shares or changes in market conditions following the commencement of the offering.

       Payments for shares of common stock made through withdrawals from existing deposit accounts will not result in the receipt of new
funds for investment but will result in a reduction of SharePlus Federal Bank’s deposits. The net proceeds may vary because the total expenses
relating to the offering may be more or less than our estimates. For example, our expenses would increase if a syndicated community offering
were used to sell shares of common stock not purchased in the subscription and community offerings.

      SP Bancorp, Inc. may use the proceeds it retains from the stock offering:
        •    to fund a loan to the employee stock ownership plan to purchase shares of common stock in the stock offering;
        •    to invest in mortgage-backed securities, collateralized mortgage obligations, municipal obligations or debt securities issued by
             agencies of, or entities sponsored by, the United States Government;
        •    to acquire other financial institutions or other financial services companies;

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        •    to pay cash dividends to stockholders;
        •    to repurchase shares of our common stock; and
        •    for other general corporate purposes.

      With the exception of the funding of the loan to the employee stock ownership plan, SP Bancorp, Inc. has not determined how much of
the net offering proceeds it intends to use for each of the foregoing purposes. Additionally, we do not currently intend to pay cash dividends in
the immediate future after completion of the conversion and stock offering. Initially, we intend to invest a substantial portion of the net
proceeds in short-term investments, investment-grade debt obligations and mortgage-backed securities.

      Under current Office of Thrift Supervision regulations, we may not repurchase shares of our common stock during the first year
following the conversion, except to fund stockholder-approved stock-based benefit plans other than stock options or except when extraordinary
circumstances exist and with prior regulatory approval.

      SharePlus Federal Bank may use the net proceeds it receives from the stock offering:
        •    to expand its banking franchise by establishing or acquiring new branches, or by acquiring other financial institutions or other
             financial services companies;
        •    to fund new loans;
        •    to repay short-term borrowings;
        •    to invest in mortgage-backed securities, collateralized mortgage obligations, municipal obligations or debt securities issued by
             agencies of, or entities sponsored by, the United States Government; and
        •    for other general corporate purposes.

      SharePlus Federal Bank has not determined how much of the net offering proceeds it intends to use for each of the foregoing purposes.
Moreover, the actual cost to acquire or open a new branch may vary significantly depending on the particular opportunity available. Our
short-term and long-term growth plans anticipate that, upon completion of the offering, we will experience growth through increased lending
and investment activities, cross-selling our products and services to our customers and, possibly, branch acquisitions. We currently have no
understandings or agreements to acquire other banks, thrifts, other financial services companies, or branch offices of any such institutions.

      Initially, the net proceeds we retain will be invested in short-term investments, investment-grade debt obligations and mortgage-backed
securities.


                                                     OUR POLICY REGARDING DIVIDENDS

      Following completion of the stock offering, our board of directors will have the authority to declare dividends on our shares of common
stock, subject to statutory and regulatory requirements. Our board of directors currently does not intend to pay a dividend immediately
following completion of the

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stock offering. Future dividend payments will depend on a number of factors including our capital requirements, our financial condition and
results of operations, tax considerations, statutory and regulatory limitations and general economic conditions. We cannot assure you that we
will pay any dividends or that, if we pay dividends, we will not reduce or eliminate them in the future. Special cash dividends, stock dividends
or returns of capital, to the extent permitted by Office of Thrift Supervision policy and regulations, may be paid in addition to, or in lieu of,
regular cash dividends. We will file a consolidated tax return with SharePlus Federal Bank. Accordingly, it is anticipated that any cash
distributions we pay to our stockholders would be treated as cash dividends and not as a non-taxable return of capital for federal and state tax
purposes. Additionally, pursuant to Office of Thrift Supervision regulations, during the three-year period following the stock offering, we will
not take any action to declare an extraordinary dividend to stockholders that would be treated by recipients as a tax-free return of capital for
federal income tax purposes.

      Pursuant to our Articles of Incorporation, we are authorized to issue preferred stock. If we issue preferred stock, the holders thereof may
have a priority over the holders of our shares of common stock with respect to the payment of dividends. For a further discussion concerning
the payment of dividends on our shares of common stock, see ―Description of Capital Stock—Common Stock.‖ Dividends we can declare and
pay will depend, in part, upon receipt of dividends from SharePlus Federal Bank, because initially we will have no source of income other than
dividends from SharePlus Federal Bank, earnings from the investment of proceeds from the sale of shares of common stock, and interest
payments received in connection with the loan to the employee stock ownership plan. A regulation of the Office of Thrift Supervision imposes
limitations on ―capital distributions‖ by savings institutions. See ―Supervision and Regulation—Federal Banking Regulation—Capital
Distributions.‖


                                                  MARKET FOR THE COMMON STOCK

      We have never issued capital stock and there is no established market for our shares of common stock. We expect that our shares of
common stock will be traded on the Nasdaq Capital Market under the symbol ―SPBC,‖ subject to completion of the offering and compliance
with certain conditions, including the presence of at least three registered and active market makers. Sandler O’Neill & Partners, L.P. has
advised us that it intends to make a market in shares of our common stock following the offering, but it is under no obligation to do so or to
continue to do so once it begins. While we will attempt before completion of the offering to obtain commitments from at least two other
broker-dealers to make a market in shares of our common stock, there can be no assurance that we will be successful in obtaining such
commitments.

       The development and maintenance of a public market, having the desirable characteristics of depth, liquidity and orderliness, depends on
the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active
buyers and sellers of shares of our common stock at any particular time may be limited, which may have an adverse effect on the price at which
shares of our common stock can be sold. There can be no assurance that persons purchasing the shares of common stock will be able to sell
their shares at or above the $10.00 offering purchase price per share. You should have a long-term investment intent if you purchase shares of
our common stock and you should recognize that there may be a limited trading market in the shares of our common stock.

                                                                        31
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                                           HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE

      At March 31, 2010, SharePlus Federal Bank exceeded all of the applicable regulatory capital requirements. The table below sets forth the
historical equity capital and regulatory capital of SharePlus Federal Bank at March 31, 2010, and the pro forma regulatory capital of SharePlus
Federal Bank, after giving effect to the sale of shares of common stock at a $10.00 per share purchase price. The table assumes the receipt by
SharePlus Federal Bank of 50% of the net offering proceeds. See ―How We Intend to Use the Proceeds from the Offering.‖

                                     SharePlus Federal
                                     Bank Historical at
                                      March 31, 2010                                  Pro Forma at March 31, 2010, Based Upon the Sale in the Offering of
                                               Percent of
                                    Amount     Assets (2)         1,275,000 Shares                1,500,000 Shares               1,725,000 Shares               1,983,750 Shares (1)
                                                                             Percent of                      Percent of                     Percent of                      Percent of
                                                               Amount         Assets (2)     Amount           Assets (2)      Amount         Assets (2)       Amount         Assets (2)
                                                                                            (Dollars in thousands)
Equity (4)                          $ 17,007          7.49 %   $ 21,732              9.33 % $ 22,661                 9.68 %   $ 23,591              10.03 %   $ 24,659             10.43 %
Tangible capital (4)                $ 16,752          7.38 %   $ 21,477              9.23 % $ 22,406                 9.58 %   $ 23,336               9.93 %   $ 24,404             10.33 %
Tangible requirement                   3,404          1.50        3,490              1.50        3,507               1.50        3,523               1.50        3,543              1.50

Excess                              $ 13,348          5.88 %   $ 17,987              7.73 %   $ 18,899               8.08 %   $ 19,813               8.43 %   $ 20,861              8.83 %


Core capital (4)                    $ 16,752          7.38 %   $ 21,477              9.23 %   $ 22,406               9.58 %   $ 23,336               9.93 %   $ 24,404             10.33 %
Core requirement (5)                   9,077          4.00        9,307              4.00        9,351               4.00        9,396               4.00        9,447              4.00

Excess                              $   7,675         3.38 %   $ 12,170              5.23 %   $ 13,055               5.58 %   $ 13,940               5.93 %   $ 14,957              6.33 %


Tier 1 risk-based capital (3) (4)   $ 16,752         12.48 %   $ 21,477             15.66 %   $ 22,406              16.28 %   $ 23,336              16.88 %   $ 24,404             17.57 %
Risk-based requirement                 5,370          4.00        5,484              4.00        5,507               4.00        5,529               4.00        5,554              4.00

Excess                              $ 11,382          8.48 %   $ 15,993             11.66 %   $ 16,899              12.28 %   $ 17,807              12.88 %   $ 18,850             13.57 %


Total risk-based capital (3) (4)    $ 17,774         13.24 %   $ 22,499             16.41 %   $ 23,428              17.02 %   $ 24,358              17.62 %   $ 25,426             18.31 %
Risk-based requirement                10,739          8.00       10,969              8.00       11,013               8.00       11,058               8.00       11,109              8.00

Excess                              $   7,035         5.24 %   $ 11,530              8.41 %   $ 12,415               9.02 %   $ 13,300               9.62 %   $ 14,317             10.31 %


Reconciliation of capital
   infused into SharePlus
   Federal Bank:
Net proceeds                                                   $   5,745                      $    6,854                      $   7,964                       $   9,239
Less: Common stock to be
   acquired by employee stock
   ownership plan                                                  (1,020 )                        (1,200 )                       (1,380 )                        (1,587 )

Pro forma increase                                             $   4,725                      $    5,654                      $   6,584                       $   7,652




(1)      As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect
         demand for the shares or changes in market conditions following the commencement of the offering.
(2)      Tangible and core capital levels are shown as a percentage of total adjusted assets. Risk-based capital levels are shown as a percentage of
         risk-weighted assets.
(3)      Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 50% risk weighting.
(4)      Pro forma capital levels assume that the employee stock ownership plan purchases 8% of the shares of common stock to be outstanding
         immediately following the stock offering with funds we lend. Pro forma GAAP and regulatory capital have been reduced by the amount
         required to fund this plan. See ―Management of SP Bancorp, Inc.‖ for a discussion of the employee stock ownership plan.
(5)      The current Office of Thrift Supervision core capital requirement for financial institutions is 3% of total adjusted assets for financial
         institutions that receive the highest supervisory rating for safety and soundness and a 4% to 5% core capital ratio requirement for all
         other financial institutions.
(6)      Set forth on the following page is a reconciliation of SharePlus Federal Bank’s equity capital to the respective tangible, core, Tier 1
         risk-based and total risk-based capital.

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                                                                         Pro Forma at March 31, 2010, Based Upon the Sale in the Offering of
                                                Historical at          1,275,000            1,500,000            1,725,000              1,983,750
                                               March 31, 2010           Shares                Shares               Shares                Shares
                                                                                     (In thousands)
Equity                                         $      17,007          $ 21,732             $ 22,661             $ 23,591              $ 24,659
Disallowed deferred tax asset                           (102 )            (102 )               (102 )               (102 )                (102 )
Unrealized gain on securities, net                      (153 )            (153 )               (153 )               (153 )                (153 )
Tangible, Core and Tier 1 risk-based capital          16,752             21,477                22,406               23,336                24,404
General Allowance for loan losses                      1,022              1,022                 1,022                1,022                 1,022
Total risk-based capital                       $      17,774          $ 22,499             $ 23,428             $ 24,358              $ 25,426


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                                                              CAPITALIZATION

      The following table presents the historical capitalization of SharePlus Federal Bank at March 31, 2010 and the pro forma consolidated
capitalization of SP Bancorp, Inc., after giving effect to the conversion and the offering, based upon the assumptions set forth in the ―Pro
Forma Data‖ section.

                                                       SharePlus
                                                     Federal Bank
                                                      Historical at                                SP Bancorp, Inc. Pro Forma,
                                                     March 31, 2010                 Based Upon the Sale in the Offering at $10.00 per Share of
                                                                            1,275,000              1,500,000             1,725,000               1,983,750
                                                                             Shares                  Shares                Shares                Shares (1)
                                                                                        (Dollars in thousands)
Deposits (2)                                       $       192,191      $     192,191           $    192,191           $    192,191          $     192,191
Borrowings                                                  15,998             15,998                 15,998                 15,998                 15,998
           Total deposits and borrowed funds       $       208,189      $     208,189           $    208,189           $    208,189          $     208,189

Stockholders’ equity:
     Preferred stock $0.01 par value,
       50,000,000 shares authorized; none
       issued or outstanding                       $            —       $          —            $         —            $         —           $           —
     Common stock $0.01 par value,
       100,000,000 shares authorized;
       assuming shares outstanding as shown (3)                —                   13                     15                     17                      20
     Additional paid-in capital (4)                            —               11,476                 13,693                 15,910                  18,459
     Retained earnings (5)                                  16,854             16,854                 16,854                 16,854                  16,854
     Accumulated other comprehensive income                    153                153                    153                    153                     153
Less:
     Common stock to be acquired by employee
       stock ownership plan (6)                                 —               (1,020 )               (1,200 )               (1,380 )               (1,587 )
     Common stock to be acquired by
       stock-based benefit plans (7)                            —                 (510 )                 (600 )                 (690 )                  (794 )
      Total stockholders’ equity                   $        17,007      $      26,966           $     28,915           $     30,864          $       33,105

      Total stockholders’ equity as a percentage
        of total assets (2)                                    7.49 %            11.37 %                12.09 %                12.80 %                13.61 %

(1)   As adjusted to give effect to an increase in the number of shares of common stock that could occur due to a 15% increase in the offering
      range to reflect demand for shares or changes in market conditions following the commencement of the subscription and community
      offerings.
(2)   Does not reflect withdrawals from deposit accounts for the purchase of shares of common stock in the conversion and offering. These
      withdrawals would reduce pro forma deposits and assets by the amount of the withdrawals.
(3)   No effect has been given to the issuance of additional shares of SP Bancorp, Inc. common stock pursuant to one or more stock-based
      benefit plans. If these plans are implemented within 12 months following the completion of the stock offering, an amount up to 10% and
      4% of the shares of SP Bancorp, Inc. common stock sold in the offering will be reserved for issuance upon the exercise of stock options
      and for issuance as restricted stock awards, respectively, with the amount reserved for restricted stock awards reduced by amounts
      purchased in the stock offering by our 401(k) plan using its purchase priority in the stock offering. See ―Management of SP Bancorp,
      Inc.‖
(4)   The sum of the par value of the total shares outstanding and additional paid-in capital equals the net stock offering proceeds at the
      offering price of $10.00 per share.
(5)   The retained earnings of SharePlus Federal Bank will be substantially restricted after the conversion. See ―Our Policy Regarding
      Dividends,‖ ―The Conversion; Plan of Distribution—Liquidation Rights‖ and ―Supervision and Regulation.‖
(6)   Assumes that 8% of the shares sold in the offering will be acquired by the employee stock ownership plan financed by a loan from SP
      Bancorp, Inc. The loan will be repaid principally from SharePlus Federal Bank’s contributions to the employee stock ownership plan.
      Since SP Bancorp, Inc. will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no
      asset or liability will be reflected on SP Bancorp, Inc.’s consolidated financial statements. Accordingly, the amount of shares of common
      stock acquired by the employee stock ownership plan is shown in this table as a reduction of total stockholders’ equity.
(7)   Assumes a number of shares of common stock equal to 4% of the shares of common stock to be sold in the offering will be purchased for
grant by one or more stock-based benefit plans in open market purchases. The dollar amount of common stock to be purchased is based
on the $10.00 per share subscription price in the offering and represents unearned compensation. This amount does not reflect possible
increases or decreases in the value of common stock relative to the subscription price in the offering. As SP Bancorp, Inc. accrues
compensation expense to reflect the vesting of shares pursuant to the stock-based benefit plans, the credit to equity will be offset by a
charge to noninterest expense. Implementation of the stock-based benefit plans will require stockholder approval.

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                                                              PRO FORMA DATA

      The following tables summarize historical data of SharePlus Federal Bank and pro forma data of SP Bancorp, Inc. at and for the three
months ended March 31, 2010 and the year ended December 31, 2009. This information is based on assumptions set forth below and in the
table, and should not be used as a basis for projections of market value of the shares of common stock following the conversion and offering.

      The net proceeds in the tables are based upon the following assumptions:
        •    all shares of common stock will be sold in the subscription and community offerings;
        •    200,000 shares of common stock will be purchased by our executive officers and directors, and their associates;
        •    our employee stock ownership plan will purchase 8% of the shares of common stock sold in the stock offering with a loan from SP
             Bancorp, Inc. The loan will be repaid in substantially equal payments of principal and interest (at the prime interest rate, adjusted
             annually) over a period of 20 years;
        •    Sandler O’Neill & Partners, L.P. will receive a fee equal to 1.5% of the dollar amount of the shares of common stock sold in the
             stock offering. Shares purchased by our employee benefit plans or by our officers, directors and employees, and their immediate
             families will not be included in calculating the shares of common stock sold for this purpose; and
        •    expenses of the stock offering, other than fees and expenses to be paid to Sandler O’Neill & Partners, L.P., will be $1.0 million.

      Pro forma earnings on net proceeds have been calculated assuming the stock has been sold at the beginning of the period and the net
proceeds have been invested at a yield of 2.55% for the three months ended March 31, 2010 and 2.69% for the year ended December 31, 2009.
This represents the five-year United States Treasury Note as of March 31, 2010 and December 31, 2009, which, in light of current market
interest rates, we consider to more accurately reflect the pro forma reinvestment rate than the arithmetic average of the weighted average yield
earned on our interest-earning assets and the weighted average rate paid on our deposits, which is the reinvestment rate generally required by
Office of Thrift Supervisions regulations. The pro forma after-tax yield on the net proceeds from the offering is assumed to be 1.58% for the
three months ended March 31, 2010 and 1.67% for the year ended December 31, 2009, based on an effective tax rate of 38.0%.

      We calculated historical and pro forma per share amounts by dividing historical and pro forma amounts of consolidated net income and
stockholders’ equity by the indicated number of shares of common stock. We adjusted these figures to give effect to the shares of common
stock purchased by the employee stock ownership plan. We computed per share amounts for each period as if the shares of common stock were
outstanding at the beginning of each period, but we did not adjust per share historical or pro forma stockholders’ equity to reflect the earnings
on the estimated net proceeds.

      The pro forma tables give effect to the implementation of stock-based benefit plans. Subject to the receipt of stockholder approval, we
have assumed that the stock-based benefit plans will acquire for restricted stock awards a number of shares of common stock equal to 4% of
our outstanding shares of common stock at the same price for which they were sold in the stock offering. We assume that shares of common
stock are granted under the plans in awards that vest over a five-year period.

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      We have also assumed that the stock-based benefit plans will grant options to acquire shares of common stock equal to 10% of our
outstanding shares of common stock. In preparing the tables below, we assumed that stockholder approval was obtained, that the exercise price
of the stock options and the market price of the stock at the date of grant were $10.00 per share and that the stock options had a term of ten
years and vested over five years. We applied the Black-Scholes option pricing model to estimate a grant-date fair value of $4.36 for each
option. In addition to the terms of the options described above, the Black-Scholes option pricing model assumed an estimated volatility rate of
23.90% for the shares of common stock, a dividend yield of 0.0%, an expected option life of ten years and a risk-free interest rate of 3.84%.
Finally, we assumed that 25% of the stock options were non-qualified options granted to directors, resulting in a tax benefit (at an assumed tax
rate of 38.0%) for a deduction equal to the grant date fair value of the options.

      We may reserve shares for the exercise of stock options and the grant of stock awards under one or more stock-based benefit plans in
excess of 10% and 4%, respectively, of our total outstanding shares if the stock-based benefit plans are adopted more than one year following
the stock offering. In addition, we may grant options and award shares that vest sooner than over a five-year period if the stock-based benefit
plans are adopted more than one year following the stock offering.

      As discussed under ―How We Intend to Use the Proceeds from the Offering,‖ we intend to contribute at least 50% of the net proceeds
from the stock offering to SharePlus Federal Bank, and we will retain the remainder of the net proceeds from the stock offering. We will use a
portion of the proceeds we retain for the purpose of making a loan to the employee stock ownership plan and retain the rest of the proceeds for
future use.

      The pro forma table does not give effect to:
        •    withdrawals from deposit accounts for the purpose of purchasing shares of common stock in the stock offering;
        •    our results of operations after the stock offering; or
        •    changes in the market price of the shares of common stock after the stock offering.

       The following pro forma information may not represent the financial effects of the stock offering at the date on which the stock offering
actually occurs and you should not use the table to indicate future results of operations. Pro forma stockholders’ equity represents the difference
between the stated amount of our assets and liabilities, computed in accordance with GAAP. We did not increase or decrease stockholders’
equity to reflect the difference between the carrying value of loans and other assets and their market value. Pro forma stockholders’ equity is
not intended to represent the fair market value of the shares of common stock and may be different than the amounts that would be available for
distribution to stockholders if we liquidated. Pro forma stockholders’ equity does not give effect to the impact of intangible assets or the
liquidation account we will establish in the conversion in the unlikely event we are liquidated.

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                                                                               At or For the Three Months Ended March 31, 2010
                                                                                   Based Upon the Sale at $10.00 Per Share of
                                                              1,275,000                 1,500,000                   1,725,000          1,983,750
                                                               Shares                     Shares                     Shares            Shares (1)
                                                                                (Dollars in thousands, except per share amounts)
Gross Proceeds of Offering                                $        12,750          $        15,000           $        17,250       $        19,838
Less: expenses                                                     (1,261 )                 (1,292 )                  (1,323 )              (1,359 )
     Estimated net proceeds                                        11,489                   13,708                    15,927                18,479
Less: Common stock purchased by ESOP (2)                           (1,020 )                 (1,200 )                  (1,380 )              (1,587 )
Less: Common stock awarded under stock-based benefit
  plans (3)                                                          (510 )                    (600 )                    (690 )                (794 )
     Estimated net cash proceeds                          $         9,959          $        11,908           $        13,857       $        16,098

For the Three Months Ended March 31, 2010
Consolidated net (loss):
     Historical                                           $          (323 )        $           (323 )        $           (323 )    $           (323 )
     Pro forma income on net proceeds                                  39                        47                        55                    64
     Pro forma ESOP adjustment (2)                                     (8 )                      (9 )                     (11 )                 (12 )
     Pro forma stock award adjustment (3)                             (16 )                     (19 )                     (22 )                 (25 )
     Pro forma stock option adjustment (4)                            (25 )                     (30 )                     (34 )                 (39 )
           Pro forma net (loss)                           $          (333 )        $           (334 )        $           (335 )    $           (335 )

Per share net (loss)
     Historical                                           $          (0.28 )       $          (0.23 )        $          (0.20 )    $          (0.18 )
     Pro forma income on net proceeds                                 0.03                     0.03                      0.03                  0.04
     Pro forma ESOP adjustment (2)                                   (0.01 )                  (0.01 )                   (0.01 )               (0.01 )
     Pro forma stock award adjustment (3)                            (0.01 )                  (0.01 )                   (0.01 )               (0.01 )
     Pro forma stock option adjustment (4)                           (0.02 )                  (0.02 )                   (0.02 )               (0.02 )
           Pro forma net (loss) per share (5)             $          (0.29 )       $          (0.24 )        $          (0.21 )    $          (0.18 )

Offering price as a multiple of pro forma net earnings
  per share (7)                                                       NM                        NM                        NM                    NM
Number of shares outstanding for pro forma net (loss)
  per share calculations (5)                                   1,174,275                 1,381,500                1,588,725             1,827,034
At March 31, 2010
Stockholders’ equity:
     Historical                                           $        17,007          $        17,007           $        17,007       $        17,007
     Estimated net proceeds                                        11,489                   13,708                    15,927                18,479
     Less: Common stock acquired by ESOP (2)                       (1,020 )                 (1,200 )                  (1,380 )              (1,587 )
     Less: Common stock awarded under stock-based
       benefit plans (3) (4)                                         (510 )                    (600 )                    (690 )                (794 )
           Pro forma stockholders’ equity                 $        26,966          $        28,915           $        30,864       $        33,105

Stockholders’ equity per share:
    Historical                                            $         13.34          $          11.34          $           9.86      $           8.57
    Estimated net proceeds                                           9.01                      9.14                      9.23                  9.32
    Less: Common stock acquired by ESOP (2)                         (0.80 )                   (0.80 )                   (0.80 )               (0.80 )
    Less: Common stock awarded under stock-based
      benefit plans (3) (4)                                          (0.40 )                  (0.40 )                   (0.40 )               (0.40 )
           Pro forma stockholders’ equity per share (6)   $         21.15          $          19.28          $          17.89      $          16.69

Offering price as percentage of pro forma stockholders’
  equity per share                                                  47.28 %                   51.87 %                   55.90 %               59.92 %
Number of shares outstanding for pro forma book value
  per share calculations                                       1,275,000                 1,500,000                1,725,000             1,983,750
     (footnotes begin on following page)

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(Footnotes from previous page)

(1)   As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect
      demand for the shares or changes in market conditions following the commencement of the offering.
(2)   Assumes that 8% of shares of common stock sold in the offering will be purchased by the employee stock ownership plan. For purposes
      of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from SP
      Bancorp, Inc. SharePlus Federal Bank intends to make annual contributions to the employee stock ownership plan in an amount at least
      equal to the required principal and interest payments on the debt. SharePlus Federal Bank’s total annual payments on the employee stock
      ownership plan debt are based upon 20 equal annual installments of principal and interest. Financial Accounting Standards Board
      Accounting Standards Codification 718-40, ―Employers’ Accounting for Employer Stock Ownership Plans‖ (―ASC 718-40‖) requires
      that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees.
      The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the
      number of loan repayment installments assumed to be paid by SharePlus Federal Bank, the fair value of the common stock remains equal
      to the subscription price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of
      38.0%. The unallocated employee stock ownership plan shares are reflected as a reduction of stockholders’ equity. No reinvestment is
      assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 1,275,
      1,500, 1,725 and 1,984 shares were committed to be released during the three months ended March 31, 2010 at the minimum, midpoint,
      maximum, and adjusted maximum of the offering range, respectively, and in accordance with ASC 718-40, only the employee stock
      ownership plan shares committed to be released during the period were considered outstanding for purposes of income per share
      calculations.
(3)   If approved by SP Bancorp, Inc.’s stockholders, one or more stock-based benefit plans may purchase an aggregate number of shares of
      common stock equal to 4% of the shares to be sold in the offering (or possibly a greater number of shares if the plan is implemented
      more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans, and purchases by the plan
      may not occur earlier than six months after the completion of the conversion. The shares may be acquired directly from SP Bancorp, Inc.
      or through open market purchases. The funds to be used by the stock-based benefit plans to purchase the shares will be provided by SP
      Bancorp, Inc. The table assumes that (i) the stock-based benefit plans acquire the shares through open market purchases at $10.00 per
      share, (ii) 20% of the amount contributed to the stock-based benefit plans is amortized as an expense during the fiscal year, and (iii) the
      stock-based benefit plans expense reflects an effective combined federal and state tax rate of 38.0%. Assuming stockholder approval of
      the stock-based benefit plans and that shares of common stock equal to 4% of the shares sold in the offering are awarded through the use
      of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by
      approximately 3.8%.
(4)   If approved by SP Bancorp, Inc.’s stockholders, one or more stock-based benefit plans may grant options to acquire an aggregate number
      of shares of common stock equal to 10% of the shares to be sold in the offering (or possibly a greater number of shares if the plan is
      implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans may not
      occur earlier than six months after the completion of the conversion. In calculating the pro forma effect of the stock options to be granted
      under stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the
      date of grant were $10.00 per share, the estimated grant-date fair value determined using the Black-Scholes option pricing model was
      $4.36 for each option, the aggregate grant-date fair value of the stock options was amortized to expense on a straight-line basis over a
      five-year vesting period of the options. The actual expense of the stock options to be granted under the stock-based benefit plans will be
      determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions
      used in the option pricing model ultimately adopted. Under the above assumptions, the adoption of the stock-based benefit plans will
      result in no additional shares under the treasury stock method for purposes of calculating earnings per share. There can be no assurance
      that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares to satisfy the
      exercise of options under the stock-based benefit plans is obtained from the issuance of authorized but unissued shares, our net income
      per share and stockholders’ equity per share would decrease. Assuming stockholder approval of the stock-based benefit plans and that
      shares of common stock used to fund stock options (equal to 10% of the shares sold in the offering) are awarded through the use of
      authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately
      9.1%.
(5)   Income per share computations are determined by taking the number of shares assumed to be sold in the offering and, in accordance with
      ASC 718-40, subtracting the employee stock ownership plan shares that have not been committed for release during the period. Income
      per share computations assume that 8% of the shares of common stock sold in the offering will be purchased by the employee stock
      ownership plan, equal to 102,000, 120,000, 138,000 and 158,700 shares at the minimum, midpoint, maximum and adjusted maximum of
      the offering range, respectively, and an equal number of shares (1/20th of the total per year based on a 20-year loan) will be released each
      year over the term of the loan. Income per share computations assume that 1,275, 1,500, 1,725 and 1,984 shares were committed to be
      released during the three months ended March 31, 2010 at the minimum, midpoint, maximum and adjusted maximum of the offering
      range, respectively, resulting in employee stock ownership plan shares that have not been committed to be released during the period of
      100,725, 118,500, 136,275 and 156,716 at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively.
38
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(6)   The retained earnings of SharePlus Federal Bank will be substantially restricted after the conversion. See ―Our Policy Regarding
      Dividends,‖ ―The Conversion; Plan of Distribution—Liquidation Rights‖ and ―Supervision and Regulation.‖ The number of shares used
      to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the
      offering.
(7)   NM is not meaningful.

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                                                                                 At or For the Year Ended December 31, 2009
                                                                                  Based Upon the Sale at $10.00 Per Share of
                                                              1,275,000                1,500,000                   1,725,000          1,983,750
                                                               Shares                    Shares                     Shares            Shares (1)
                                                                               (Dollars in thousands, except per share amounts)
Gross Proceeds of Offering                                $        12,750         $         15,000           $        17,250      $        19,838
Less: expenses                                                     (1,261 )                 (1,292 )                  (1,323 )             (1,359 )
     Estimated net proceeds                                        11,489                   13,708                    15,927               18,479
Less: Common stock purchased by ESOP (2)                           (1,020 )                 (1,200 )                  (1,380 )             (1,587 )
Less: Common stock awarded under stock-based benefit
  plans (3)                                                          (510 )                   (600 )                     (690 )               (794 )
     Estimated net cash proceeds                          $         9,959         $         11,908           $        13,857      $        16,098

For the Year Ended December 31, 2009
Consolidated net income:
     Historical                                           $           493         $            493           $            493     $            493
     Pro forma income on net proceeds                                 166                      199                        231                  268
     Pro forma ESOP adjustment (2)                                    (32 )                    (37 )                      (43 )                (49 )
     Pro forma stock award adjustment (3)                             (63 )                    (74 )                      (86 )                (98 )
     Pro forma stock option adjustment (4)                           (101 )                   (118 )                     (136 )               (157 )
           Pro forma net income                           $           463         $            463           $            459     $            457

Per share net income
     Historical                                           $           0.42        $            0.36          $           0.31     $           0.27
     Pro forma income on net proceeds                                 0.14                     0.14                      0.14                 0.15
     Pro forma ESOP adjustment (2)                                   (0.03 )                  (0.03 )                   (0.03 )              (0.03 )
     Pro forma stock award adjustment (3)                            (0.05 )                  (0.05 )                   (0.05 )              (0.05 )
     Pro forma stock option adjustment (4)                           (0.09 )                  (0.09 )                   (0.09 )              (0.09 )
           Pro forma net income per share (5)             $           0.39        $            0.33          $           0.28     $           0.25

Offering price as a multiple of pro forma net earnings
  per share                                                         25.64                    30.30                      35.71                40.00
Number of shares outstanding for pro forma net Income
  per share calculations (5)                                   1,178,100                1,386,000                 1,593,900            1,832,985
At December 31, 2009
Stockholders’ equity:
     Historical                                           $        17,262         $         17,262           $        17,262      $        17,262
     Estimated net proceeds                                        11,489                   13,708                    15,927               18,479
     Less: Common stock acquired by ESOP (2)                       (1,020 )                 (1,200 )                  (1,380 )             (1,587 )
     Less: Common stock awarded under stock-based
       benefit plans (3) (4)                                         (510 )                   (600 )                     (690 )               (794 )
           Pro forma stockholders’ equity                 $        27,221         $         29,170           $        31,119      $        33,360

Stockholders’ equity per share:
    Historical                                            $         13.54         $          11.51           $          10.01     $           8.70
    Estimated net proceeds                                           9.01                     9.14                       9.23                 9.32
    Less: Common stock acquired by ESOP (2)                         (0.80 )                  (0.80 )                    (0.80 )              (0.80 )
    Less: Common stock awarded under stock-based
      benefit plans (3) (4)                                          (0.40 )                  (0.40 )                   (0.40 )              (0.40 )
           Pro forma stockholders’ equity per share (6)   $         21.35         $          19.45           $          18.04     $          16.82

Offering price as percentage of pro forma stockholders’
  equity per share                                                  46.84 %                  51.41 %                    55.43 %              59.45 %
Number of shares outstanding for pro forma book value
  per share calculations                                       1,275,000                1,500,000                 1,725,000            1,983,750
     (footnotes begin on following page)

40
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(Footnotes from previous page)

(1)   As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect
      demand for the shares or changes in market conditions following the commencement of the offering.
(2)   Assumes that 8% of shares of common stock sold in the offering will be purchased by the employee stock ownership plan. For purposes
      of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from SP
      Bancorp, Inc. SharePlus Federal Bank intends to make annual contributions to the employee stock ownership plan in an amount at least
      equal to the required principal and interest payments on the debt. SharePlus Federal Bank’s total annual payments on the employee stock
      ownership plan debt are based upon 20 equal annual installments of principal and interest. Financial Accounting Standards Board
      Accounting Standards Codification 718-40, ―Employers’ Accounting for Employer Stock Ownership Plans‖ (―ASC 718-40‖) requires
      that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees.
      The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the
      number of loan repayment installments assumed to be paid by SharePlus Federal Bank, the fair value of the common stock remains equal
      to the subscription price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of
      38.0%. The unallocated employee stock ownership plan shares are reflected as a reduction of stockholders’ equity. No reinvestment is
      assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 5,100,
      6,000, 6,900 and 7,935 shares were committed to be released during the year ended December 31, 2009 at the minimum, midpoint,
      maximum, and adjusted maximum of the offering range, respectively, and in accordance with ASC 718-40, only the employee stock
      ownership plan shares committed to be released during the period were considered outstanding for purposes of income per share
      calculations.
(3)   If approved by SP Bancorp, Inc.’s stockholders, one or more stock-based benefit plans may purchase an aggregate number of shares of
      common stock equal to 4% of the shares to be sold in the offering (or possibly a greater number of shares if the plan is implemented
      more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans, and purchases by the plan
      may not occur earlier than six months after the completion of the conversion. The shares may be acquired directly from SP Bancorp, Inc.
      or through open market purchases. The funds to be used by the stock-based benefit plans to purchase the shares will be provided by SP
      Bancorp, Inc. The table assumes that (i) the stock-based benefit plans acquire the shares through open market purchases at $10.00 per
      share, (ii) 20% of the amount contributed to the stock-based benefit plans is amortized as an expense during the fiscal year, and (iii) the
      stock-based benefit plans expense reflects an effective combined federal and state tax rate of 38.0%. Assuming stockholder approval of
      the stock-based benefit plans and that shares of common stock equal to 4% of the shares sold in the offering are awarded through the use
      of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by
      approximately 3.8%.
(4)   If approved by SP Bancorp, Inc.’s stockholders, one or more stock-based benefit plans may grant options to acquire an aggregate number
      of shares of common stock equal to 10% of the shares to be sold in the offering (or possibly a greater number of shares if the plan is
      implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans may not
      occur earlier than six months after the completion of the conversion. In calculating the pro forma effect of the stock options to be granted
      under stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the
      date of grant were $10.00 per share, the estimated grant-date fair value determined using the Black-Scholes option pricing model was
      $4.36 for each option, the aggregate grant-date fair value of the stock options was amortized to expense on a straight-line basis over a
      five-year vesting period of the options. The actual expense of the stock options to be granted under the stock-based benefit plans will be
      determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions
      used in the option pricing model ultimately adopted. Under the above assumptions, the adoption of the stock-based benefit plans will
      result in no additional shares under the treasury stock method for purposes of calculating earnings per share. There can be no assurance
      that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares to satisfy the
      exercise of options under the stock-based benefit plans is obtained from the issuance of authorized but unissued shares, our net income
      per share and stockholders’ equity per share would decrease. Assuming stockholder approval of the stock-based benefit plans and that
      shares of common stock used to fund stock options (equal to 10% of the shares sold in the offering) are awarded through the use of
      authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately
      9.1%.
(5)   Income (loss) per share computations are determined by taking the number of shares assumed to be sold in the offering and, in
      accordance with ASC 718-40, subtracting the employee stock ownership plan shares that have not been committed for release during the
      period. Income (loss) per share computations assume that 8% of the shares of common stock sold in the offering will be purchased by the
      employee stock ownership plan, equal to 102,000, 120,000, 138,000 and 158,700 shares at the minimum, midpoint, maximum and
      adjusted maximum of the offering range, respectively, and an equal number of shares (1/20th of the total per year based on a 20-year
      loan) will be released each year over the term of the loan. Income (loss) per share computations assume that 5,100, 6,000, 6,900 and
      7,935 shares were committed to be released during the year ended December 31, 2009 at the minimum, midpoint, maximum and adjusted
      maximum of the offering range, respectively, resulting in employee stock ownership plan shares that have not been committed to be
      released during the year of 96,900, 114,000, 131,100 and 150,765 at the minimum, midpoint, maximum and adjusted maximum of the
      offering range, respectively.
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(6)   The retained earnings of SharePlus Federal Bank will be substantially restricted after the conversion. See ―Our Policy Regarding
      Dividends,‖ ―The Conversion; Plan of Distribution—Liquidation Rights‖ and ―Supervision and Regulation.‖ The number of shares used
      to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the
      offering.

                                                                     42
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                           MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                                           AND RESULTS OF OPERATIONS

      This section is intended to help potential investors understand our financial performance through a discussion of the factors affecting our
financial condition at March 31, 2010, December 31, 2009 and 2008, and our results of operations for the three months ended March 31, 2010
and 2009 and the years ended December 31, 2009 and 2008. This section should be read in conjunction with the financial statements and notes
to the financial statements that appear elsewhere in this prospectus. SP Bancorp, Inc. did not exist at March 31, 2010 and, therefore, the
information reflected in this section reflects the financial performance of SharePlus Federal Bank.

Overview
      At March 31, 2010, we had total assets of $227.2 million, compared to total assets of $208.1 million at December 31, 2009. During the
quarter ended March 31, 2010, we had a net loss of $323,000 resulting primarily from a $1.1 million provision for loan losses taken during the
quarter. For the year ended December 31, 2009, we had net income of $493,000.

      Our results of operations depend mainly on our net interest income, which is the difference between the interest income we earn on our
loan and investment portfolios and the interest expense we incur on our deposits and, to a lesser extent, our borrowings. Results of operations
are also affected by service charges and other fees, provision for loan losses, commissions, gains (losses) on sales of securities and loans and
other income. Our noninterest expense consists primarily of compensation and benefits, occupancy costs, data processing, ATM expense,
professional and outside services fees, FDIC deposit insurance, marketing and income tax expense.

     Our results of operations are also significantly affected by general economic and competitive conditions (such as changes in energy prices
which have an impact on our Texas market area), as well as changes in interest rates, government policies and actions of regulatory authorities.
Future changes in applicable laws, regulations or government policies may materially affect our financial condition and results of operations.

      Prior to our conversion to a federal savings bank in October 2004, we operated as a federally chartered credit union, concentrating our
lending efforts on originating consumer loans, including automobile loans, which totaled $35.9 million, or 26.4% of our total loan portfolio, at
December 31, 2005. Since our conversion to a federal savings bank, we have changed the relative composition of our loan portfolio by
de-emphasizing the origination of automobile loans, which totaled $8.9 million, or 5.3% of total loans, at March 31, 2010, and by emphasizing
the origination of one- to four-family residential loans and commercial real estate loans. Commercial real estate loans totaled $23.4 million, or
13.9% of total loans at March 31, 2010. We had no commercial real estate loans at December 31, 2006. Additionally, at March 31, 2010, one-to
four- family residential loans were $123.1 million, or 73.0% of our total loan portfolio compared to $85.1 million, or 62.7% of our total loan
portfolio, at December 31, 2005. Over the past several years, we have significantly increased our personnel, systems and administration to
support the growth of our residential mortgage and commercial real estate lending activities.

Business Strategy
      Our primary objective is to remain an independent, community-oriented financial institution dedicated to providing a full range of
financial services to customers in our primary market areas. Due to our credit union history, SharePlus Federal Bank has the benefit of a
customer base that has historically

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been largely drawn from the employees of our former sponsor companies. Additionally, since our conversion to a federal savings bank in 2004,
we have increased our deposits and loan portfolio in and around our Texas branch office network through a more traditional community bank
growth pattern. Our intention is to continue to provide the highest quality service and financial products to our customers and to continue to
increase our commercial and residential real estate lending around our Texas branch network. Our strategy for accomplishing these goals and
improving our profitability is as follows:

      Continuing to diversify our loan portfolio by emphasizing the origination of one- to four-family residential loans and commercial real
estate and commercial loans. Our strategy for increasing net income includes increasing our loan originations and diversifying our loan
portfolio. We intend to continue to emphasize the origination of one- to four-family residential mortgage loans and commercial real estate
loans, which increased to 73.0% and 13.9%, respectively, of our total loans at March 31, 2010, from 68.2% and 0%, respectively, of our total
loans at December 31, 2006.

      In addition, we intend to increase our commercial loan portfolio. By contrast, consumer loans decreased to 7.3% of our total loans at
March 31, 2010, compared to 25.7% of our total loans at December 31, 2006. While the total dollar amount of our consumer loans is expected
to remain stable in the near term, it is expected that consumer loans will continue to decline as a percentage of our total loan portfolio. We
anticipate that our commercial real estate loan portfolio will continue to increase both in absolute value as well as a percentage of our total loan
portfolio. Commercial real estate loans generally are originated with higher interest rates compared to one- to four-family residential mortgage
loans and, therefore, have a positive effect on our interest rate spread and net interest income. In addition, the majority of these loans are
originated with adjustable interest rates, which assist us in managing interest rate risk.

      Continuing conservative underwriting guidelines and aggressively monitoring our loan portfolio to maintain asset quality . We
introduce loan products only when we are confident that our staff has the necessary expertise to originate and administer such loans, and that
sound underwriting and collection procedures are in place. Our goal is to continue to improve our asset quality through conservative
underwriting standards and the diligence of our loan collection personnel. In addition, a significant percentage of our one- to four-family
residential mortgage loans and consumer loans historically have been made to employees of our former sponsor companies who, we believe,
generally are good credit risks because of their employment status. At March 31, 2010, our ratio of non-performing loans to total loans was
3.71%. At March 31, 2010, our ratio of allowance for loan losses to non-performing loans was 31.9% and our ratio of allowance for loan losses
to total loans was 1.18%.

      Emphasizing lower cost core deposits to reduce the funding costs of our loan originations. We offer interest-bearing and
noninterest-bearing demand accounts, money market accounts and savings accounts (collectively referred to as core deposits), which generally
are lower-cost sources of funds than certificates of deposit, and are less sensitive to withdrawal when interest rates fluctuate. At March 31,
2010, 68.7% of our total deposits consisted of these lower cost core deposits. We believe the convenient locations of our branch network, and
especially our branches located within the facilities of our former sponsor companies, provides us with a competitive advantage in accessing
low-cost core deposits from our existing customers that use these branches. We intend to continue emphasizing our core deposits as a source of
funds. With respect to our commercial real estate customers, we generally require that commercial banking borrowers open checking accounts
with us at the time they establish a borrowing relationship with us.

      Managing interest rate risk. Successfully managing interest rate risk is an integral part of our business strategy. Management and the
board of directors evaluate the interest rate risk inherent in our assets and liabilities, and determine the level of risk that is appropriate and
consistent with our capital

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levels, liquidity and performance objectives. In particular, during the current low interest rate environment, we have sought to minimize the risk
of originating long-term, fixed rate loans by selling such loans in the secondary market, and in particular selling substantially all of our
qualifying one- to four- family fixed-rate residential mortgage loans with terms of 15 years or greater. In addition, a portion of our loan
portfolio consists of commercial real estate loans and consumer loans which generally have shorter terms and provide higher yields than one- to
four- family residential mortgage loans. We also monitor the mix of our deposits, a majority of which have been lower cost core deposits. Our
strategy is to continue managing interest rate risk in response to changes in the local and national economy and to increase our assets as we
deploy the proceeds from the offering.

      Increasing our sources of noninterest income. We have sought to increase our fee income by offering our customers incentives for debit
card usage and by increasing the number of our business deposit accounts as we grow our commercial loan portfolio. We also receive fees from
the sale of fixed-rate mortgage loans. We offer brokerage services for the purchase and sale of non-deposit investment and insurance products
through a third-party brokerage arrangement.

      Implementing a controlled growth strategy and reducing our non-interest expense. We believe our infrastructure, personnel and fixed
operating base can support a substantially larger institution, and we intend to implement such growth without significant increases in our
non-interest expense. Management’s current strategies to reduce non-interest expense include using technology to limit facility and personnel
costs, including enhanced ATM and website functionality, and implementing remote deposit capture at our commercial customers’ locations. In
addition, we have incurred significant compliance expenses since our 2004 charter conversion, which we expect will decrease significantly as
we manage more of these programs internally. Following the completion of the offering, we intend to use our capital to grow organically and to
pursue future acquisitions of commercial banks, savings institutions, and other financial services companies, including branch offices of such
companies, although we have no current arrangements or agreements with respect to any such acquisitions.

      The successful implementation of these strategies will allow us to offer our clients a broad range of financial products and services. Our
goal is to have full relationship banking with our clients.

      These strategies are intended to guide our investment of the net proceeds of the offering. We intend to continue to pursue our business
strategy after the conversion and the offering, subject to changes necessitated by future market conditions and other factors.

Anticipated Increase in Noninterest Expense
      Following the completion of the conversion and offering, we anticipate that our noninterest expense will increase as a result of the
increased costs associated with managing a public company, purchasing shares of common stock by our employee stock ownership plan, and
adopting one or more stock-based benefit plans, if approved by SP Bancorp, Inc.’s stockholders.

      Assuming that the adjusted maximum number of shares are sold in the offering:
        •    our employee stock ownership plan would acquire 158,700 shares of common stock with a $1.6 million loan that is expected to be
             repaid over 20 years, resulting in an annual pre-tax expense of approximately $79,000 (assuming that the common stock maintains
             a value of $10.00 per share);

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        •    our stock-based benefit plan would reserve a number of shares equal to 10% of the total shares issued in the offering, or 198,375
             shares, for the grant of options to eligible participants, which would result in compensation expense over the vesting period of the
             options. Assuming the market price of the common stock is $10.00 per share; all options are granted with an exercise price of
             $10.00 per share and have a term of 10 years; the dividend yield on the stock is zero; the risk free interest rate is 3.84%; and the
             volatility rate on the common stock is 23.90%, the estimated grant-date fair value of the stock options utilizing a Black-Scholes
             option pricing model is $4.36 per option granted. Assuming this value is amortized over a five-year vesting period, the
             corresponding annual pre-tax expense associated with the stock options would be approximately $173,000; and
        •    our stock-based benefit plan would reserve a number of shares equal to 4% of the shares issued in the offering, or 79,350 shares,
             for awards to eligible participants, which would be expensed as the awards vest. Assuming that all shares are awarded under the
             stock-based benefit plan at a price of $10.00 per share, and that the awards vest over a five-year period, the corresponding annual
             pre-tax expense associated with shares awarded under the stock-based benefit plan would be approximately $159,000.

      The actual expense that will be recorded for the employee stock ownership plan will be determined by the market value of the shares of
common stock as they are released to employees over the term of the loan, and whether the loan is repaid faster than its contractual term.
Accordingly, increases in the stock price above $10.00 per share will increase the total employee stock ownership plan expense, and any
accelerated repayment of the loan would increase the annual employee stock ownership plan expense. Additionally, the actual expense of the
stock-based benefit plan will be determined by the fair market value of the stock on the grant date, which might be greater than $10.00 per
share. Further, the actual expense of the stock options would be determined by the grant-date fair value of the options, which would depend on
a number of factors, including the valuation assumptions used in the Black-Scholes option pricing model.

Critical Accounting Policies
      We consider accounting policies that require management to exercise significant judgment or discretion or make significant assumptions
that have, or could have, a material impact on the carrying value of certain assets or on income, to be critical accounting policies. We consider
the following to be our critical accounting policies.

      Allowance for Loan Losses. We believe that the allowance for loan losses and related provision for loan losses are particularly
susceptible to change in the near term, due to changes in credit quality which are evidenced by trends in charge-offs and in the volume and
severity of past due loans. In addition, our loan mix is changing as we continue to increase our commercial real estate lending. Commercial real
estate loans generally have greater credit risk than one- to four-family residential mortgage and consumer loans due to these loans being larger
in amount and non-homogenous.

      The allowance for loan losses is maintained at a level to cover probable credit losses inherent in the loan portfolio at the balance sheet
date. Based on our estimate of the level of allowance for loan losses required, we record a provision for loan losses as a charge to earnings to
maintain the allowance for loan losses at an appropriate level. The estimate of our credit losses is applied to two general categories of loans:
        •    loans that we evaluate individually for impairment under ASC 310-10, ―Receivables;‖ and

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        •    groups of loans with similar risk characteristics that we evaluate collectively for impairment under ASC 450-20, ―Loss
             Contingencies.‖

      The allowance for loan losses is evaluated on a regular basis by management and reflects consideration of all significant factors that
affect the collectability of the loan portfolio. The factors used to evaluate the collectability of the loan portfolio include, but are not limited to,
current economic conditions, our historical loss experience, the nature and volume of the loan portfolio, the financial strength of the borrower,
and estimated value of any underlying collateral. This evaluation is inherently subjective as it requires estimates that are subject to significant
revision as more information becomes available. Actual loan losses may be significantly more than the allowance for loan losses we have
established which could have a material negative effect on our financial results. See also ―Business of SharePlus Federal Bank—Allowance for
Loan Losses.‖

Comparison of Financial Condition at March 31, 2010 and December 31, 2009
      Total assets increased $19.1 million, or 9.2%, to $227.2 million at March 31, 2010 from $208.1 million at December 31, 2009. The
increase was primarily the result of an increase in total cash and cash equivalents, which was partially offset by a decrease in loans, net.

      Total cash and cash equivalents increased $23.8 million to $35.5 million at March 31, 2010 from $11.7 million at December 31, 2009.
The increase in total cash and cash equivalents was primarily the result of seasonal deposit inflows from existing customers, and management’s
decision to increase our liquidity during the low interest rate environment during the first quarter of 2010 to fund future loan growth.

     Net loans and loans held for sale decreased $4.3 million, or 2.5%, to $167.2 million at March 31, 2010 from $171.5 million at
December 31, 2009 as our one-to four-family residential mortgage loans decreased $2.3 million to $123.1 million at March 31, 2010 from
$125.4 million at December 31, 2009, primarily due to repayments, refinances and sales. Additionally consumer loans and commercial loans
decreased slightly during the quarter while all other loan categories remained relatively unchanged. Loans held for sale increased $525,000, or
56.3%, to $1.5 million at March 31, 2010 from $932,000 at December 31, 2009.

     Securities classified as available for sale decreased slightly to $13.3 million at March 31, 2010 from $13.5 million at December 31, 2009.
At March 31, 2010, securities classified as available for sale consisted of government-sponsored mortgage-backed securities,
government-sponsored collateralized mortgage obligations, municipal obligations and agency securities.

      Deposits increased $19.6 million, or 11.4%, to $192.2 million at March 31, 2010 from $172.6 million at December 31, 2009. Certificates
of deposit increased $1.8 million, or 3.1%, to $60.1 million at March 31, 2010 from $58.3 million at December 31, 2009. Our core deposits
(consisting of interest-bearing and noninterest-bearing demand deposits, money market accounts and savings accounts) increased $17.8 million,
or 15.6%, to $132.1 million at March 31, 2010 from $114.3 million at December 31, 2009. The increase in our deposits resulted primarily from
seasonal inflows of deposits from employees of former sponsor companies that traditionally have occurred during the first calendar quarter.

     Federal Home Loan Bank advances remained unchanged at $16.0 million at March 31, 2010. We have used a portion of such advances to
―match fund‖ certain fixed-rate residential and commercial real estate loans in order to reduce our interest rate risk.

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      Total equity decreased $255,000, or 1.5%, to $17.0 million at March 31, 2010 from $17.3 million at December 31, 2009. The decrease
resulted primarily from a net loss of $(323,000) during the quarter ended March 31, 2010.

Comparison of Financial Condition at December 31, 2009 and 2008
      Total assets increased $17.1 million, or 9.0%, to $208.1 million at December 31, 2009 from $191.0 million at December 31, 2008. The
increase was primarily the result of an increase in total cash and cash equivalents, securities available for sale and loans, net, partially offset by
slight decreases in premises and equipment, deferred tax assets and other assets.

      Total cash and cash equivalents increased $6.0 million, or 105.3%, to $11.7 million at December 31, 2009 from $5.7 million at
December 31, 2008. The increase in total cash and cash equivalents reflected normal year-end cash management, as well as management’s
decision to increase our liquidity during the low interest rate environment in 2009.

      Net loans including loans held for sale increased $6.6 million, or 4.0%, to $171.5 million at December 31, 2009 from $164.9 million at
December 31, 2008, reflecting continued strong demand in our primary market area in the relatively low interest rate environment. During the
year ended December 31, 2009, we focused our loan growth on residential and commercial real estate loans while continuing to reduce our
consumer loan portfolio, which consisted primarily of automobile loans. One- to four-family residential mortgage loans increased $8.6 million,
or 7.4%, to $125.4 million at December 31, 2009. Commercial real estate loans increased $5.1 million, or 29.2%, to $22.6 million at
December 31, 2009. The increases in residential and commercial real estate loans reflected stable demand for these products due, in part, to
reduced competition from some of our competitors who exited these markets during the year, as well as relatively stable economic conditions
in our primary market area, competitive pricing, attractive products and services, established relationships, and successful business
development efforts, including the hiring of an experienced commercial real estate lending officer in August 2009. Home equity loans
remained relatively unchanged at $9.0 million at December 31, 2009 from $9.1 million at December 31, 2008. Consumer loans decreased $6.7
million, or 33.2%, to $13.5 million at December 31, 2009 from $20.2 million at December 31, 2008.

      Securities classified as available for sale increased $5.5 million, or 68.8%, to $13.5 million at December 31, 2009 from $8.0 million at
December 31, 2008, as management deployed funds from increased deposits to purchase these securities. At December 31, 2009, securities
classified as available for sale consisted of government-sponsored mortgage-backed securities, government-sponsored collateralized mortgage
obligations, municipal obligations and agency securities.

      Deposits increased $31.1 million, or 22.0%, to $172.6 million at December 31, 2009 from $141.5 million at December 31, 2008.
Certificates of deposit increased $16.0 million, or 37.8%, to $58.3 million at December 31, 2009 from $42.3 million at December 31, 2008, as
customers moved their funds to insured bank products from other investment options, such as the stock market, during a turbulent investment
environment. Our core deposits increased $15.1 million, or 15.2%, to $114.3 million at December 31, 2009 from $99.2 million at December 31,
2008. The increases resulted primarily from increased marketing and promotional activity in an effort to attract new customers and retain
existing funds, and from increased deposits from commercial borrowers who opened deposit accounts with us in connection with new loan
originations.

      FHLB advances decreased $14.5 million, or 47.5%, to $16.0 million at December 31, 2009 from $30.5 million at December 31, 2008.
The decrease reflected the pricing advantage of utilizing deposits to fund our loan growth in the continued low market interest rate
environment. We use a portion of such

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advances to ―match fund‖ certain fixed-rate residential and commercial real estate loans in order to reduce our interest rate risk. Other liabilities
increased $143,000, or 6.8%, to $2.2 million at December 31, 2009 from $2.1 million at December 31, 2008, reflecting routine fluctuations.

      Total equity increased $488,000, or 2.9%, to $17.3 million at December 31, 2009 from $16.8 million at December 31, 2008. The increase
resulted primarily from net income of $493,000 during the year ended December 31, 2009, offset in part by a slight decrease in accumulated
other comprehensive income of $5,000 to $85,000 at December 31, 2009 from $90,000 at December 31, 2008.

Comparison of Operating Results for the Three Months Ended March 31, 2010 and 2009
      General. We recorded a net loss of $(323,000) for the quarter ended March 31, 2010 compared to net income of $134,000 for the quarter
ended March 31, 2009. Although net interest income increased $164,000 to $2.0 million for the quarter ended March 31, 2010 from $1.9
million for the quarter ended March 31, 2009, our provision for loan losses increased $944,000 during the 2010 quarter, which resulted in the
net loss for the quarter.

      Interest Income. Interest income decreased $37,000, or 1.4%, to $2.6 million for the quarter ended March 31, 2010 from $2.6 million for
the quarter ended March 31, 2009, as the increase in the average balance of interest-earning assets was more than offset by a decrease in the
average yield on such assets. The average balance of total interest-earning assets increased $33.1 million, or 17.7%, to $220.5 million for the
quarter ended March 31, 2010 from $187.4 million for the quarter ended March 31, 2009. The biggest component increase was in total other
interest-earning assets, comprised primarily of cash and cash equivalents, which increased $25.0 million, or 233.6%, to $35.7 million for the
2010 quarter from $10.7 million for the 2009 quarter. The increase in total interest-earning assets was offset by a 91 basis points decrease in the
average yield on interest-earning assets to 4.68% for the 2010 quarter from 5.59% for the 2009 quarter. The decrease in our average yield on
interest-earning assets was due primarily to the general decline in short-term market interest rates as well as the higher balances of low-yielding
cash and cash equivalents.

      Interest income and fees on loans decreased $75,000, or 3.0%, to $2.4 million for the quarter ended March 31, 2010 from $2.5 million for
the quarter ended March 31, 2009, as the increase in the average balance of loans was more than offset by a decrease in the average yield on
our loans. The average balance of loans increased $2.6 million, or 1.6%, to $170.0 million for the quarter ended March 31, 2010 from $167.4
million for the quarter ended March 31, 2009. However, the average yield on our loan portfolio decreased 27 basis points to 5.69% for the
quarter ended March 31, 2010 from 5.96% for the quarter ended March 31, 2009, reflecting the lower market interest rate environment.

      Interest income on investment securities, other interest earning assets and FHLB of Dallas stock increased $38,000, or 30.6%, to
$162,000 for the quarter ended March 31, 2010 from $124,000 for the quarter ended March 31, 2009. The increase resulted primarily from an
increase in the average balance of our taxable and non-taxable investment securities, which increased $5.6 million, or 72.7%, to $13.3 million
for the quarter ended March 31, 2010 from $7.7 million for the 2009 quarter, as management increased these liquid investments during the low
interest rate environment to fund future loan growth, and implemented a leveraging strategy during the 2010 quarter of placing FHLB advances
into low-yielding overnight funds, resulting in lower average yields but increased net interest income during the quarter. The average yield on
our securities portfolio (excluding nontaxable investment securities) decreased by 171 basis points, to 3.43% for the quarter ended March 31,
2010 from 5.14% for the quarter ended March 31, 2009 resulting from lower market rates. Additionally, interest income on total other interest
earning assets increased $19,000, or 76.0%, to $44,000 for the quarter ended March 31, 2010 from $25,000 for the quarter ended March 31,
2009 as the average balance of these assets increased $25.0 million, or 233.6% to $35.7 million for the 2010 quarter from $10.7 million for the
2009 quarter.

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      Interest Expense. Interest expense decreased $201,000, or 26.2%, to $567,000 for the quarter ended March 31, 2010 from $768,000 for
the quarter ended March 31, 2009, as the decrease in the average cost of deposits more than offset the increase in the average balance of
deposits. The decrease resulted primarily from a decrease in interest expense on deposits of $127,000 and a decrease in interest expense on
Federal Home Loan Bank advances of $74,000. The average rate we paid on deposits decreased 52 basis points to 1.04% for the quarter ended
March 31, 2010 from 1.56% for the quarter ended March 31, 2009, as we were able to reprice our deposits downward in the declining market
interest rate environment. The average balance of interest-bearing deposits increased $26.2 million, or 17.8%, to $173.5 million for the quarter
ended March 31, 2010 from $147.3 million for the quarter ended March 31, 2009. The increase in the average balance of our deposits resulted
from increases in the average balance of our certificates of deposit, as well as in our core deposits, consisting of demand deposit accounts,
money market accounts and savings accounts, reflecting our successful marketing efforts and increased core deposit balances from commercial
loan customers.

      The average balance of our certificates of deposit increased by $8.5 million, or 17.2%, to $58.0 million for the quarter ended March 31,
2010 from $49.5 million for the quarter ended March 31, 2009 due to our marketing efforts as well as seasonal deposit inflows. However, the
interest expense on our certificates of deposit declined from $395,000 to $318,000, due to the significant decrease of 100 basis points in the
cost of these deposits to 2.19% for the March 2010 quarter from 3.19% for the March 2009 quarter, reflecting lower market interest rates.
Interest-bearing demand deposit accounts increased $6.9 million, or 13.6%, to $50.7 million for the quarter ended March 31, 2010 from $43.8
million for the quarter ended March 31, 2009, as our customers increased their liquidity and we increased our cross-marketing efforts with our
commercial customers.

      Interest expense on our core deposits decreased $50,000 to $131,000 for the quarter ended March 31, 2010 from $181,000 for the 2009,
quarter reflecting lower market interest rates. Additionally, more customers moved funds into higher-yielding certificates of deposit.

     Interest expense on borrowed funds, consisting entirely of Federal Home Loan Bank advances, decreased by $74,000, or 38.5%, to
$118,000 for the quarter ended March 31, 2010 from $192,000 for the quarter ended March 31, 2009, reflecting the lower rate environment.

      Net Interest Income. Net interest income increased by $164,000, or 8.9%, to $2.0 million for the quarter ended March 31, 2010 from
$1.9 million for the quarter ended March 31, 2009, as our net interest-earning assets increased to $15.3 million from $12.3 million. Partially
offsetting the increase in net interest-earning assets was a 26 basis point decrease in our net interest rate spread to 3.58% from 3.84%, and a 30
basis point decrease in our net interest margin to 3.65% from 3.95%. The decreases in our net interest rate spread and net interest margin
reflected our decision to reduce our exposure to fixed-rate loans during the low-interest rate environment and to increase our liquidity through
increased cash and cash equivalents, as well as higher non-performing loans for which we accrue no interest, which increased to $4.6 million at
March 31, 2010 from $423,000 at March 31, 2009.

      Provision for Loan Losses. Based on our analysis of the factors described in ―Critical Accounting Policies — Allowance for Loan
Losses,‖ we recorded a provision for loan losses of $1.1 million for the quarter ended March 31, 2010 and a provision for loan losses of
$136,000 for the quarter ended March 31, 2009. The primary reason for the increase in the provision for loan losses was an increase in our
non-performing loans. At March 31, 2010, non-performing loans including troubled debt restructurings not included in non-accrual loans,
totaled $6.3 million, or 3.7% of total loans, as compared

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to $1.3 million, or 0.77% of total loans, at March 31, 2009. The increase in non-performing loans including troubled debt restructurings not
included in non-accrual loans was primarily in the commercial real estate loan portfolio, a higher risk portfolio as compared to one- to
four-family residential mortgage loans. The allowance for loan losses to total loans receivable increased to 1.18% at March 31, 2010 as
compared to 0.32% at March 31, 2009.

      The allowance for loan losses as a percentage of non-performing loans decreased to 31.9% at March 31, 2010 from 41.3% at March 31,
2009. To the best of our knowledge, we have provided for all losses that are both probable and reasonable to estimate at March 31, 2010 and
2009.

     Noninterest Income. Noninterest income decreased by $16,000, or 3.0%, to $525,000 for the quarter ended March 31, 2010 from
$541,000 for the quarter ended March 31, 2009. The decrease was due to lower service charges and gains on sales of mortgage loans, offset by
a $16,000 increase in other income.

      Noninterest Expense. Noninterest expense decreased $45,000, or 2.2%, to $2.0 million for the quarter ended March 31, 2010 from $2.0
million for the quarter ended March 31, 2009. This decrease was primarily attributable to a $184,000 decrease in compensation and benefits
expense as we reversed a bonus accrual during the 2010 quarter, and a $23,000 decrease in occupancy costs, partially offset by a $31,000
increase in FDIC insurance assessments.

     Income Tax Expense (Benefit). We recorded a $(212,000) income tax benefit for the quarter ended March 31, 2010 compared to an
$82,000 income tax expense for the 2009 quarter, reflecting the loss of $(535,000) before income tax expense during the 2010 quarter versus
income before income tax of $216,000 for the quarter ended March 31, 2009. Our effective tax rate was (39.6)% for the quarter ended
March 31, 2010 compared to 38.0% for the quarter ended March 31, 2009.

Comparison of Operating Results for the Years Ended December 31, 2009 and 2008
     General. Net income increased to $493,000 for the year ended December 31, 2009 from $28,000 for the year ended December 31, 2008.
The increase in net income reflected a $1.3 million increase in net interest income, partially offset by a $300,000 increase in total non-interest
expense, an increase in provision for loan losses of $296,000 and an increase of $251,000 of income tax expense.

      Interest Income. Interest income increased $1.0 million, or 10.4%, to $10.6 million for the year ended December 31, 2009 from $9.6
million for the year ended December 31, 2008. The increase resulted from a $33.7 million, or 20.1%, increase in the average balance of
interest-earning assets, to $201.2 million for the year ended December 31, 2009 from $167.5 million for the year ended December 31, 2008.
During the year ended December 31, 2009, we increased the average balance of our loans and other interest-earning assets and municipal
investment securities. These increases were offset in part by a 44 basis points decrease in the average yield on interest-earning assets to 5.27%
for the year ended December 31, 2009 from 5.71% for the year ended December 31, 2008, due primarily to the decline in short-term market
interest rates, including the re-pricing of adjustable-rate mortgage loans.

      Interest income on loans increased $1.3 million, or 14.9%, to $10.0 million for the year ended December 31, 2009 from $8.7 million for
the year ended December 31, 2008. The average balance of loans increased $22.1 million, or 15.1%, to $168.0 million for the year ended
December 31, 2009 from $145.9 million for the year ended December 31, 2008, reflecting stable demand in our primary market area,
competitive pricing, attractive products and services, established relationships and successful business development efforts, including the hiring
in August 2009 of an experienced commercial real estate lending officer. During this period, we continued to change the composition of our
loan portfolio to

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include a higher percentage of loans secured by real estate and a lower percentage of consumer loans. The average yield on our loan portfolio
remained relatively unchanged at 5.95% for the year ended December 31, 2009 from 5.97% for the year ended December 31, 2008.

      Interest income on investment securities, other interest-earning assets and FHLB of Dallas stock decreased $256,000, or 30.0%, to
$596,000 for the year ended December 31, 2009 from $852,000 for the year ended December 31, 2008. The decrease resulted primarily from a
decrease in the average balance of our taxable investment securities, which decreased $1.9 million, or 14.6%, to $11.1 million for the year
ended December 31, 2009 from $13.0 million for the year ended December 31, 2008, and a decrease in the average yield on our securities
portfolio (excluding nontaxable investment securities) of 105 basis points to 3.85% for the year ended December 31, 2009 from 4.90% for the
year ended December 31, 2008, reflecting lower market interest rates. Additionally, the average balance of our total other interest-earning
assets increased $12.4 million, or 169.9%, to $19.7 million for 2009 from $7.3 million for 2008, although these assets were primarily invested
in overnight funds with low rates of interest.

      Interest Expense. Interest expense decreased $313,000, or 10.2%, to $2.8 million for the year ended December 31, 2009 from $3.1
million for the year ended December 31, 2008. The decrease resulted primarily from a $393,000 decrease in interest expense on deposits. The
average balance of interest-bearing deposits increased $20.6 million, or 14.5%, to $162.8 million for the year ended December 31, 2009 from
$142.2 million for the year ended December 31, 2008. This increase was more than offset by the 47 basis points decrease on the average rate
we paid on deposits to 1.34% for the year ended December 31, 2009 from 1.81% for the year ended December 31, 2008, as we were able to
reprice our deposits in the declining market interest rate environment and increase low-cost core deposits from commercial customers through
our marketing efforts. Partially offsetting the decrease in interest expense was an increase in interest expense on borrowed funds of $80,000.

      The average balance of our certificates of deposit increased significantly by $16.0 million, or 39.1%, to $56.9 million for the year ended
December 31, 2009 from $40.9 million for the year ended December 31, 2008. However, the interest expense on our certificates of deposit
remained constant at $1.6 million for the years ended December 31, 2009 and 2008, due to the 106 basis points decrease in the cost of these
deposits to 2.78% for 2009 from 3.84% for 2008, reflecting lower market interest rates. Additionally, interest-bearing demand deposits
increased $3.6 million, or 8.5%, to $45.9 million for the year ended December 31, 2009 from $42.3 million for the prior year.

     Interest expense on our core deposits (consisting of savings deposit accounts, money market accounts and demand deposit accounts)
decreased $404,000 to $602,000 for the year ended December 31, 2009 from $1.0 million for the prior year as we were able to reduce the rates
we paid on these accounts in response to interest rate cuts by the Federal Reserve Board.

      Interest expense on borrowed funds, consisting entirely of Federal Home Loan Bank advances, increased by $80,000, or 16.4%, to
$567,000 for the year ended December 31, 2009 from $487,000 for the prior year, as we increased our borrowings reflecting management’s
leveraging strategy to increase borrowings and invest these funds in overnight funds to generate additional net interest income.

      Net Interest Income. Net interest income increased by $1.3 million, or 20.0%, to $7.8 million for the year ended December 31, 2009
from $6.5 million for the prior year, as our net interest-earning assets increased to $14.1 million from $11.5 million. In addition, our net interest
rate spread increased 5 basis points to 3.80% for the year ended December 31, 2009 from 3.75% for the year ended December 31, 2008, and
our net interest margin increased 2 basis points to 3.90% for the year ended December 31, 2009 from 3.88% for the year ended December 31,
2008.

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      Provision for Loan Losses. We recorded a provision for loan losses of $687,000 for the year ended December 31, 2009 and a provision
for loan losses of $391,000 for the year ended December 31, 2008. The primary reasons for the increase in the provision for loan losses were an
increase in our net loans of $6.5 million and an increase in non-performing loans as well as the general economic conditions in our market area.
At December 31, 2009, non-performing loans including troubled debt restructurings not included in non-accrual loans totaled $3.4 million, or
1.99% of total loans, as compared to $1.5 million, or 0.89% of total loans, at December 31, 2008. The increase in non-performing loans
including troubled debt restructurings not included in non-accrual loans was primarily in the commercial real estate loan portfolio, a higher risk
portfolio as compared to one- to four-family residential mortgage loans. The allowance for loans losses to total loans receivable increased to
0.55% at December 31, 2009 as compared to 0.29% at December 31, 2008.

    The allowance for loan losses as a percentage of non-performing loans decreased to 27.4% at December 31, 2009 from 32.7% at
December 31, 2008. To the best of our knowledge, we have provided for all losses that are both probable and reasonable to estimate at
December 31, 2009 and 2008.

     Noninterest Income. Noninterest income decreased slightly by $29,000, or 1.2%, to $2.3 million for the year ended December 31, 2009
from $2.4 million for the year ended December 31, 2008. The decrease was due to a $164,000 decrease in service charges to $1.3 million for
2009 from $1.5 million for 2008, a $41,000 decrease in gain on sale of investment securities to $34,000 for 2009 from $75,000 for 2008 and a
$62,000 decrease in other income to $520,000 for 2009 from $582,000 for 2008. These decreases were partially offset by an increase of
$238,000 in gains on sales of mortgage loans to $464,000 for 2009 from $226,000 for 2008 due to the sale of $30.0 million in mortgage loans
during 2009.

      Noninterest Expense. Noninterest expense increased $300,000, or 3.6%, to $8.7 million for the year ended December 31, 2009 from $8.3
million for the year ended December 31, 2008. This increase was primarily attributable to a $171,000 increase in FDIC insurance assessments,
a $61,000 increase in other expense, a $137,000 increase in professional and outside services expense, including outside operations and
compliance consultant expense, and a $30,000 increase in data processing expense, partially offset by a $51,000 decrease in publicity,
promotion, stationary and supplies and a $33,000 decrease in occupancy costs.

      Income Tax Expense. Income tax expense was $362,000 for the year ended December 31, 2009 compared to $111,000 for 2008,
reflecting our higher income before income tax expense for 2009 versus 2008. Our effective tax rate was 42.3% for the year ended
December 31, 2009 compared to 79.9% for the year ended December 31, 2008.

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Average Balances and Yields
      The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated.
Tax-equivalent yield adjustments have not been made for tax-exempt securities. All average balances are daily average balances. Non-accrual
loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set
forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

                                                 At March 31,                           For the Three Months Ended March 31,
                                                     2010                        2010                                          2009
                                                                    Average                                     Average
                                                                   Outstanding                   Yield/        Outstanding                  Yield/
                                                  Yield/Rate        Balance       Interest       Rate (1)       Balance         Interest    Rate (1)
Interest-earning assets:
Loans                                                    5.80 %   $   170,010    $ 2,420            5.69 %    $    167,408     $ 2,495         5.96 %
Taxable investment securities                            3.24          11,883        102            3.43             7,238          93         5.14
Nontaxable investment securities                         3.84           1,369         13            3.80               481           5         4.16
Total other interest earning assets                      0.66          35,664         44            0.49            10,706          25         0.93
FHLB of Dallas stock                                     1.63           1,596          3            0.75             1,520           1         0.26
    Total interest-earning assets                        4.78         220,522       2,582           4.68           187,353        2,619        5.59
Non-interest-earning assets                                             9,224                                        9,788
     Total assets                                                 $   229,746                                 $    197,141

Interest-bearing liabilities:
Savings deposits                                         0.25          32,281            20         0.25            29,675             19      0.26
Money market                                             0.81          32,404            73         0.90            24,256            102      1.68
Demand deposit accounts                                  0.28          50,737            38         0.30            43,846             60      0.55
Certificates of deposit                                  2.16          58,032           318         2.19            49,500            395      3.19
    Total deposits                                       0.98         173,454           449         1.04           147,277            576      1.56
Borrowings                                               2.97          31,769           118         1.49            27,823            192      2.76
Other liabilities                                         —               —             —            —                 —              —         —
    Total interest-bearing liabilities                   1.14         205,223           567         1.11           175,100            768      1.75
Non-interest-bearing liabilities                                        7,205                                        5,206
    Total liabilities                                                 212,428                                      180,306
Equity                                                                 17,318                                       16,835
     Total liabilities and equity                                 $   229,746                                 $    197,141

Net interest income                                                              $ 2,015                                       $ 1,851

Net interest rate spread (2)                             3.64 %                                     3.58 %                                     3.84 %
Net interest-earning assets (3)                                   $    15,299                                 $     12,253

Net interest margin (4)                                                                             3.65 %                                     3.95 %
Average interest-earning assets to
  interest-bearing liabilities                        107.00 %                                   107.45 %                                   107.00 %

                                                                                                                        (footnotes on following page)

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                                                                              For the Years Ended December 31,
                                                   2009                                           2008                                   2007
                                      Average                                    Average                                    Average
                                     Outstanding                   Yield/      Outstanding                     Yield/      Outstanding                   Yield/
                                      Balance          Interest    Rate           Balance          Interest    Rate         Balance       Interest       Rate
                                                                                    (Dollars in thousands)
Interest-earning assets:
Loans                                $ 167,995     $ 10,003          5.95 % $ 145,948          $ 8,719            5.97 % $ 136,679       $ 7,951           5.82 %
Taxable investment securities           11,053          425          3.85      12,971              635            4.90      16,539           800           4.84
Nontaxable investment
  securities                               1,024              40     3.91               485            19         3.92             147               6     4.08
Total other interest-earning
  assets                                  19,735            128      0.65            7,264           177          2.44          10,062          409        4.06
FHLB of Dallas stock                       1,346              3      0.22              833            21          2.52             718           41        5.71

    Total interest-earning
       assets                            201,153        10,599       5.27          167,501         9,571          5.71         164,145      9,207          5.61
Non-interest-earning assets                9,422                                     9,836                                       9,062

      Total assets                   $ 210,575                                $ 177,337                                    $ 173,207

Interest-bearing liabilities:
Savings deposits                     $    32,140             82      0.26     $     31,658            89          0.28     $    32,891        118          0.36
Money market                              27,788            345      1.24           27,290           662          2.43          28,378      1,070          3.77
Demand deposit accounts                   45,944            175      0.38           42,345           255          0.60          42,624        345          0.81
Certificates of deposit                   56,906          1,582      2.78           40,934         1,571          3.84          38,741      1,782          4.60

    Total deposits                       162,778          2,184      1.34          142,227         2,577          1.81         142,634      3,315          2.32
Borrowings                                24,279            567      2.34           13,791           487          3.53           9,564        455          4.76
Other liabilities                            —              —         —                —             —             —               —          —             —

    Total interest-bearing
       liabilities                       187,057          2,751      1.47          156,018         3,064          1.96         152,198      3,770          2.48
Non-interest-bearing liabilities           6,528                                     4,683                                       3,334

    Total liabilities                    193,585                                   160,701                                     155,532
Equity                                    16,990                                    16,636                                      17,675

      Total liabilities and equity   $ 210,575                                $ 177,337                                    $ 173,207

Net interest income                                $      7,848                                $ 6,507                                   $ 5,437

Net interest rate spread (2)                                         3.80 %                                       3.75 %                                   3.13 %
Net interest-earning assets (3)      $    14,096                              $     11,483                                 $    11,947

Net interest margin (4)                                              3.90 %                                       3.88 %                                   3.31 %
Average of interest-earning
  assets to interest-bearing
  liabilities                                                      107.54 %                                    107.36 %                                  107.85 %

(1)    Yields and rates for the three months ended March 31, 2010 and 2009 are annualized.
(2)    Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing
       liabilities.
(3)    Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(4)    Net interest margin represents net interest income divided by average total interest-earning assets.

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Rate/Volume Analysis
      The following table presents the effects of changing rates and volumes on our net interest income for the fiscal years indicated. The rate
column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects
attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For
purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated to the changes due to rate
and the changes due to volume in proportion to the relationship of the absolute dollar amounts of change in each.

                                           Three Months Ended March 31,                      Years Ended December 31,                           Years Ended December 31,
                                                     2010 vs. 2009                                 2009 vs. 2008                                      2008 vs. 2007
                                                                      Total                                                Total                                          Total
                                         Increase (Decrease)        Increase            Increase (Decrease)              Increase          Increase (Decrease)          Increase
                                               Due to              (Decrease)                 Due to                    (Decrease)               Due to                (Decrease)

                                     Volume            Rate                        Volume                Rate                          Volume               Rate
                                                                                                (In thousands)
Interest-earning assets:
     Loans                           $      39     $     (114 )   $        (75 )   $ 1,313           $         (29 )   $     1,284     $     557        $        211   $      768
     Taxable investment securities          47            (38 )              9         (86 )                  (124 )          (210 )        (175 )                10         (165 )
     Nontaxable investment
       securities                            8            —                 8              21                  —                21             13             —                13
     Other interest earning assets         35             (16 )            19             148                 (197 )           (49 )          (95 )          (137 )          (232 )
     FHLB of Dallas stock                  —                2               2               8                  (26 )           (18 )            6             (26 )           (20 )

         Total interest-earning
           assets                          129           (166 )            (37 )        1,404                 (376 )         1,028           306                 58           364

Interest-bearing liabilities:
     Savings deposits                        2             (1 )              1              1                   (8 )            (7 )           (4 )           (25 )           (29 )
     Money market                           28            (57 )            (29 )           12                 (329 )          (317 )          (40 )          (368 )          (408 )
     Demand deposit accounts                 8            (30 )            (22 )           20                 (100 )           (80 )           (2 )           (88 )           (90 )
     Certificates of deposit                60           (137 )            (77 )          515                 (504 )            11             96            (307 )          (211 )

          Total deposits                   98            (225 )          (127 )           548                 (941 )          (393 )          50             (788 )          (738 )
Borrowings                                 24             (98 )           (74 )           283                 (203 )            80           169             (137 )            32
Other liabilities                          —              —               —               —                    —               —             —                —               —

         Total interest-bearing
           liabilities                     122           (323 )          (201 )           831            (1,144 )             (313 )         219             (925 )          (706 )

Change in net interest income        $        7    $      157     $       164      $      573        $        768      $     1,341     $       87       $        983   $    1,070



Management of Market Risk
       General . Because the majority of our assets and liabilities are sensitive to changes in interest rates, our most significant form of market
risk is interest rate risk. We are vulnerable to an increase in interest rates to the extent that our interest-bearing liabilities mature or reprice more
quickly than our interest-earning assets. As a result, a principal part of our business strategy is to manage interest rate risk and limit the
exposure of our net interest income to changes in market interest rates. Accordingly, our board of directors has established an Asset/Liability
Management Committee that is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of
risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this
risk consistent with the guidelines approved by the board of directors.

      Our interest rate sensitivity is monitored through the use of a net interest income simulation model that generates estimates of the change
in our net interest income and net portfolio value over a range of interest rate scenarios. The modeling assumes loan prepayment rates,
reinvestment rates and deposit decay rates based on historical experience and current economic conditions.

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     We have sought to manage our interest rate risk in order to control the exposure of our earnings and capital to changes in interest rates.
As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk:
      (i)     sell long-term, fixed-rate one- to four-family residential mortgage loans (terms of 15 years or more) that we originate;
      (ii)    lengthen the weighted average maturity of our liabilities through retail deposit pricing strategies and through longer-term wholesale
              funding sources such as fixed-rate advances from the Federal Home Loan Bank of Dallas;
      (iii)    invest in shorter- to medium-term securities;
      (iv) originate commercial real estate loans, commercial loans and consumer loans, which tend to have shorter terms and higher interest
           rates than residential mortgage loans, and which generate customer relationships that can result in larger noninterest-bearing
           demand deposit accounts; and
      (v)     maintain adequate levels of capital.

      We have not engaged in hedging through the use of derivatives.

       Net Portfolio Value . The Office of Thrift Supervision requires the computation of amounts by which the net present value of an
institution’s cash flow from assets, liabilities and off-balance sheet items (the institution’s net portfolio value or ―NPV‖) would change in the
event of a range of assumed changes in market interest rates. We measure our interest rate risk and potential change in our NPV through the use
of the FTN Financial Sendero Asset/Liability Management Analysis system. This simulation model uses a discounted cash flow analysis and
an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. Historically, the model estimated the economic
value of each type of asset, liability and off-balance sheet contract under the assumption that the United States Treasury yield curve increases
or decreases instantaneously by 100 to 300 basis points in 100 basis point increments. However, given the current relatively low level of market
interest rates, an NPV calculation for an interest rate decrease of greater than 100 basis points has not been prepared. A basis point equals
one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a
100 basis point increase in the ―Change in Interest Rates‖ column below. FTN Financial provides us the results of the interest rate sensitivity
model, which is based on information we provide to FTN Financial to estimate the sensitivity of our net portfolio value.

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      The table below sets forth, as of March 31, 2010, the calculation of the estimated changes in our net portfolio value that would result from
the designated immediate changes in the United States Treasury yield curve.

                                                                      At March 31, 2010
     Change in
   Interest Rates     Estimated                                             NPV as a Percentage of Present
 (basis points) (1)    NPV (2)        Estimated (Decrease) in NPV                  Value of Assets (3)                                 Net Interest Income
                                                                                                   Increase
                                                                                                 (Decrease)
                                                                            NPV Ratio (         (basis point          Estimated Net             Increase in Estimated Net
                                                                                4)                     s)            Interest Income                 Interest Income

                                      Amount                Percent                                                                             Amount             Percent
                                                                               (Dollars in thousands)
             +300     $ 17,362    $      (4,533 )             (20.70 )             8.06 %               (150 )   $             9,353        $         160               1.74 %
             +200       19,246           (2,649 )             (12.10 )             8.74 %                (82 )                 9,339                  146               1.59 %
             +100       21,022             (873 )              (3.99 )             9.34 %                (22 )                 9,300                  107               1.16 %
                0       21,895              —                    —                 9.56 %                —                     9,193                  —                  —
             -100       20,005           (1,890 )              (8.63 )             8.70 %                (86 )                 9,440                  247               2.69 %

(1)     Assumes an instantaneous uniform change in interest rates at all maturities.
(2)     NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
(3)     Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
(4)     NPV Ratio represents NPV divided by the present value of assets.

       Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of
market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. The FTN Financial
Sendero Asset/Liability Management Analysis system illustrates the change in the economic value of our assets and liabilities at March 31,
2010 assuming an immediate change in interest rates. The table above indicates that at March 31, 2010, in the event of a 200 basis point
increase in interest rates, we would experience a 12.1% decrease in net portfolio value. In the event of a 100 basis point decrease in interest
rates, we would experience an 8.6% decrease in net portfolio value.

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      Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in net portfolio value.
Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to
changes in market interest rates. In this regard, the net portfolio value and net interest income information presented assume that the
composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured
and assume that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of
specific assets and liabilities. Accordingly, although interest rate risk calculations provide an indication of our interest rate risk exposure at a
particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest
rates on our net interest income and will differ from actual results.

Liquidity and Capital Resources
      Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of
deposit inflows, loan sales and repayments, advances from the Federal Home Loan Bank of Dallas, and maturities and sales of securities. While
maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are
greatly influenced by general interest rates, economic conditions and competition. Our Asset/Liability Management Committee is responsible
for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing
needs and deposit withdrawals of our customers as well as unanticipated contingencies. For the three months ended March 31, 2010 and the
year ended December 31, 2009, our liquidity ratio averaged 20.7% and 18.3%, respectively. We believe that we have enough sources of
liquidity to satisfy our short- and long-term liquidity needs as of March 31, 2010.

     We regularly monitor and adjust our investments in liquid assets based upon our assessment of: (i) expected loan demand; (ii) expected
deposit flows; (iii) yields available on interest-earning deposits and securities; and (iv) the objectives of our asset/liability management
program. Excess liquid assets are invested generally in interest-earning deposits and short- and intermediate-term securities.

      Our most liquid assets are cash and cash equivalents. The levels of these assets are affected by our operating, financing, lending and
investing activities during any given period. At March 31, 2010, cash and cash equivalents totaled $35.5 million. Securities classified as
available-for-sale, which provide additional sources of liquidity, totaled $13.3 million at March 31, 2010.

     Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Statements of Cash
Flows included in our financial statements.

      At March 31, 2010, we had $7.7 million in loan commitments outstanding, including $5.2 million in unused lines of credit to borrowers.
Certificates of deposit due within one year of March 31, 2010 totaled $41.0 million, or 21.3% of total deposits. If these deposits do not remain
with us, we will be required to seek other sources of funds, including loan sales and Federal Home Loan Bank advances. Depending on market
conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due
on or before March 31, 2011. We believe, however, that based on past experience, a significant portion of such deposits will remain with us.
We have the ability to attract and retain deposits by adjusting the interest rates offered.

      Our primary investing activity is originating loans. During the three months ended March 31, 2010 and the year ended December 31,
2009, we originated $10.9 million and $75.6 million of loans, respectively, and during the year ended December 31, 2008, we originated $70.9
million of loans. We purchased $520,000 and $11.5 million of securities during the three months ended March 31, 2010 and the year ended
December 31, 2009, respectively, and we purchased $2.0 million of securities during the year ended December 31, 2008.

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       Financing activities consist primarily of activity in deposit accounts and Federal Home Loan Bank advances. We had a net increase in
total deposits of $19.6 million for the three months ended March 31, 2010, and a net increase in total deposits of $31.1 million for the year
ended December 31, 2009. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our
local competitors, and by other factors.

      Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate
them internally, borrowing agreements exist with the Federal Home Loan Bank of Dallas, which provides an additional source of funds.
Federal Home Loan Bank advances were $16.0 million at March 31, 2010, unchanged from December 31, 2009. Federal Home Loan Bank
advances have been used primarily to fund loan demand and to purchase investment securities. At March 31, 2010, we had the ability to borrow
up to $35.4 million from the Federal Home Loan Bank of Dallas.

      SharePlus Federal Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based
capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets
and off-balance sheet items to broad risk categories. At March 31, 2010, SharePlus Federal Bank exceeded all regulatory capital requirements.
SharePlus Federal Bank is considered ―well capitalized‖ under regulatory guidelines. See ―Supervision and Regulation—Federal Banking
Regulation—Capital Requirements‖ and Note 15 — Regulatory Matters of the notes to the financial statements included in this prospectus.

      The net proceeds from the stock offering will significantly increase our liquidity and capital resources. Over time, the initial level of
liquidity will be reduced as net proceeds from the stock offering are used for general corporate purposes, including the funding of new loans.
Our financial condition and results of operations will be enhanced by the net proceeds from the stock offering, resulting in increased net
interest-earning assets and net interest income. However, due to the increase in equity resulting from the net proceeds raised in the stock
offering, our return on equity will be adversely affected.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
      Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks,
such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a
significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit
policies and approval process accorded to loans we make. For additional information, see Note 10 – Financial Instruments with Off-Balance
Sheet Risk of the notes to the financial statements included in this prospectus.

     Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include
operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

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Recent Accounting Pronouncements
       On January 1, 2009, recent authoritative accounting guidance under ASC Topic 805, ―Business Combinations,‖ became applicable to the
SharePlus Federal Bank’s accounting for business combinations closing on or after January 1, 2009. ASC Topic 805 applies to all transactions
and other events in which one entity obtains control over one or more other businesses. ASC Topic 805 requires an acquirer, upon initially
obtaining control of another entity, to recognize the assets, liabilities and any non-controlling interest in the acquiree at fair value as of the
acquisition date. Contingent consideration is required to be recognized and measured at fair value on the date of acquisition rather than at a
later date when the amount of that consideration may be determinable beyond a reasonable doubt. This fair value approach replaces the
cost-allocation process required under previous accounting guidance whereby the cost of an acquisition was allocated to the individual assets
acquired and liabilities assumed based on their estimated fair value. ASC Topic 805 requires acquirers to expense acquisition-related costs as
incurred rather than allocating such costs to the assets acquired and liabilities assumed, as was previously the case under prior accounting
guidance. Assets acquired and liabilities assumed in a business combination that arise from contingencies are to be recognized at fair value if
fair value can be reasonably estimated. If fair value of such an asset or liability cannot be reasonably estimated, the asset or liability would
generally be recognized in accordance with ASC Topic 450, ―Contingencies.‖ Under ASC Topic 805, the requirements of ASC Topic 420,
―Exit or Disposal Cost Obligations,‖ would have to be met in order to accrue for a restructuring plan in purchase accounting. Pre-acquisition
contingencies are to be recognized at fair value, unless it is a non-contractual contingency that is not likely to materialize, in which case,
nothing should be recognized in purchase accounting and, instead that contingency would be subject to probable and estimable criteria of ASC
Topic 450, ―Contingencies‖.

       Recent authoritative accounting guidance under ASC Topic 320, ―Investments—Debt and Equity Securities,‖ (i) changes existing
guidance for determining whether an impairment is other than temporary to debt securities and (ii) replaces the existing requirement that the
entity’s management assert it has both the intent and ability to hold an impaired security until recovery with a requirement that management
assert: (a) it does not have the intent to sell the security; and (b) it is more likely than not that it will not have to sell the security before recovery
of its cost basis. Under ASC Topic 320, declines in the fair value of held to maturity and available for sale securities below their cost that are
deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The
amount of the impairment related to other factors is recognized in other comprehensive income. SharePlus Federal Bank adopted the provisions
of the recent authoritative accounting guidance under ASC Topic 320 during 2009. Adoption of the recent guidance did not significantly
impact our financial statements.

      ASC Topic 820, ―Fair Value Measurements and Disclosures,‖ defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of ASC Topic 820 became
effective for SharePlus Federal Bank on January 1, 2009 for nonfinancial assets and nonfinancial liabilities.

      Additional recent authoritative accounting guidance under ASC Topic 820 affirms that the objective of fair value when the market for an
asset is not active is the price that would be received to sell the asset in an orderly transaction, and clarifies and includes additional factors for
determining whether there has been a significant decrease in market activity for an asset when the market for that asset is not active. ASC
Topic 820 requires an entity to base its conclusion about whether a transaction was not orderly on the weight of the evidence. The recent
accounting guidance amended prior guidance to expand certain disclosure requirements. SharePlus Federal Bank adopted the recent
authoritative accounting guidance under ASC Topic 820 during 2009. Adoption of the recent guidance did not significantly impact our
financial statements.

      Beginning January 2010, new authoritative guidance under ASC Topic 820 requires entities to disclose transfers in and out of levels 1
and 2, and to expand the reconciliation of level 3 fair value measurements by presenting separately information about purchases, sales,
issuances and settlements.

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The updated guidance also clarifies disclosure requirements on the level of disaggregation (provide fair value measurement disclosures for each
class of assets and liabilities) and inputs and valuation techniques (disclose for fair value measurements that fall in either level 2 or level 3).
This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for disclosures about purchases,
sales, issuances and settlements in the reconciliation of level 3 fair value measurements. Those disclosures are effective for periods after
December 15, 2010. Adoption of the new effective guidance did not significantly impact our financial statements.

      Recent authoritative accounting guidance under ASC Topic 855, ―Subsequent Events,‖ establishes general standards of accounting for
and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. ASC
Topic 855 defines (i) the period after the balance sheet date during which a reporting entity’s management should evaluate events or
transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity
should recognize events or transactions occurring after the balance sheet date in its financial statements, and (iii) the disclosures an entity
should make about events or transactions that occurred after the balance sheet date. The recent authoritative accounting guidance under ASC
Topic 855 became effective for the SharePlus Federal Bank’s financial statements for periods ending after June 15, 2009 and did not have a
significant impact on our financial statements.

      New authoritative accounting guidance under ASC Topic 860, ―Transfers and Servicing,‖ amends prior accounting guidance to enhance
reporting about transfers of financial assets, including securitizations, and where companies have continuing exposure to the risks related to
transferred financial assets. The new authoritative accounting guidance eliminates the concept of a ―qualifying special-purpose entity‖ and
changes the requirements for derecognizing financial assets. The new authoritative accounting guidance also requires additional disclosures
about all continuing involvements with transferred financial assets including information about gains and losses resulting from transfers during
the period. The new authoritative accounting guidance under ASC Topic 860 became effective January 1, 2010 and did not have a significant
impact on our financial statements.

Impact of Inflation and Changing Prices
      Our financial statements and related notes have been prepared in accordance with U.S. GAAP. U.S. GAAP generally requires the
measurement of financial position and operating results in terms of historical dollars without consideration of changes in the relative
purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike
industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater
impact on performance than the effects of inflation.

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                                                     BUSINESS OF SP BANCORP, INC.

      SP Bancorp, Inc. is incorporated in the State of Maryland. We have not engaged in any business to date. Upon completion of the
conversion, we will own all of the issued and outstanding stock of SharePlus Federal Bank. We will retain up to 50% of the net proceeds from
the offering and initially invest the remaining net proceeds in SharePlus Federal Bank as additional capital of SharePlus Federal Bank. SP
Bancorp, Inc. will use a portion of the net proceeds to make a loan to the employee stock ownership plan. At a later date, we may use the net
proceeds to pay dividends to stockholders and we may repurchase shares of our common stock, subject to regulatory limitations. We will invest
our initial capital as discussed in ―How We Intend to Use the Proceeds from the Offering.‖

     In the future, SP Bancorp, Inc., as the holding company of SharePlus Federal Bank, will be authorized to pursue other business activities
permitted by applicable laws and regulations, which may include the acquisition of banking and financial services companies. See ―Supervision
and Regulation—Holding Company Regulation‖ for a discussion of the activities that are permitted for savings and loan holding companies.
We currently have no understandings or agreements to acquire other financial institutions. We may also borrow funds for reinvestment in
SharePlus Federal Bank.

      Following the offering, our cash flow will depend on earnings from the investment of the net proceeds from the offering that we retain,
and any dividends we receive from SharePlus Federal Bank. Initially, SP Bancorp, Inc. will neither own nor lease any property, but will instead
pay a fee to SharePlus Federal Bank for the use of its premises, equipment and furniture. At the present time, we intend to employ only persons
who are officers of SharePlus Federal Bank to serve as officers of SP Bancorp, Inc. We will, however, use the support staff of SharePlus
Federal Bank from time to time. We will pay a fee to SharePlus Federal Bank for the time devoted to SP Bancorp, Inc. by employees of
SharePlus Federal Bank. However, these persons will not be separately compensated by SP Bancorp, Inc. SP Bancorp, Inc. may hire additional
employees, as appropriate, to the extent it expands its business in the future.

                                              BUSINESS OF SHAREPLUS FEDERAL BANK

General
      SharePlus Federal Bank is a federally chartered savings bank headquartered in Plano, Texas. SharePlus Federal Bank was originally
chartered in 1958 as a federal credit union serving the employees and family members of Frito-Lay, Inc. Over the years and through a series
mergers, the credit union grew to serve also the employees and family members of YUM! Brands, Inc., A&W Restaurants, Inc., KFC
Corporation, Long John Silvers, Inc., Pizza Hut, Inc., Taco Bell Corp., and various PepsiCo divisions, as well as dozens of other companies
who provided credit union benefits to their employees.

      We converted to a federal savings bank charter on October 1, 2004, at which time we had $142.9 million in total loans, $149.3 million in
deposits and $18.4 million in total members’ equity. The objective of the charter conversion was to implement our business strategy of
broadening our banking services into residential and commercial real estate and commercial lending, which has allowed us to better serve the
needs of our customers and the local communities in which we operate, and to enable the Bank to access the capital markets through a potential
stock offering. As of March 31, 2010, SharePlus Federal Bank had total assets of $227.2 million, $167.2 million of loans, net, $192.2 million of
deposits and equity capital of $17.0 million.

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      We provide financial services to individuals, families and businesses through our eight banking offices. Five of our branch offices are
located in and around our headquarters in Plano, Texas. Additionally, two of our branches are located in Louisville, Kentucky and one is
located in Irvine, California. Six of our eight offices are located in corporate offices of our former sponsor companies, and, because of their
locations within corporate facilities of our former sponsor companies, the substantial majority of their customers are employees of these former
sponsor companies. Upon completion of the mutual-to-stock conversion and stock offering, we intend to continue to operate out from our eight
branch offices.

      Our business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated
from operations and borrowings, in mortgage loans secured by residential real estate, home equity loans and lines of credit, commercial real
estate loans, consumer loans (consisting primarily of automobile loans) and to a lesser extent, commercial loans. At March 31, 2010, $146.4
million, or 86.8% of our total loan portfolio, was comprised of residential and commercial real estate loans. We also offer brokerage services
for the purchase and sale of non-deposit investment and insurance products through a third party brokerage arrangement.

      The majority of our residential and commercial real estate loans are originated through our Texas branch network and are collateralized
by properties within this market area. Additionally, we are a preferred lender through various employee loan and executive relocation loan
programs for certain of our former sponsor companies. Through these programs, we have the opportunity to provide loans on the primary
residences of employees and executives who are being relocated by these companies, which has resulted in a portion of our residential real
estate loan portfolio being collateralized by properties outside of our Texas market areas. Although our participation in these programs can
result in our originating a loan in a location that is not within one of our market areas, we underwrite these loans with the same standards as our
in-market loans. The relocation programs have historically included price protections to the relocating executive, which we believe provides
additional protection to us, although the programs do not provide us any direct insurance or protections on our loan to the executive. At
March 31, 2010, we had no classified or non-performing loans that were originated through our participation in an executive relocation
program.

     Generally, we retain in our portfolio all adjustable-rate loans that we originate, as well as fixed-rate one- to four-family residential
mortgage loans with terms of less than 15 years. We currently sell substantially all of the long-term, fixed-rate one- to four-family residential
mortgage loans (terms of 15 years or more) that we originate to third-party investors on a servicing-released basis, in order to generate fee
income and for interest rate risk management purposes.

      We also invest in investment securities, primarily consisting of government sponsored mortgage-backed securities, and to a lesser extent,
municipal obligations, agency bonds and collateralized mortgage obligations guaranteed by Fannie Mae and Freddie Mac. At March 31, 2010,
our investment securities portfolio, all of which were held as available-for-sale, had an amortized cost of $13.0 million.

    We offer a variety of deposit accounts, including noninterest-bearing and interest-bearing demand deposit accounts, savings accounts,
money market accounts and certificates of deposit.

     SharePlus Federal Bank’s executive offices are located at 5224 W. Plano Parkway, Plano, Texas 75093. Our telephone number at this
address is (972) 931-5311. Our website address is www.shareplus.com . Information on our website is not incorporated into this prospectus and
should not be considered part of this prospectus.

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Market Area
     Our primary market area includes the cities of Plano and Dallas and Collin County and Dallas County and adjacent communities in the
Dallas-Fort Worth-Arlington metropolitan statistical area (―MSA‖). This region is also known as the ―Dallas-Fort Worth Metroplex‖ or the
―DFW Metroplex‖ and encompasses 12 counties in North Texas: Collin, Dallas, Delta, Denton, Ellis, Hunt, Johnson, Kaufman, Parker,
Rockwall, Tarrant, and Wise Counties. The city of Plano is an affluent suburb, north of Dallas and is the ninth largest city in the state.

      In 2005, Plano was designated the best place to live in the Western United States by CNN Money magazine. In 2006, Plano was selected
as the 11 th best place to live in the United States by CNN Money magazine. Plano has been rated as the wealthiest city in the United States by
CNN Money. In 2008, Forbes.com selected Plano as one of the three ―Top Suburbs To Live Well‖ of Dallas. The United States Census Bureau
declared Plano the wealthiest city of 2008 by comparing the median household income for all U.S. cities whose populations were greater than
250,000.

     Plano is the corporate headquarters for some of the country’s largest and most recognized companies with the following companies
having their headquarters (or major regional offices) in Plano: Adams Golf, Capital One Auto Finance, Dr Pepper Snapple Group (formerly
Cadbury Schweppes Americas Beverages), Cinemark Theatres, HP Enterprise Services, Frito Lay, J.C. Penney, Dell Perot Systems and
Rent-A-Center.

    The total area of the DFW Metroplex contains 9,103 square miles. Its size makes it larger than the area of Rhode Island and Connecticut
combined. The DFW Metroplex produces approximately 32% of the Texas gross state product.

      The population of the DFW Metroplex was estimated at 6.4 million in 2009 and is projected to grow by 11.9% over the five-year period
from 2009 to 2014. The population expansion in the DFW Metroplex exceeded the national and state population growth rates from 2000 to
2009 and is expected to continue to sustain this trend. The population in Collin County was estimated at approximately 795,437 in 2009 and
has experienced significant growth in recent years. The Collin County population increased by 61.8% in the 2000 to 2009 period and is
projected to increase by 25.8% in the 2009 to 2014 period. The median age in the DFW Metroplex at 33.4 years was younger than the national
median of 36.9 years and comparable to the state median of 33.6 years.

      The median household income in the DFW Metroplex was $63,485 in 2009 which exceeded the national and state medians of $54,719
and $52,382, respectively. The median household income in Collin County and the city of Plano was $97,234 and $103,514, respectively. The
percentage of households with incomes of greater than $100,000 was 25.4% in the DFW Metroplex and 48.9% in Collin County, compared to
19.3% for the United States and 18.4% for Texas. The concentration of higher household incomes in the DFW Metroplex is attributable
partially to its diverse economic base and greater employment in white collar industry sectors.

       Like the national economy, the Texas economy has been in a recession, but the Texas economy has been more stable than the nation as a
whole. The state’s seasonally adjusted unemployment rate rose from 4.8% in June 2008 to 7.5% in June 2009, while the corresponding U.S.
rate increased from 5.6% to 9.5% during the same period. The Dallas-Fort Worth Metroplex unemployment rate rose from 5.1% in June 2008
to 8.2% in June 2009. The state’s unemployment rate remained two percentage points below the national unemployment rate and has trailed the
national rate for the past 30 consecutive months.

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     In addition to the serving the DFW Metroplex, we also serve retail customers (primarily employees of our former sponsor companies)
through branches that are located in corporate facilities of our former sponsor companies in Louisville, Kentucky and Irvine, California.

Competition
      We face intense competition in our market area both in making loans and attracting deposits. We compete with commercial banks,
savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies and investment banking
firms. Some of our competitors have greater name recognition and market presence that benefit them in attracting business, and offer certain
services that we do not or cannot provide.

      Our deposit sources are primarily concentrated in the communities surrounding our banking offices, located in the Dallas-Fort Worth
Metroplex and surrounding communities in North Texas. As of March 31, 2010, we ranked 71st in FDIC-insured deposit market share (out of
187 bank and thrift institutions with offices in the Dallas-Fort Worth-Arlington, Texas, MSA) with a 0.09% market share. Such data does not
reflect deposits held by credit unions.

Lending Activities
       Our principal lending activity is the origination of residential mortgage loans secured by residential real estate, commercial real estate and
home equity loans, including lines of credit and home improvement loans, consumer loans (consisting primarily of automobile loans) and to a
lesser extent, commercial loans. The following table provides a historical breakdown of our loan portfolio at the end of each of our last five
fiscal years and at March 31, 2010.

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      Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio, including loans held for sale, by type
of loan at the dates indicated.
                                  At March 31,
                                      2010                                                                                      At December 31,

                                                                      2009                        2008                                       2007                           2006                           2005
                              Amount             Percent     Amount          Percent     Amount               Percent               Amount          Percent        Amount          Percent        Amount          Percent
                                                                                                       (Dollars in thousands)
Mortgage loans:
    One- to four-family
      residential       $ 123,075                 72.97 %   $ 125,418         72.96 %   $ 116,813               70.87 %         $     95,852         69.71 %   $     97,175         68.15 %   $     85,076         62.65 %
    Home equity (1)         8,815                  5.23         8,996          5.23         9,051                5.49                  7,889          5.74            8,706          6.11            6,643          4.89
    Commercial real
      estate               23,358                 13.85        22,615         13.16        17,498               10.62                  5,551           4.04             —              —               —              —
Consumer loans:
    Automobile and
      other vehicles        8,901                   5.28        9,892           5.75       15,525                 9.42                22,618         16.45           30,551         21.42           35,858         26.41
    Signature (2)           1,891                   1.12        2,072           1.21        2,533                 1.54                 2,559          1.86            3,403          2.39            5,218          3.84
    Other (3)               1,509                   0.89        1,536           0.89        2,176                 1.32                 2,181          1.59            2,755          1.93            3,003          2.21
Commercial loans            1,109                   0.66        1,369           0.80        1,225                 0.74                   848          0.61              —            —                 —            —

              Total loans    $ 168,658           100.00 %   $ 171,898        100.00 %   $ 164,821              100.00 %         $ 137,498           100.00 %   $ 142,590           100.00 %   $ 135,798           100.00 %

Other items:
    Premiums on
        mortgage pools
        (4)                            46                             51                          76                                         95                         140                            —
      Deferred loan
        origination fees,
        net                        479                            458                         515                                        550                            684                            761
      Allowance for loan
        losses                   (1,994 )                        (940 )                      (480 )                                     (380 )                         (785 )                         (531 )

              Total loans,
                net          $ 167,189                      $ 171,467                   $ 164,932                               $ 137,763                      $ 142,629                      $ 136,028




(1)      Includes home equity loans, home equity lines of credit and home improvement loans.
(2)      Signature loans are unsecured.
(3)      Includes loans on recreational vehicles, boats, certificate of deposit and other securities and other secured loans.
(4)      Represents the premium over par value paid for purchased loans. The premium is amortized on a monthly basis as an adjustment to yield.

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     Loan Portfolio Maturities and Yields. The following table summarizes the scheduled repayments of our loan portfolio at December 31,
2009. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.

                                           One- to four-family                                   Commercial real             Automobile and other
                                              residential               Home equity                   estate                      vehicles
                                                         Weighted              Weighted                      Weighted                     Weighted
                                                          Average               Average                      Average                       Average
                                          Amount           Rate      Amount       Rate          Amount        Rate           Amount         Rate
Due During the Years
Ending December 31,
2010                                  $      1,479          5.93 %   $      20     6.21 %   $     4,509         6.38 %   $       718          5.74 %
2011                                           265          6.06 %          25     7.52 %         1,860         6.00 %         2,087          6.53 %
2012                                           —             — %            82     7.58 %         3,887         8.05 %         2,856          6.98 %
2013 to 2014                                   115          6.54 %         529     6.60 %        10,239         6.16 %         3,800          6.40 %
2015 to 2019                                 6,879          6.32 %       1,986     6.78 %         2,120         7.95 %           407          5.83 %
2020 to 2024                                10,848          6.72 %       2,749     6.97 %           —            — %              10          5.99 %
2025 and beyond                            105,832          5.59 %       3,605     4.72 %           —            — %              14          7.59 %
     Total                            $ 125,418             5.73 %   $ 8,996       6.01 %   $ 22,615            6.68 %   $     9,892          6.53 %


                                               Signature                   Other                 Commercial loans                  Total
                                                      Weighted                  Weighted                  Weighted                         Weighted
                                                       Average                   Average                   Average                         Average
                                           Amount        Rate        Amount       Rate          Amount        Rate           Amount         Rate
Due During the Years
Ending December 31,
2010                                      $     240         8.22 %   $    344      4.74 %   $ 1,369            6.58 %    $      8,679         6.27 %
2011                                            154        11.38 %        208      6.49 %       —               — %             4,599         6.46 %
2012                                            347        12.66 %        135      6.88 %       —               — %             7,307         7.83 %
2013 to 2014                                    284        11.97 %        390      7.45 %       —               — %            15,357         6.38 %
2015 to 2019                                     11         8.83 %        291      5.85 %       —               — %            11,694         6.67 %
2020 to 2024                                     41         9.15 %         17     10.00 %       —               — %            13,665         6.78 %
2025 and beyond                                 995        11.03 %        151      5.75 %       —               — %           110,597         5.61 %
     Total                                $ 2,072          11.08 %   $ 1,536       6.22 %   $ 1,369            6.58 %    $ 171,898            6.00 %


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      The following table sets forth the scheduled repayments of fixed- and adjustable-rate loans at December 31, 2009 that are contractually
due after December 31, 2010.

                                                                                                      Due After December 31, 2010
                                                                                              Fixed           Adjustable            Total
                                                                                                            (In thousands)
            Mortgage loans:
                One- to four-family residential                                            $ 39,722          $    84,217        $ 123,939
                Home equity                                                                   5,497                3,479            8,976
                Commercial real estate                                                       12,345                5,761           18,106
            Consumer loans:
                Automobile and other vehicles                                                   9,174                —                9,174
                Signature                                                                       1,676                156              1,832
                Other                                                                           1,192                —                1,192
            Commercial loans                                                                      —                  —                  —
                      Total loans                                                          $ 69,606          $    93,613        $ 163,219


      One- to Four-Family Residential Mortgage Loans. At March 31, 2010, $123.1 million, or 73.0% of our total loan portfolio, consisted of
one- to four-family residential mortgage loans. We offer residential mortgage loans that conform to Fannie Mae and Freddie Mac underwriting
standards (conforming loans) and non-conforming loans. We generally underwrite our one- to four-family residential mortgage loans based on
the applicant’s employment and credit history and the appraised value of the subject property. Our loans have fixed-rates and adjustable-rates,
with maturities of up to 30 years, and maximum loan amounts generally of up to $1.0 million. As of March 31, 2010, we had 19 one- to
four-family residential mortgage loans with balances greater than $1.0 million. At March 31, 2010, fixed-rate one- to four-family residential
mortgage loans totaled $39.4 million and adjustable-rate one- to four-family residential mortgage loans totaled $83.7 million.

     We currently offer fixed-rate conventional mortgage loans with terms of up to 30 years that are fully amortizing with monthly loan
payments, and adjustable-rate mortgage loans that generally provide an initial fixed interest rate for three, five, seven or ten years and that
amortize over a period up to 30 years. We do not offer discounted or teaser rates on our adjustable-rate mortgage loans.

       Our one- to four-family residential mortgage loans are generally conforming loans, underwritten according to Fannie Mae and Freddie
Mac guidelines. We generally originate both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits
as established by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac, which is currently $417,000 for single-family homes.
However, it is not uncommon for single-family houses in parts of our Collin County and Dallas County market area to have market prices well
in excess of this amount. At March 31, 2010, we had 47 one- to four-family residential mortgage loans that had principal balances in excess of
$750,000. At that date, our average one- to four-family residential mortgage loan had a principal balance of $239,000. We also originate loans
above the lending limit for conforming loans, which we refer to as ―jumbo loans.‖ We typically originate adjustable-rate jumbo loans with an
initial fixed-rate period of three, five, seven or ten years and which then adjust annually. Additionally, on occasion we will originate fixed-rate
jumbo loans with terms of up to 30 years. At March 31, 2010, our largest one- to four-family residential mortgage loan had an outstanding
balance of $2.2 million, was secured by a single family residence in Dallas, Texas, and was performing in accordance with its terms.

      We will originate first-lien mortgage loans with loan-to-value ratios in excess of 80%, provided that, with limited exceptions, the
borrower obtains private mortgage insurance. We generally will not originate loans with a loan-to-value ratio in excess of 90%. On occasion
we will originate a first-lien mortgage loan with a loan-to-value of 80% with a second-lien loan for an additional 10% loan-to-value with no
private mortgage insurance. As of March 31, 2010, $4.8 million, or 3.9%, of our residential loan portfolio had loan-to-value ratios in excess of
90% without private mortgage insurance.

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      We actively monitor our interest rate risk position to determine the desirable level of investment in fixed-rate mortgages. Generally, we
retain in our portfolio fixed-rate one- to four-family residential mortgage loans with terms of less than 15 years. We currently sell into the
secondary mortgage market most of our long-term, fixed-rate one- to four-family residential mortgage loans with terms of 15 years or more.
Such loans are sold on a servicing-released basis without recourse but with early-payment default provisions (generally, if one of the first four
payments becomes 90 days or more past-due). We will retain in our portfolio a small percentage of these long-term, fixed-rate loans if we
determine that doing so is warranted due to the customer relationship.

       We currently offer several types of adjustable-rate mortgage loans secured by residential properties with interest rates that are fixed for an
initial period ranging from three to ten years. We offer adjustable-rate mortgage loans that are fully amortizing. After the initial fixed period,
the interest rate on adjustable-rate mortgage loans is generally reset every year based upon a contractual spread or margin above the average
yield on the London Interbank Offered Rate (LIBOR), adjusted to a constant maturity of one year, as published weekly by the Federal Reserve
Board, subject to periodic and lifetime limitations on interest rate changes. Generally the initial change in interest rates on our adjustable-rate
mortgage loans cannot exceed two percentage points, subsequent interest rate changes cannot exceed two percentage points and total interest
rate changes cannot exceed six percentage points over the life of the loan.

      Adjustable-rate mortgage loans generally present different credit risks than fixed-rate mortgage loans, primarily because the underlying
debt service payments of the borrowers increase as interest rates increase, thereby increasing the potential for default and higher rates of
delinquency. At the same time, the marketability of the underlying collateral may be adversely affected by higher interest rates. Since changes
in the interest rates on adjustable-rate mortgages may be limited by an initial fixed-rate period or by the contractual limits on periodic interest
rate adjustments, adjustable-rate loans may not adjust as quickly to increases in interest rates as our interest-bearing liabilities.

     We do not offer or purchase loans that provide for negative amortization of principal, such as ―Option ARM‖ loans, where the borrower
can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan.

      We require title insurance on all of our one- to four-family residential mortgage loans that exceed $100,000, and we also require that
borrowers maintain fire and extended coverage casualty insurance (and, if appropriate, flood insurance) in an amount at least equal to the lesser
of the loan balance or the replacement cost of the improvements. We do not conduct environmental testing on residential mortgage loans unless
specific concerns for hazards are identified by the appraiser used in connection with the origination of the loan.

      At March 31, 2010 and December 31, 2009, we had no foreclosures in our one- to four-family residential mortgage loan portfolio.

      Home Equity Loans and Lines of Credit . In addition to traditional one- to four-family residential mortgage loans, we offer home equity
loans and home equity lines of credit that are secured by the borrower’s primary residence. Our home equity loans are primarily originated with
fixed rates of interest with terms of up to 15 years. Home equity loans and lines of credit are generally underwritten using the same criteria that
we use to underwrite one- to four-family residential mortgage loans. Home equity loans may be underwritten with a loan-to-value ratio of 80%
when combined with the principal balance of the existing mortgage loan.

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      Home equity lines of credit are generally originated as revolving lines with adjustable-rates of interest. At March 31, 2010, the
outstanding balance of revolving home equity lines of credit totaled $3.6 million, or 2.1% of our total loan portfolio, and the outstanding
balance of term home equity loans totaled $5.2 million, or 3.1% of our total loan portfolio.

       Home equity loans secured by second mortgages have greater risk than residential mortgage loans secured by first mortgages. We face
the risk that the collateral will be insufficient to compensate us for loan losses and costs of foreclosure. When customers default on their loans,
we attempt to foreclose on the property and resell the property as soon as possible to minimize foreclosure and carrying costs. However, the
value of the collateral may not be sufficient to compensate us for the amount of the unpaid loan and we may be unsuccessful in recovering the
remaining balance from those customers. Particularly with respect to our home equity loans, decreases in real estate values could adversely
affect the value of property used as collateral for our loans.

      Commercial Real Estate Loans. We originate commercial real estate loans secured primarily by office buildings, strip mall centers,
owner-occupied offices, condominiums, developed lots and land. Loans secured by commercial real estate totaled $23.4 million, or 13.9% of
our total loan portfolio, at March 31, 2010, and consisted of 21 loans outstanding with an average loan balance of approximately $1.1 million.
Virtually all of the commercial real estate loans that we originate are secured by properties located in Texas. We do not actively pursue
commercial lending opportunities in our Louisville, Kentucky and Irvine, California market areas, but will consider commercial business loan
requests from existing customers in these areas.

      Our commercial real estate loans are generally written for terms of up to five years with a 20 year amortization schedule. The rates are
generally tied to the prime interest rate as reported in The Wall Street Journal and generally have a specified floor. Many of our adjustable-rate
commercial real estate loans are not fully amortizing and therefore require a ―balloon‖ payment at maturity. We also originate three to five year
adjustable rate, fully amortizing commercial real estate loans. A portion of our commercial real estate loans are loans where we have provided
permanent financing for borrowers following the completion of the real estate construction for which we previously provided construction
financing.

      In underwriting commercial real estate loans, we generally lend up to 80% of the property’s appraised value and up to 65% of the
property’s appraised value if the property is unimproved land. We base our decisions to lend on the economic viability of the property and the
creditworthiness of the borrower. In evaluating a proposed commercial real estate loan, we emphasize the ratio of the property’s projected net
cash flow to the loan’s debt service requirement (generally requiring a minimum ratio of 125%), computed after deduction for a vacancy factor
and property expenses we deem appropriate. Personal guarantees are typically obtained from commercial borrowers. We require title insurance
insuring the priority of our lien, fire and extended coverage casualty insurance, and, if appropriate, flood insurance, in order to protect our
security interest in the underlying property.

      Commercial real estate loans generally carry higher interest rates and have shorter terms than one- to four-family residential mortgage
loans. Commercial real estate loans, however, entail significant additional credit risks compared to one- to four-family residential mortgage
loans, as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the
payment of loans secured by income-producing properties typically depends on the successful operation of the related real estate project and
thus may be subject to a greater extent to

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adverse conditions in the real estate market and in the general economy. At March 31, 2010, our largest commercial real estate loan had an
outstanding balance of $2.2 million, was secured by a licensed day care facility and the personal guaranty of the owner of this facility, and was
performing in accordance with its terms.

      Consumer Loans . We offer a variety of secured consumer loans, including new and used automobile loans, recreational vehicle loans,
and loans secured by certificates of deposits and other collateral, including marketable securities. We also offer unsecured consumer loans. We
offer our consumer loans primarily to customers in our market area surrounding our Plano headquarters as well as our market areas surrounding
our Louisville, Kentucky and Irvine, California branch offices. Most of our consumer loans are secured by automobiles. At March 31, 2010,
our consumer loan portfolio totaled $12.3 million, or 7.3% of our total loan portfolio, of which $ 8.9 million were automobile loans. All of our
automobile loans are direct; we do not make indirect automobile loans through dealers.

      Our secured consumer loans totaled $10.4 million, or 6.2%, of our total loan portfolio at March 31, 2010, and consisted principally of
auto loans. Additional secured consumer loans included recreational vehicle, motorcycle and boat loans. At March 31, 2010, our unsecured
consumer loans totaled $1.9 million, or 1.1% of our total loan portfolio. These loans have either a fixed rate of interest for a maximum term of
60 months, or are revolving lines of credit with an adjustable-rate of interest tied to the prime interest rate as reported in The Wall Street
Journal . At March 31, 2010, unfunded commitments on our unsecured lines of credit totaled $2.4 million, and the average outstanding balance
on total unsecured lines was approximately $2.0 million for the three months ended March 31, 2010.

      Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. In addition,
management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing
the number of customer relationships and providing cross-marketing opportunities.

      Consumer and other loans generally have greater risk compared to longer-term loans secured by improved, owner-occupied real estate,
particularly consumer loans that are secured by rapidly depreciable assets, such as automobiles. In these cases, any repossessed collateral for a
defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. As a result, consumer loan collections are
dependent on the borrower’s continuing financial stability and thus are more likely to be adversely affected by job loss, divorce, illness or
personal bankruptcy.

      Commercial Loans . We typically make various types of secured commercial business loans to customers in our Texas market areas for
the purpose of acquiring equipment and other general business purposes. The terms of these loans generally range from one year to a maximum
of five years. The loans are either negotiated on a fixed-rate basis or carry adjustable interest rates indexed to the prime interest rate as reported
in The Wall Street Journal and generally with specified floors . At March 31, 2010, we had 9 commercial business loans outstanding with an
aggregate balance of $1.1 million, or 0.7% of our total loans. At March 31, 2010, the average commercial business loan balance was
approximately $123,000.

      Loan Originations, Purchases, Sales, Participations and Servicing. Lending activities are conducted primarily by our loan personnel
operating at our main and branch office locations. All loans that we originate in each of our market areas are underwritten pursuant to our
standard policies and procedures. In addition, our one- to four-family residential mortgage loans generally incorporate Fannie Mae and/or
Freddie Mac underwriting guidelines. We originate both adjustable-rate and fixed-rate loans. Our ability to originate fixed- or adjustable-rate
loans is dependent upon the relative customer demand for such loans, which is affected by current market interest rates as well as anticipated
future market interest

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rates. Our loan origination and sales activity may be adversely affected by a rising interest rate environment that typically results in decreased
loan demand. Most of our commercial real estate and commercial loans are generated by our internal business development efforts and referrals
from professional contacts. Most of our originations of one- to four-family residential mortgage loans, consumer loans and home equity loans
are generated by existing customers, referrals from real estate brokers, residential home builders, walk-in business and from our internet
website, and with respect to our Texas market area, a small network of mortgage brokers.

      Additionally, we participate with several of the former credit union’s sponsor companies as a preferred lender in employee loan programs
and loan programs for executives who are being relocated throughout the United States through their employment with these companies.
Through these programs, we have the opportunity to provide loans on the primary residences of employees and of executives who are being
relocated by these companies, which has resulted in a portion of our residential real estate loan portfolio being collateralized by properties
outside of our Texas market area. Although our participation in these programs can result in our originating loans in locations that are not one
of our market areas, we underwrite these loans with the same standards as our in-market loans. The relocation programs have historically
included price protections to the relocating executive, which we believe provides additional protection to us, although the programs do not
provide us any direct insurance or protections on our loan to the executive.

      We decide whether to retain the loans that we originate or sell loans in the secondary market after evaluating current and projected market
interest rates, our interest rate risk objectives, our liquidity needs and other factors. We sold $30.0 million of one- to four-family residential
mortgage loans (primarily fixed-rate loans, with terms of 15 years or longer and occasionally a conforming adjustable-rate loan) during the year
ended December 31, 2009, and $5.8 million of such loans were sold during the three months ended March 31, 2010. We had $1.5 million in
loans held for sale at March 31, 2010. Generally we sell our residential mortgage loans on a servicing-released basis.

      Loan Approval Procedures and Authority . Our lending activities follow written, non-discriminatory underwriting standards and loan
origination procedures established by our board of directors. The loan approval process is intended to assess the borrower’s ability to repay the
loan and the value of the collateral that will secure the loan. To assess the borrower’s ability to repay, we review the borrower’s employment
and credit history and information on the historical and projected income and expenses of the borrower. We will also evaluate a guarantor when
a guarantee is provided as part of the loan.

      SharePlus Federal Bank’s policies and loan approval limits are established by our board of directors. Our Senior Vice President of
Commercial Lending may approve secured commercial loans up to $100,000 and unsecured commercial loans up to $25,000. Similarly, our
Senior Vice President of Retail Lending has authority to approve secured consumer loans up to $125,000 and unsecured consumer loans up to
$20,000. Consumer lending managers have authority to approve secured consumer loans up to $100,000 and unsecured consumer loans up to
$10,000. Aggregate lending relationships in amounts up to $750,000 for residential mortgage loans and in amounts up to $250,000 for
commercial loans may be approved by the President and Chief Executive Officer. All commercial loans that result in aggregate indebtedness of
the borrower of up to $500,000, and all residential loans of up to $1.0 million must be approved or ratified by a majority of the Officers’ Loan
Committee, consisting of our President and Chief Executive Officer, Chief Financial Officer, Senior Vice President of Retail Lending and
Senior Vice President of Commercial Lending. Commercial loans in excess of $500,000 and residential loans in excess of $1.0 million are
approved by the Credit Policy Committee consisting of four outside directors and our President and Chief Executive Officer. All approved
mortgage loans in excess of $417,000 and all commercial loans are reported to the board of directors upon approval.

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     We generally require appraisals by a rotating list of independent, licensed, third-party appraisers of all real property securing loans. All
appraisers are approved by the board of directors annually.

Non-performing and Problem Assets
       With respect to our residential mortgage loans and consumer loans, collection calls typically begin between the 10 th and 15 th day of
delinquency. By the time a loan is 30 days past due, there will have been two to three delinquency notices sent as well as a minimum of two
personal phone contact attempts from the assigned employee and/or an automated calling system. During each personal phone contact, the
borrower is required to provide updated information and is counseled on the terms of the loan and the importance of making payments on or
before the due date. Once a loan becomes 60 days delinquent, repossessions typically commence, while foreclosures typically begin after the
90 th day of delinquency. A summary report of all loans 30 days or more past due is provided monthly to our board of directors.

      With respect to our commercial real estate and commercial business lending, collection efforts are carried out directly by our commercial
loan officers. Commercial loan officers review past due accounts weekly and contact delinquent borrowers immediately. Past due notices are
typically sent to commercial real estate customers and commercial business customers at 15 days past due.

      Loans are usually placed on non-accrual status when the payment of principal and/or interest is 90 days or more past due. Loans are
placed on non-accrual status when it is determined collection of principal or interest is in doubt or if the collateral is in jeopardy. When loans
are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received. The
loans are typically returned to accrual status if unpaid principal and interest are repaid so that the loan is current.

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      Non-Performing Assets. The table below sets forth the amounts and categories of our non-performing assets and troubled debt
restructurings at the dates indicated.

                                                            At March 31,
                                                                2010                                      At December 31,
                                                                                  2009             2008              2007        2006          2005
                                                                                            (Dollars in thousands)
Non-accrual loans:
Mortgage loans:
    One- to four-family residential                         $      1,060      $     421         $     578        $ 2,839        $ 179      $      67
    Home equity                                                      —              —                 —              —            —              —
                                                                                          (1)
    Commercial real estate
                                                                   3,528          1,270               —                —           —             —
Consumer loans:
    Automobile and other vehicles                                      6              7                27               52          47           102
    Signature                                                         13             13                 5               21           3            28
    Other                                                            —              —                 —                —            11             6
Commercial loans                                                     —              —                 —                —           —             —
           Total non-accrual loans                          $      4,607      $ 1,711           $     610        $ 2,912        $ 240      $ 203
Loans delinquent 90 days or greater and still accruing:
Mortgage loans:
    One- to four-family residential                                  —              —                 —                —           —             —
    Home equity                                                      —              —                 —                —           —             —
    Commercial real estate                                           —              —                 —                —           —             —
Consumer loans:
    Automobile and other vehicles                                    —              —                 —                —           —             —
    Signature                                                        —              —                 —                —           —             —
    Other                                                            —              —                 —                —           —             —
Commercial loans                                                     —              —                 —                —           —             —
           Total loans delinquent 90 days or greater and
             still accruing                                 $        —        $     —           $     —          $     —        $ —        $ —
Troubled debt restructurings, not included in non-accrual
  loans                                                            1,646          1,717               860              189         100           212
           Total non-performing loans                       $      6,253      $ 3,428           $ 1,470          $ 3,101        $ 340      $ 415
Real estate owned and other foreclosed assets:
Mortgage loans:
     One- to four-family residential                                 —              —                 —                521         148           —
     Home equity                                                     —              —                 —                —           —             —
     Commercial real estate                                          —              —                 —                —           —             —
Consumer loans:
     Automobile and other vehicles                                   —              —                    8             —            49           —
     Signature                                                       —              —                 —                —           —             —
     Other                                                           —              —                 —                 10         —             —
Commercial loans                                                     —              —                 —                —           —             —
           Total real estate owned and other foreclosed
             assets                                         $        —        $     —           $        8       $     531      $ 197      $ —
Total non-performing assets                                 $      6,253      $ 3,428           $ 1,478          $ 3,632        $ 537      $ 415

Ratios:
     Non-performing loans to total loans                            3.71 %          1.99 %           0.89 %            2.26 %     0.24 %        0.31 %
     Non-performing assets to total assets                          2.75 %          1.65 %           0.77 %            2.17 %     0.30 %        0.23 %

(1)   Represents a loan in which SharePlus Federal Bank participates but is not the lead lender. At December 31, 2009, this loan was current
      but was deemed non-performing because the lead lender had categorized the loan as substandard, non-accrual.
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For the three months ended March 31, 2010 and for the year ended December 31, 2009, gross interest income that would have been recorded
had our non-accruing loans been current in accordance with their original terms was $78,000 and $31,000, respectively. Interest income
recognized on such loans for the three months ended March 31, 2010 and for the year ended December 31, 2009 was $2,000 and $23,000,
respectively.

      At March 31, 2010, our non-accrual loans totaled $4.6 million. The non-accrual loans consisted primarily of two loans, both of which are
purchased participations from a third-party lender. The principal balance of SharePlus Federal Bank’s participation amounts in these loans is
$3.6 million. The first loan has an outstanding balance of $2.6 million, of which SharePlus’ outstanding balance is $2.1 million. This loan is
secured by raw land in Carrollton, Texas and, at February 17, 2010 had a total appraised value of $2.0 million. At March 31, 2010, we had a
specific allowance for this loan of $604,000. The borrower has declared bankruptcy and the lead bank has entered into an agreement to sell the
note securing the loan to a third-party for $2.0 million which is expected to close in July, 2010. The second loan has an outstanding balance of
$19.5 million, of which SharePlus’ outstanding balance is $1.5 million. This loan is secured by a 240,000 square foot Class A office building in
Coppell, Texas. In 2009 the anchor tenant in the building vacated the property (an event that was expected at the time the loan was originated)
resulting in the building’s occupancy rate falling to 3% in May 2009 and the loan was placed on non-accrual during the third quarter of 2009.
The building is now approximately 75% leased and, it is expected, this loan will be removed from non-accrual status during the fourth quarter
of 2010 once the new tenants’ rental payments begin, following an initial free-rent period. We do not expect to recognize any loss on this loan.

      At March 31, 2010, we had a total of 19 loans that were not currently classified as nonaccrual, 90 days past due or troubled debt
restructurings, but where known information about possible credit problems of borrowers caused management to have serious concerns as to
the ability of the borrowers to comply with present loan repayment terms and that could result in disclosure as nonaccrual, 90 days past due or
troubled debt restructurings. Thirteen of these loans are consumer loans (9 automobile loans and 4 unsecured loans), with an aggregate loan
balance of $107,000, and were made to individuals who have declared personal bankruptcy. Five of these loans, with an aggregate balance of
$275,000, are collateralized by one- to four-family residential mortgages of borrowers who have, on occasion, been late with scheduled
payments. One of these loans is a commercial real estate loan collateralized by a building with a principal loan balance of $537,000.
Management believes that the Bank is adequately collateralized on this loan and has taken a specific reserve of $53,000; however, due to the
borrower’s financial situation, management believes the borrower may not make future scheduled repayments on the loan.

      Troubled Debt Restructurings. Troubled debt restructurings are defined under ASC 310-40 to include loans for which either a portion of
interest or principal has been forgiven, or for loans modified at interest rates or on terms materially less favorable than current market rates. We
periodically modify loans to extend the term or make other concessions to help a borrower stay current on their loan and to avoid foreclosure.
We generally do not forgive principal or interest on loans or modify the interest rates on loans to rates that are below market rates. At
December 31, 2009 we had $1.7 million of troubled debt restructurings related to 37 consumer loans totaling $264,000 and 8 residential loans
totaling $1.4 million.

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      Delinquent Loans. The following table sets forth certain information with respect to our loan portfolio delinquencies at the dates
indicated.

                                                                                             Loans Delinquent For                        Total
                                                                                       30-89 Days          90 Days and Over
                                                                                   Numbe                  Numbe                  Numbe
                                                                                     r        Amount         r         Amount      r         Amount
                                                                                                        (Dollars in thousands)
At March 31, 2010
Mortgage loans:
    One- to four-family residential                                                    11    $ 1,157         12     $ 1,060         23      $ 2,217
    Home equity                                                                         5        147        —           —            5          147
    Commercial real estate                                                              2      2,382        —           —            2        2,382
Consumer loans:
    Automobile and other vehicles                                                      10          99           1           6       11           105
    Signature                                                                           1           8           1          13        2            21
    Other                                                                               1           2       —             —          1             2
Commercial loans                                                                      —           —         —             —        —             —
           Total loans                                                                 30    $ 3,795          14    $ 1,079         44      $ 4,874

At December 31, 2009
Mortgage loans:
    One- to four-family residential                                                    11    $ 1,299         10     $     421       21      $ 1,720
    Home equity                                                                         1         34        —             —          1           34
    Commercial real estate                                                              1        317        —             —          1          317
Consumer loans:
    Automobile and other vehicles                                                      10          66           1           7       11            73
    Signature                                                                           3          10           1          13        4            23
    Other                                                                             —           —         —             —        —             —
Commercial loans                                                                      —           —         —             —        —             —
           Total loans                                                                 26    $ 1,726          12    $     441       38      $ 2,167

At December 31, 2008
Mortgage loans:
    One- to four-family residential                                                     9    $ 3,674            6   $     578       15      $ 4,252
    Home equity                                                                       —          —          —             —        —            —
    Commercial real estate                                                            —          —          —             —        —            —
Consumer loans:
    Automobile and other vehicles                                                      13         127           5          27       18           154
    Signature                                                                          14          31           1           5       15            36
    Other                                                                             —           —         —             —        —             —
Commercial loans                                                                      —           —         —             —        —             —
           Total loans                                                                 36    $ 3,832          12    $     610       48      $ 4,442

At December 31, 2007
Mortgage loans:
    One- to four-family residential                                                    11    $ 2,693            8   $ 2,839         19      $ 5,532
    Home equity                                                                         2        109        —           —            2          109
    Commercial real estate                                                            —          —          —           —          —            —
Consumer loans:
    Automobile and other vehicles                                                      34         314           4          52       38           366
    Signature                                                                          29          39           3          21       32            60
    Other                                                                               5          50       —             —          5            50
Commercial loans                                                                      —           —         —             —        —             —
           Total loans                                                                 81    $ 3,205          15    $ 2,912         96      $ 6,117
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At December 31, 2006
Mortgage loans:
    One- to four-family residential                                                               5    $    714       1    $ 179        6   $    893
    Home equity                                                                                   2          27     —        —          2         27
    Commercial real estate                                                                      —           —       —        —       —           —
Consumer loans:
    Automobile and other vehicles                                                                15          98       3       47      18         145
    Signature                                                                                    14          25       5        3      19          28
    Other                                                                                       —           —         1       11       1          11
Commercial loans                                                                                —           —       —        —       —           —
           Total loans                                                                           36    $    864      10    $ 240      46    $ 1,104

At December 31, 2005
Mortgage loans:
    One- to four-family residential                                                               5    $    969       2    $ 67         7   $ 1,036
    Home equity                                                                                 —           —       —       —        —          —
    Commercial real estate                                                                      —           —       —       —        —          —
Consumer loans:
    Automobile and other vehicles                                                                21         160       8      102      29         262
    Signature                                                                                    33          60      15       28      48          88
    Other                                                                                         7          49       2        6       9          55
Commercial loans                                                                                —           —       —        —       —           —
           Total loans                                                                           66    $ 1,238       27    $ 203      93    $ 1,441


      Total delinquent loans increased by $2.7 million to $4.9 million at March 31, 2010 from $2.2 million at December 31, 2009. The increase
in delinquent loans was due primarily to an increase of $2.1 million in commercial real estate loans delinquent 30 to 89 days, and an increase of
$497,000 in one- to four-family mortgage loans.

      Real Estate Owned and Foreclosed Assets . Real estate acquired by us as a result of foreclosure or by deed in lieu of foreclosure is
classified as real estate owned. When property is acquired it is recorded at the lower of cost or estimated fair market value at the date of
foreclosure, establishing a new cost basis. Estimated fair value generally represents the sale price a buyer would be willing to pay on the basis
of current market conditions, including normal terms from other financial institutions, less the estimated costs to sell the property. Holding
costs and declines in estimated fair market value result in charges to expense after acquisition. In addition, we periodically repossess certain
collateral, including automobiles and other titled vehicles, called other repossessed assets. At March 31, 2010, we had $0 in real estate owned
and other repossessed assets.

      Classification of Assets. Our policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that
are considered to be of lesser quality as substandard, doubtful, or loss assets. An asset is considered substandard if it is inadequately protected
by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets include those assets
characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all
of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or
liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Assets (or portions of
assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Assets that
do not expose us to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that
deserve our close attention, are required to be designated as special mention. As of March 31, 2010, we had $1.8 million of assets designated as
special mention.

      When we classify assets as either substandard or doubtful, we allocate a portion of the related general loss allowances to such assets as
we deem prudent. The allowance for loan losses is the amount estimated by management as necessary to absorb credit losses incurred in the
loan portfolio that are both

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probable and reasonably estimable at the balance sheet date. When we classify a problem asset as doubtful, we charge the asset off. For other
classified assets, we provide a specific reserve for that portion of the asset that is considered uncollectible. Our determination as to the
classification of our assets and the amount of our loss allowances are subject to review by our principal federal regulator, the Office of Thrift
Supervision, which can require that we establish additional loss allowances. We regularly review our asset portfolio to determine whether any
assets require classification in accordance with applicable regulations. On the basis of our review of our assets at March 31, 2010, classified
assets consisted of $13.0 million of substandard assets, $0 of doubtful assets and no loss assets.

      As of March 31, 2010, our largest substandard asset was a $2.1 million commercial real estate loan collateralized by 119 acres of raw
land located in Celina, Texas. The loan was originated in February 2008 to a developer who purchased the property for residential
development. The land was appraised at $4.4 million in early 2008 and the loan to cost value was 67% at the time the loan was originated. The
land was re-appraised in April 2010 for $2.6 million, and at that date no sales had occurred due to the general market downturn. The loan is
structured on a five-year term, with interest payable quarterly and a minimum 5% principal reduction, from sales or investor contribution, due
at the end of each of years 3 and 4. The loan has performed in accordance with its repayment terms. The first principal payment is due in
February 2011.

      We identified the loan as special mention in December 2009, recognizing the source of repayment through timely sale of the land had
been significantly extended. The loan was further classified to substandard in March 2010 as market conditions, in management’s opinion, have
not significantly improved.

Allowance for Loan Losses
      Analysis and Determination of the Allowance for Loan Losses . Our allowance for loan losses is the amount considered necessary to
reflect probable incurred losses in our loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis.
When additional allowances are necessary, a provision for loan losses is charged to earnings.

      Our methodology for assessing the appropriateness of the allowance for loan losses consists of two key elements: (1) specific allowances
for identified problem loans; and (2) a general valuation allowance on the remainder of the loan portfolio. Although we determine the amount
of each element of the allowance separately, the entire allowance for loan losses is available for the entire portfolio.

      Specific Allowances for Identified Problem Loans . We establish a specific allowance when loans are determined to be impaired. Loss is
measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral
adjusted for market conditions and selling expenses. Factors in identifying a specific problem loan include: (1) the strength of the customer’s
personal or business cash flows; (2) the availability of other sources of repayment; (3) the amount due or past due; (4) the type and value of
collateral; (5) the strength of our collateral position; (6) the estimated cost to sell the collateral; and (7) the borrower’s effort to cure the
delinquency. In addition, for loans secured by real estate, we consider the extent of any past due and unpaid property taxes applicable to the
property serving as collateral on the mortgage.

      General Valuation Allowance on the Remainder of the Loan Portfolio . We establish a general allowance for loans that are not
classified as substandard to recognize the inherent losses associated with lending activities, but which, unlike specific allowances, has not been
allocated to particular problem assets. This general valuation allowance is determined by segregating the loans by loan category and assigning
allowance percentages based on our historical loss experience, delinquency trends and

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management’s evaluation of the collectibility of the loan portfolio. The allowance may be adjusted for significant factors that, in management’s
judgment, affect the collectibility of the portfolio as of the evaluation date. These significant factors may include changes in lending policies
and procedures, changes in existing general economic and business conditions affecting our primary market area, credit quality trends,
collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio,
duration of the current business cycle and bank regulatory examination results. The applied loss factors are re-evaluated quarterly to ensure
their relevance in the current real estate environment. Although our policy allows for a general valuation allowance on certain smaller-balance,
homogenous pools of loans classified as substandard, we have historically evaluated every loan classified as substandard, regardless of size, for
impairment in establishing a specific allowance.

      On occasion, we originate single-family loans with loan-to-value ratios exceeding 90%. At March 31, 2010 and December 31, 2009 and
2008 these loans amounted to $4.8 million, $5.3 million and $6.9 million, respectively. These loans are reviewed quarterly by management and
reported to the Board.

      In addition, as an integral part of their examination process, the Office of Thrift Supervision will periodically review our allowance for
loan losses. Such agency may require that we recognize additions to the allowance based on their judgments of information available to them at
the time of their examination.

      The increase in substandard, non-performing, and impaired loans has affected the level of the allowance for loan losses at March 31,
2010. The allowance for loan losses increased $1.1 million, or 112.1%, to $2.0 million at March 31, 2010 from $940,000 at December 31,
2009. Substandard loans increased to $13.0 million at March 31, 2010 from $6.7 million at December 31, 2009. Approximately 95.6% and
91.7% of our non-performing loans were collateralized by real estate at March 31, 2010 and December 31, 2009, respectively. Non-performing
loans, including troubled debt restructurings not included in non-accrual loans, increased to $6.3 million at March 31, 2010 from $3.4 million at
December 31, 2009 resulting primarily from a $2.3 million increase in non-performing commercial real estate loans, a decrease in troubled debt
restructuring of $71,000 and a $639,000 increase in non-performing one- to four-family residential mortgage loans. Non-performing loans are
evaluated to determine impairment. Loans that are found to be impaired are individually assessed and a specific valuation allowance is applied.
Included in the substandard loan total at March 31, 2010 were impaired loans totaling $7.5 million. Impaired loans with specific valuation
allowances were $3.2 million at March 31, 2010, and the related specific valuation allowance for loan losses was $870,000. Impaired loans
without specific valuation allowances were $4.3 million at March 31, 2010.

      Appraisals are performed by a rotating list of independent, certified appraisers to obtain fair values on non-homogenous loans secured by
real estate. The appraisals are generally obtained when market conditions change, annually for criticized loans, and at the time a loan becomes
impaired.

      We periodically evaluate the carrying value of loans and the allowance is adjusted accordingly. While we use the best information
available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the information
used in making the evaluations.

      There were no changes in our nonaccrual or charge-off policies during the quarter ended March 31, 2010 or 2009. The accrual of interest
on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in the process of collection. Loans are
placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful.

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      All interest accrued but not collected for loans, including troubled debt restructurings, that are placed on nonaccrual status or charged off
is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for
return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and
future payments are reasonably assured.

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      The following table sets forth activity in our allowance for loan losses for the periods indicated.

                                                   At or For the
                                                Three Months Ended
                                                     March 31,                                     At or For the Years Ended December 31,
                                                2010             2009             2009             2008              2007             2006           2005
                                                                                         (Dollars in thousands)
Balance at beginning of period              $      940       $     480       $      480        $     380       $       785        $      531     $      465
Charge-offs:
Mortgage loans:
    One- to four-family residential                 19              18               57               99             1,005               186             38
    Home equity                                    —               —                —                —                 —                   6              5
    Commercial real estate                         —               —                —                —                 —                 —              —
Consumer loans:
    Automobile and other vehicles                  —                39              116               23                27                23             45
    Signature                                       10              15               38               85                59                45            148
    Other                                            3              14               34               98                69               —              —
Commercial loans                                   —               —                —                —                 —                 —              —
         Total charge-offs                  $       32       $          86   $      245        $     305       $     1,160        $      260     $      236
Recoveries:
Mortgage loans:
    One- to four-family residential                —               —                —                —                 —                 —              —
    Home equity                                    —               —                —                —                 —                 —              —
    Commercial real estate                         —               —                —                —                 —                 —              —
Consumer loans:
    Automobile and other vehicles                  —                    1             6                3               —                 —               8
    Signature                                         6                 3            12               11                   6              22            —
    Other                                          —               —                —                —                 —                 —               9
Commercial loans                                   —               —                —                —                 —                 —              —
          Total recoveries                  $        6       $       4       $       18        $      14       $         6        $       22     $       17
Net (charge-offs) recoveries                       (26 )           (82 )           (227 )           (291 )          (1,154 )            (238 )         (219 )
Provision for loan losses                        1,080             136              687              391               749               492            285
Balance at end of period                    $ 1,994          $     534       $      940        $     480       $       380        $      785     $      531

Ratios:
Net charge-offs to average loans
  outstanding (annualized)                        0.06 %          0.20 %            0.14 %          0.20 %            0.84 %            0.18 %         0.15 %
Allowance for loan losses to
  non-performing loans at end of
  period                                         31.89 %         41.27 %          27.42 %          32.65 %           12.25 %          230.88 %       127.95 %
Allowance for loan losses to total loans
  at end of period                                1.18 %          0.32 %            0.55 %          0.29 %            0.28 %            0.55 %         0.39 %

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       Allocation of Allowance for Loan Losses. The following table sets forth the allowance for loan losses allocated by loan category, the
total loan balances by category (including loans held for sale), and the percent of loans in each category to total loans at the dates indicated.
The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not
restrict the use of the allowance to absorb losses in other categories.

                                              At March 31, 2010                                                   At December 31,
                                                                                                  2009                                            2008
                                                                Percent of                                  Percent of                                     Percent of
                                                              Loans in Each                               Loans in Each                                  Loans in Each
                                      Allowance for            Category to          Allowance for          Category to            Allowance for           Category to
                                      Loan Losses              Total Loans           Loan Losses           Total Loans             Loan Losses            Total Loans
                                                                                        (Dollars in thousands)
Mortgage loans:
    One- to four-family
      residential                 $             731                    73.0 %   $             455                  73.0 %     $             220                   70.9 %
    Home equity                                  52                     5.2                    33                   5.2                      17                    5.5
    Commercial real estate                    1,016                    13.8                   293                  13.1                      61                   10.6
Consumer loans:
    Automobile and other
      vehicles                                   106                    5.3                   107                   5.8                     135                    9.4
    Signature                                     24                    1.1                    23                   1.2                      24                    1.6
    Other                                         18                    0.9                    17                   0.9                      19                    1.3
Commercial loans                                  47                    0.7                    12                   0.8                       4                    0.7
           Total                  $           1,994                  100.0 %    $             940                100.0 %      $             480                 100.0 %


                                                                                          At December 31,
                                                       2007                                        2006                                           2005
                                                                Percent of                                  Percent of                                     Percent of
                                                              Loans in Each                               Loans in Each                                  Loans in Each
                                       Allowance for           Category to          Allowance for          Category to            Allowance for           Category to
                                        Loan Losses            Total Loans           Loan Losses           Total Loans             Loan Losses            Total Loans
                                                                                        (Dollars in thousands)
Mortgage loans:
    One- to four-family
      residential                  $             147                   69.7 %   $             473                  68.2 %     $             116                   62.7 %
    Home equity                                   12                    5.7                    13                   6.1                       9                    4.9
    Commercial real estate                        20                    4.0                   —                     —                       —                      —
Consumer loans:
    Automobile and other
      vehicles                                   158                   16.5                   249                  21.4                     330                   26.4
    Signature                                     27                    1.9                    28                   2.4                      48                    3.8
    Other                                         15                    1.6                    22                   1.9                      28                    2.2
Commercial loans                                   1                    0.6                   —                     —                       —                      —
           Total                   $             380                  100.0 %   $             785                100.0 %      $             531                 100.0 %


      The allowance for loan losses increased $1.1 million, or 112.1%, to $2.0 million at March 31, 2010 from $940,000 at December 31, 2009.
The increase was primarily due to increases in the allowance for loan losses attributable to commercial real estate loans, one- to four-family
residential mortgage loans and commercial loans. At March 31, 2010, the allowance for loan losses represented 1.18% of total loans compared
to 0.55% of total loans at December 31, 2009. Included in the allowance for loan losses at March 31, 2010 were specific allowances for loan
losses of $870,000 related to 13 impaired loans with balances totaling $3.2 million. The allowance for loan losses at December 31, 2009
included a $168,000 specific allowance for loan losses on 8 impaired loans with a balance of $543,000.

       The significant changes in the amount of the allowance for loan losses during the first three months of 2010 related to: (i) a $723,000
increase in the allowance for loan losses attributable to commercial real estate loans reflecting management’s assessment of one impaired loan
totaling $2.1 million; and (ii) a $276,000 increase in the allowance for loan losses attributable to one- to four-family residential mortgage and
consumer loans reflecting management’s assessment of 12 impaired loans with

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balances totaling $1.1 million. Management also considered the deterioration in the local economy and rising unemployment as well as the
higher risk profile of these loans when compared to one- to four- family residential mortgage loans when evaluating the adequacy of the
allowance for loan losses.

      The allowance for loan losses increased $460,000, or 95.8%, to $940,000 at December 31, 2009 from $480,000 at December 31, 2008.
The increase was primarily related to: (i) a $232,000 increase in the allowance for loan losses attributable to commercial real estate loans
reflecting the deterioration in the local economy; and (ii) a $235,000 increase in the allowance for loan losses attributable to one- to four-family
residential mortgage loans reflecting management’s assessment of eight impaired loans with balances totaling $543,000. At December 31,
2009, the allowance for loan losses represented 0.55% of total loans compared to 0.29% of total loans at December 31, 2008.

Investments
      The asset/liability management committee (―ALCO Committee‖), consisting of two outside directors, our President and Chief Executive
Officer, our Chief Financial Officer, the Vice President of Operations and the Controller, has primary responsibility for establishing our
investment policy and overseeing its implementation, subject to oversight by our entire board of directors. Authority to make investments under
approved guidelines is delegated to the Investment Committee, comprised of our President and Chief Executive Officer and our Chief Financial
Officer. All investment transactions are reported to the board of directors for ratification at the next regular board meeting.

      The investment policy is reviewed at least annually by the full board of directors. This policy dictates that investment decisions be made
based on minimizing exposure to credit risk, liquidity requirements, potential returns and consistency with our interest rate risk management
strategy.

      Our current investment policy permits us to invest in any legally permissible investment security, including mortgage-backed securities,
including pass-through securities, insured and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae as well as collateralized mortgage
obligations (―CMOs‖) issued or backed by securities issued by Government entities or Government-sponsored enterprises and private issuers,
as well as investment grade bank-qualified municipal securities and investment grade corporate debt securities.

     Our current investment policy does not permit speculative trading, repurchase agreement or reverse repurchase agreements, short sales,
options, mortgage derivative products and other financial derivative products or purchases of high-risk mortgage securities. As a federal
savings bank, SharePlus Federal Bank is generally not permitted to invest in equity securities, although this general restriction will not apply to
SP Bancorp, Inc., which may acquire up to 5% of voting securities of any company without regulatory approval.

      ASC 320-10, ―Investment – Debt and Equity Securities‖ requires that, at the time of purchase, we designate a security as held to maturity,
available-for-sale, or trading, depending on our ability and intent. Securities available for sale are reported at fair value, while securities held to
maturity are reported at amortized cost. We do not maintain a trading portfolio.

      Mortgage-Backed Securities. We invest in mortgage-backed securities insured or guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae
or the Small Business Association (―SBA‖). We invest in mortgage-backed securities to achieve positive interest rate spreads with minimal
administrative expense, and to lower our credit risk as a result of the guarantees provided by Freddie Mac, Fannie Mae, Ginnie Mae or SBA.

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      Mortgage-backed securities are created by pooling mortgages and issuing a security with an interest rate that is less than the interest rate
on the underlying mortgages. Mortgage-backed securities typically represent a participation interest in a pool of single-family or multi-family
mortgages, although we invest primarily in mortgage-backed securities backed by one- to four-family mortgages. The issuers of such securities
pool and resell the participation interests in the form of securities to investors such as SharePlus Federal Bank. Some securities pools are
guaranteed as to payment of principal and interest to investors. Mortgage-backed securities generally yield less than the loans that underlie such
securities because of the cost of payment guarantees and credit enhancements. However, mortgage-backed securities are more liquid than
individual mortgage loans since generally there is an active trading market for such securities. In addition, mortgage-backed securities may be
used to collateralize our specific liabilities and obligations. Finally, mortgage-backed securities are assigned lower risk weightings for purposes
of calculating our risk-based capital ratio.

      Investments in mortgage-backed securities involve a risk that actual payments will be greater or less than the prepayment rate estimated
at the time of purchase, which may require adjustments to the amortization of any premium or acceleration of any discount relating to such
interests, thereby affecting the net yield on our securities. We periodically review current prepayment speeds to determine whether prepayment
estimates require modification that could cause amortization or accretion adjustments.

      CMOs are debt securities issued by a special-purpose entity that aggregates pools of mortgages and mortgage-backed securities and
creates different classes of securities with varying maturities and amortization schedules, as well as a residual interest, with each class
possessing different risk characteristics. The cash flows from the underlying collateral are generally divided into ―tranches‖ or classes that have
descending priorities with respect to the distribution of principal and interest cash flows, while cash flows on pass-through mortgage-backed
securities are distributed pro rata to all security holders.

      All of the mortgage-backed securities and CMOs owned by SharePlus Federal Bank are guaranteed by the U.S. Government or agencies
thereof or by government sponsored enterprises.

      Municipal Obligations. We invest in state, county and school district municipal bonds, both general obligation and revenue bonds, with
maturities of up to 20 years. Our policy allows us to purchase such securities after the credit-worthiness of the issuer is established. No more
than 15% of our capital can be invested in obligations of any one municipality or other state or local government.

      Agency Securities. While United States Government and federal agency securities generally provide lower yields than other investments
in our securities investment portfolio, we maintain these investments, to the extent appropriate, for liquidity purposes and as collateral for
borrowings.

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      Investment Securities Portfolio. The following table sets forth the composition of our investment securities portfolio at the dates
indicated.

                                            At March 31, 2010                                                       At December 31,
                                                                                      2009                                 2008                             2007
                                        Amortized                        Amortized                           Amortized                          Amortized
                                          Cost          Fair Value         Cost              Fair Value        Cost               Fair Value      Cost             Fair Value
                                                                                                (In thousands)
Securities held to maturity:
    Agencies                            $       —       $       —        $       —        $         —       $          —      $          —      $    —         $          —
    Municipal securities                        —               —                —                  —                  —                 —           —                    —
    Collateralized mortgage
        obligations                             —               —                —                  —                  —                 —          2,213              2,191
    Mortgage-backed securities                  —               —                —                  —                  —                 —          5,819              5,777
           Total securities held to
             maturity                   $       —       $       —        $       —        $         —       $          —      $          —      $   8,032      $       7,968


                                                At March 31, 2010                                                    At December 31,
                                                                                         2009                               2008                            2007
                                            Amortized                        Amortized                         Amortized                        Amortized
                                              Cost          Fair Value         Cost             Fair Value       Cost              Fair Value     Cost             Fair Value
                                                                                                  (In thousands)
Securities available for sale:
    Agencies                                $   2,499       $    2,495       $   2,499        $     2,457       $       —         $       —     $     —        $          —
    Municipal securities                        1,368            1,409           1,370              1,362               482               486         487                 497
    Collateralized mortgage
        obligations                             1,569            1,595           1,820              1,851             2,221             2,237         730                731
    Mortgage-backed securities                  7,598            7,782           7,667              7,822             5,200             5,325       5,276              5,214
           Total securities available
             for sale                       $ 13,034        $   13,281       $ 13,356         $    13,492       $     7,903       $     8,048   $   6,493      $       6,442


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      Portfolio Maturities and Yields. The composition and maturities of the investment securities portfolio at March 31, 2010 are summarized
in the following table. At such date, all of our securities were held as available-for-sale. Maturities are based on the final contractual payment
dates, and do not reflect the impact of prepayments or early redemptions that may occur. State and municipal securities yields have not been
adjusted to a tax-equivalent basis.

                                                                                 More than Five
                                                        More than One Year      Years through Ten
                                  One Year or Less      through Five Years            Years               More than Ten Years                Total Securities
                                            Weighted                Weighted                 Weighted                 Weighted                                  Weighted
                                 Amortized   Average   Amortized     Average   Amortized     Average      Amortized   Average    Amortized                      Average
                                   Cost        Yield      Cost        Yield      Cost          Yield        Cost        Yield      Cost          Fair Value      Yield
                                                                                 (Dollars in thousands)
Securities available for sale:
    Agencies                     $    —         — % $        —          — % $        499        4.03 % $      2,000      3.24 % $    2,499 $           2,495       3.40 %
    Municipal securities              —         —            149       3.92          774        3.59            445      4.40        1,368             1,409       3.90
    Collateralized mortgage
        obligations                   —         —            —          —            —           —            1,569      4.05        1,569             1,595       4.25
    Mortgage-backed
        securities                    —         —            —          —           2,954       2.21          4,644      5.10        7,598             7,782       3.99

          Total securities
            available for sale $      —         — % $        149       3.92 % $     4,227       2.68 % $      8,658      4.47 % $ 13,034 $           13,281        3.89 %


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Sources of Funds
      General. Deposits traditionally have been our primary source of funds for our lending and investment activities. We also borrow,
primarily from the Federal Home Loan Bank of Dallas, to supplement cash flow needs, to lengthen the maturities of liabilities for interest rate
risk management purposes and to manage our cost of funds. Our additional sources of funds are the proceeds of loan sales, scheduled loan
payments, maturing investments, loan prepayments, Federal Home Loan Bank of Dallas advances, retained earnings and income on other
earning assets.

      Deposits. We generate deposits primarily from the areas in which our branch offices are located. We rely on our competitive pricing,
convenient locations and customer service to attract and retain deposits. We offer a variety of deposit accounts with a range of interest rates and
terms. Our deposit accounts consist of savings accounts, demand deposit accounts, money market accounts and certificates of deposit. At
March 31, 2010, we had $807,000 in brokered deposits. All of our brokered deposits are through the Certificate of Deposit Account Registry
Service (―CDARS‖) network. When a customer makes a deposit and requests the full protection of FDIC insurance, but where such deposit
exceeds applicable limits, we use the CDARS network to place the funds into certificates of deposit issued by banks in the network so that the
full amount of the deposit is insured by the FDIC. The CDARS network matching system allows network members to exchange funds for a fee.
This exchange occurs on a dollar-for-dollar basis, so that the equivalent of the original deposit comes back to us.

     Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis. Deposit rates and terms are based
primarily on current operating strategies and market interest rates, liquidity requirements, interest rates paid by competitors and our deposit
growth goals.

      At March 31, 2010, we had a total of $60.1 million in certificates of deposit, of which $36.3 million had remaining maturities of one year
or less. Based on historical experience and our current pricing strategy, we believe we will retain a large portion of these accounts upon
maturity.

      The following tables set forth the distribution of our average total deposit accounts, by account type, for the periods indicated.

                                                                      For the Three Months Ended                            For the Year Ended
                                                                             March 31, 2010                                 December 31, 2009
                                                                                               Weighted                                          Weighted
                                                                                                 Average                                         Average
                                                                  Balance        Percent          Rate              Balance        Percent        Rate
                                                                                                (Dollars in thousands)
Deposit type:
Non-interest bearing demand                                   $      4,760          2.67 %           — %        $     4,222          2.53 %          — %
Interest-bearing demand deposits                                    50,737         28.47            0.30             45,944         27.51           0.38
Money market deposits                                               32,404         18.18            0.90             27,788         16.64           1.24
Savings                                                             32,281         18.11            0.25             32,140         19.25           0.26
Certificates of deposit                                             58,032         32.57            2.19             56,906         34.07           2.78
     Total deposits                                           $ 178,214          100.00 %           1.01 %      $ 167,000         100.00 %          1.31 %


                                                                                           For the Years Ended December 31,
                                                                                 2008                                             2007
                                                                                                Weighted                                         Weighted
                                                                                                 Average                                         Average
                                                                  Balance        Percent          Rate              Balance       Percent         Rate
                                                                                                (Dollars in thousands)
Deposit type:
Non-interest bearing demand                                   $      3,093          2.13 %           — %        $     1,706          1.18 %          — %
Interest-bearing demand deposits                                    42,345         29.14            0.60 %           42,624         29.53           0.81 %
Money market deposits                                               27,290         18.78            2.43             28,378         19.66           3.77 %
Savings                                                             31,658         21.79            0.28             32,891         22.79           0.36 %
Certificates of deposit                                             40,934         28.16            3.84             38,741         26.84           4.60 %
     Total deposits                                           $ 145,320          100.00 %           1.77 %      $ 144,340         100.00 %          2.30 %


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     As of March 31, 2010, the aggregate amount of outstanding certificates of deposit, including our individual retirement accounts, in
amounts greater than or equal to $100,000 was approximately $27.8 million. The following table sets forth the maturity of those certificates as
of March 31, 2010.

                                                                                                                            At
                                                                                                                        March 31, 2
                                                                                                                           010
                                                                                                                            (In
                                                                                                                        thousands)
                        Three months or less                                                                            $       7,478
                        Over three months through six months                                                                    4,505
                        Over six months through one year                                                                        6,623
                        Over one year to three years                                                                            7,957
                        Over three years                                                                                        1,228
                        Total                                                                                           $      27,791


      The following table sets forth certificates of deposit classified by interest rate as of the dates indicated.

                                                                                          At March
                                                                                              31,
                                                                                             2010                       At December 31,
                                                                                                             2009              2008               2007
                                                                                                                (In thousands)
      INTEREST RATE:
          Less than 2.00%                                                                $ 30,981        $ 24,765           $      —          $      —
          2.00%-2.99%                                                                      21,652          21,251               18,275                48
          3.00%-3.99%                                                                       5,843           9,724               12,821             3,871
          4.00%-4.99%                                                                       1,584           2,595               10,710            27,574
          5.00% and above                                                                     —               —                    525             6,832
             Total                                                                       $ 60,060        $ 58,335           $ 42,331          $ 38,325


      The following table sets forth, by interest rate ranges, information concerning our certificates of deposit.

                                                                                                 At March 31, 2010
                                                                                                Period to Maturity
                                                              Less Than or        More Than   More Than
                                                                Equal to           One to        Two to          More Than                        Percent of
                                                               One Year           Two Years   Three Years        Three Years          Total         Total
                                                                                               (Dollars in thousands)
Interest Rate Range:
     Less than 2.00%                                         $      23,452        $   7,397   $         81    $          50      $ 30,981                51.58 %
     2.00% to 2.99%                                                 13,651            5,284          1,623            1,095        21,652                36.05 %
     3.00% to 3.99%                                                  2,853              810            486            1,694         5,843                 9.73 %
     4.00% to 4.99%                                                  1,036              462             80                6         1,584                 2.64 %
     5.00% and above                                                   —                —              —                —             —                    — %
     Total                                                   $      40,992        $ 13,953    $      2,270    $       2,845      $ 60,060            100.00 %


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      Borrowings. Our borrowings primarily consist of advances from the Federal Home Loan Bank of Dallas. At March 31, 2010, we had
access to additional Federal Home Loan Bank advances of up to $35.4 million with the purchase of additional FHLB stock. The following table
sets forth information concerning balances and interest rates on our borrowings at the dates and for the periods indicated.

                                                                   At or For the Three Months                           At or For the Years Ended
                                                                        Ended March 31,                                       December 31,
                                                                    2010                 2009                   2009                2008              2007
                                                                                                  (Dollars in thousands)
                                                                               (1)
Balance at end of period
                                                               $    15,998           $   21,023            $ 15,995            $ 30,534             $ 8,509
Average balance during period                                  $     31,769          $   27,823            $ 24,279            $ 13,791             $ 9,564
Maximum outstanding at any month end                           $     15,998          $   34,202            $ 34,202            $ 30,534             $ 19,786
Weighted average interest rate at end of period                        2.33 %              3.34 %              2.34 %              2.56 %               4.58 %
Average interest rate during period                                    1.49 %              2.76 %              2.34 %              3.53 %               4.76 %

(1)
      Includes $5 of advances from the Federal Reserve Bank of Dallas.

Properties
     We operate from our main office in Plano, Texas, and from our four branches located in the Dallas/Fort Worth Metroplex area and two
branches in Louisville, Kentucky and one branch in Irvine, California. Six of our eight branches are located in corporate facilities of our former
sponsor companies. The net book value of our premises, land and equipment was $4.8 million at March 31, 2010. The following tables set forth
information with respect to our banking offices, including the expiration date of leases with respect to leased facilities.

                                                                                                                          Year Acquired
Address                                                                                         Leased or Owned             or Leased               Expires
Main Office:
5224 W. Plano Parkway
Plano, TX 75093                                                                                         Owned
Branch Offices:
2501 Oak Lawn Ave
Dallas, Texas 75219                                                                                      Leased                 04/2006             03/2017
7701 Legacy Drive
Plano, Texas 75024                                                                                       Leased                 12/2004             12/2010 **
5600 Headquarters Drive
Plano, Texas 75024                                                                                       Leased                 12/2004             12/2010 **
14841 North Dallas Parkway *
Dallas, Texas 75254                                                                                      Leased                 01/2005             12/2010
5200 Commerce Crossings
Louisville, Kentucky 40229                                                                               Leased                 01/2005             05/2011
1900 Colonel Sanders Lane
Louisville, Kentucky 40213                                                                               Leased                 01/2005             05/2011
1 Glen Bell Way
Irvine, California 92618                                                                                 Leased                 01/2005             01/2015

*     Located within a corporate office of Pizza Hut, Inc. which, it is expected, is re-locating from Dallas to Plano during the first quarter of
      2011. Upon the relocation, we expect to transition this branch from a full-service office to an administrative office, including an ATM
      and limited on-site services available.
**    Leases renew annually.

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Subsidiary Activities
     Upon completion of the conversion, SharePlus Federal Bank will become the wholly owned subsidiary of SP Bancorp, Inc. SharePlus
Federal Bank has no subsidiaries.

Legal Proceedings
     At March 31, 2010, we were not involved in any legal proceedings, the outcome of which we believe would be material to our financial
condition or results of operations.

Expense and Tax Allocation
     SharePlus Federal Bank will enter into an agreement with SP Bancorp, Inc. to provide it with certain administrative support services,
whereby SharePlus Federal Bank will be compensated at not less than the fair market value of the services provided. In addition, SharePlus
Federal Bank and SP Bancorp, Inc. will enter into an agreement to establish a method for allocating and for reimbursing the payment of their
consolidated tax liability.

Personnel
     As of March 31, 2010, we had 59 full-time employees and 2 part-time employees. Our employees are not represented by any collective
bargaining group. Management believes that we have a good working relationship with our employees.

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                                                     SUPERVISION AND REGULATION

General
       SharePlus Federal Bank is supervised and examined by the Office of Thrift Supervision and is subject to examination by the Federal
Deposit Insurance Corporation. This regulation and supervision establishes a comprehensive framework of activities in which an institution
may engage and is intended primarily for the protection of the Federal Deposit Insurance Corporation’s deposit insurance funds and depositors,
and not for the protection of stockholders. Under this system of federal regulation, financial institutions are periodically examined to ensure
that they satisfy applicable standards with respect to their capital adequacy, assets, management, earnings, liquidity and sensitivity to market
interest rates. SharePlus Federal Bank also is a member of and owns stock in the Federal Home Loan Bank of Dallas, which is one of the
twelve regional banks in the Federal Home Loan Bank System. SharePlus Federal Bank also is regulated to a lesser extent by the Board of
Governors of the Federal Reserve System, or Federal Reserve Board, which governs reserves to be maintained against deposits and other
matters. The Office of Thrift Supervision examines SharePlus Federal Bank and prepares reports for the consideration of its board of directors
on any operating deficiencies. SharePlus Federal Bank’s relationship with its depositors and borrowers also is regulated to a great extent by
federal law and, to a much lesser extent, state law, especially in matters concerning the ownership of deposit accounts and the form and content
of SharePlus Federal Bank’s loan documents.

    Any change in these laws or regulations, whether by the Federal Deposit Insurance Corporation, the Office of Thrift Supervision or
Congress, could have a material adverse impact on SP Bancorp, Inc., SharePlus Federal Bank and their operations.

      As a savings and loan holding company following the conversion, SP Bancorp, Inc. will be required to file certain reports with, will be
subject to examination by, and otherwise must comply with the rules and regulations of the Office of Thrift Supervision. SP Bancorp, Inc. will
also be subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

      Certain of the regulatory requirements that are or will be applicable to SharePlus Federal Bank and SP Bancorp, Inc. are described below.
This description of statutes and regulations is not intended to be a complete description of such statutes and regulations and their effects on
SharePlus Federal Bank and SP Bancorp, Inc., and is qualified in its entirety by reference to the actual statutes and regulations. A description of
the Office of Thrift Supervision’s Acquisition of Control regulations may be found at ―Restrictions on Acquisition of SP Bancorp,
Inc.—Change in Control Regulations.‖

Proposed Legislation
      Legislation has been introduced in Congress that would implement significant changes to the current bank regulatory structure. The most
recent bill passed by the U.S. Senate would eliminate our current primary federal regulator, the Office of Thrift Supervision, and require
SharePlus Federal Bank to be regulated by the Office of the Comptroller of the Currency (the primary federal regulator for national banks). The
Senate bill also provides that the Board of Governors of the Federal Reserve System would be responsible for supervising and regulating
savings and loan holding companies like SP Bancorp, Inc., in addition to bank holding companies which it currently regulates. If the Federal
Reserve Board’s current regulations applied to savings and loan holding companies like SP Bancorp, Inc., SP Bancorp, Inc. would become
subject to bank holding company capital requirements to which it is not currently subject, unless the final legislation exempts smaller bank
holding companies from such capital requirements. These capital requirements are substantially similar to the capital requirements currently
applicable to SharePlus Federal Bank, as described in ―Supervision and Regulation—Federal Banking Regulation—Capital Requirements.‖
The Senate bill also requires the bank regulators to set minimum

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capital levels for holding companies that are comparable to those required for the insured depository subsidiaries, but the components of Tier 1
capital would be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. This
would effectively eliminate the ability of bank holding companies to include trust preferred securities or subordinated debt as Tier 1 capital.

Federal Banking Regulation
      Business Activities. A federal savings bank derives its lending and investment powers from the Home Owners’ Loan Act, as amended,
and the regulations of the Office of Thrift Supervision. Under these laws and regulations, SharePlus Federal Bank may invest in mortgage loans
secured by residential and commercial real estate, commercial business and consumer loans, certain types of debt securities and certain other
assets, subject to applicable limits. SharePlus Federal Bank also may establish subsidiaries that may engage in activities not otherwise
permissible for SharePlus Federal Bank, including real estate investment and securities and insurance brokerage.

      Capital Requirements. Office of Thrift Supervision regulations require savings banks to meet three minimum capital standards: a 1.5%
tangible capital ratio, a 4% leverage ratio (3% for savings banks receiving the highest rating on the CAMELS rating system), and an 8%
risk-based capital ratio.

      The risk-based capital standard for savings banks requires the maintenance of Tier 1 (core) and total capital (which is defined as core
capital and supplementary capital) to risk-weighted assets of at least 4% and 8%, respectively. In determining the amount of risk-weighted
assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight factor of 0% to 200%, assigned by the Office of
Thrift Supervision, based on the risks believed inherent in the type of asset. Core capital is defined as common stockholders’ equity (including
retained earnings), certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated
subsidiaries, less intangibles other than certain mortgage servicing rights and credit card relationships. The components of supplementary
capital include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and
intermediate preferred stock, the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and up to 45% of
net unrealized gains on available-for-sale equity securities with readily determinable fair market values. Overall, the amount of supplementary
capital included as part of total capital cannot exceed 100% of core capital. Additionally, a savings bank that retains credit risk in connection
with an asset sale may be required to maintain additional regulatory capital because of the purchaser’s recourse against the savings bank. In
assessing an institution’s capital adequacy, the Office of Thrift Supervision takes into consideration not only these numeric factors but
qualitative factors as well, and has the authority to establish higher capital requirements for individual associations where necessary.

     At March 31, 2010, SharePlus Federal Bank’s capital exceeded all applicable requirements. See ―Historical and Pro Forma Regulatory
Capital Compliance.‖

      Loans-to-One Borrower. Generally, a federal savings bank may not make a loan or extend credit to a single or related group of borrowers
in excess of 15% of unimpaired capital and surplus. An additional amount may be loaned, equal to 10% of unimpaired capital and surplus, if
the loan is secured by readily marketable collateral, which generally does not include real estate. As of March 31, 2010, SharePlus Federal
Bank’s largest lending relationship with a single or related group of borrowers totaled $2.4 million, which represented 13.2% of unimpaired
capital and surplus. Therefore, SharePlus Federal Bank was in compliance with the loans-to-one borrower limitations.

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      Qualified Thrift Lender Test. As a federal savings bank, SharePlus Federal Bank must satisfy the qualified thrift lender, or ―QTL,‖ test.
Under the QTL test, SharePlus Federal Bank must maintain at least 65% of its ―portfolio assets‖ in ―qualified thrift investments‖ (primarily
residential mortgages and related investments, including mortgage-backed securities) in at least nine months of the most recent 12-month
period. ―Portfolio assets‖ generally means total assets of a savings bank, less the sum of specified liquid assets up to 20% of total assets,
goodwill and other intangible assets, and the value of property used in the conduct of the savings bank’s business.

      SharePlus Federal Bank also may satisfy the QTL test by qualifying as a ―domestic building and loan association‖ as defined in the
Internal Revenue Code.

       A savings bank that fails the qualified thrift lender test must either convert to a commercial bank charter or operate under specified
restrictions set forth in the Home Owners’ Loan Act. At March 31, 2010, SharePlus Federal Bank maintained approximately 80% of its
portfolio assets in qualified thrift investments and, therefore, satisfied the QTL test.

      Capital Distributions. Office of Thrift Supervision regulations govern capital distributions by a federal savings bank, which include cash
dividends, stock repurchases and other transactions charged to the savings bank’s capital account. A savings bank must file an application for
approval of a capital distribution if:
        •    the total capital distributions for the applicable calendar year exceed the sum of the savings bank’s net income for that year to date
             plus the savings bank’s retained net income for the preceding two years;
        •    the savings bank would not be at least adequately capitalized following the distribution;
        •    the distribution would violate any applicable statute, regulation, agreement or Office of Thrift Supervision-imposed condition; or
        •    the savings bank is not eligible for expedited treatment of its filings.

     Even if an application is not otherwise required, every savings bank that is a subsidiary of a holding company must still file a notice with
the Office of Thrift Supervision at least 30 days before the board of directors declares a dividend or approves a capital distribution.

      The Office of Thrift Supervision may disapprove a notice or application if:
        •    the savings bank would be undercapitalized following the distribution;
        •    the proposed capital distribution raises safety and soundness concerns; or
        •    the capital distribution would violate a prohibition contained in any statute, regulation or agreement.

       In addition, the Federal Deposit Insurance Act provides that an insured depository institution shall not make any capital distribution, if
after making such distribution the institution would be undercapitalized. A savings bank may not make a capital distribution that would reduce
its regulatory capital below the amount required for the liquidation account established in connection with its conversion to stock form.

      Liquidity. A federal savings bank is required to maintain a sufficient amount of liquid assets to ensure its safe and sound operation. We
anticipate that our liquidity levels will increase following the completion of the stock offering.

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      Community Reinvestment Act and Fair Lending Laws. All savings banks have a responsibility under the Community Reinvestment Act
and related regulations of the Office of Thrift Supervision to help meet the credit needs of their communities, including low- and
moderate-income borrowers. In connection with its examination of a federal savings bank, the Office of Thrift Supervision is required to assess
the savings bank’s record of compliance with the Community Reinvestment Act. In addition, the Equal Credit Opportunity Act and the Fair
Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes. A savings
bank’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate
applications such as branches or mergers, or in restrictions on its activities. The failure to comply with the Equal Credit Opportunity Act and
the Fair Housing Act could result in enforcement actions by the Office of Thrift Supervision, as well as other federal regulatory agencies and
the Department of Justice. SharePlus Federal Bank received a ―satisfactory‖ Community Reinvestment Act rating in its most recent federal
examination. The Community Reinvestment Act requires all Federal Deposit Insurance-insured institutions to publicly disclose their rating.

      Transactions with Related Parties. A federal savings bank’s authority to engage in transactions with its affiliates is limited by Office of
Thrift Supervision regulations and by Sections 23A and 23B of the Federal Reserve Act and its implementing Regulation W promulgated by
the Board of Governors of the Federal Reserve System. An affiliate is generally a company that controls, or is under common control with an
insured depository institution such as SharePlus Federal Bank. SP Bancorp, Inc. will be an affiliate of SharePlus Federal Bank. In general,
transactions between an insured depository institution and its affiliates are subject to certain quantitative and collateral requirements. In
addition, Office of Thrift Supervision regulations prohibit a savings bank from lending to any of its affiliates that are engaged in activities that
are not permissible for bank holding companies and from purchasing the securities of any affiliate, other than a subsidiary. Finally, transactions
with affiliates must be consistent with safe and sound banking practices, not involve low-quality assets and be on terms that are as favorable to
the institution as comparable transactions with non-affiliates. The Office of Thrift Supervision requires savings banks to maintain detailed
records of all transactions with affiliates.

      SharePlus Federal Bank’s authority to extend credit to its directors, executive officers and 10% stockholders, as well as to entities
controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O
of the Federal Reserve Board. Among other things, these provisions require that extensions of credit to insiders:
      (i)    be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those
             prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or
             present other unfavorable features; and
      (ii)   not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are
             based, in part, on the amount of SharePlus Federal Bank’s capital.

      In addition, extensions of credit in excess of certain limits must be approved by SharePlus Federal Bank’s board of directors.

      Enforcement. The Office of Thrift Supervision has primary enforcement responsibility over federal savings banks and has the authority
to bring enforcement action against all ―institution-affiliated parties,‖ including directors, officers, stockholders, attorneys, appraisers and
accountants who knowingly or recklessly participate in wrongful action likely to have an adverse effect on a federal savings bank. Formal
enforcement action by the Office of Thrift Supervision may range from the issuance of a capital directive or cease and desist order, to removal
of officers and/or directors of the institution, and the

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appointment of a receiver or conservator. Civil penalties cover a wide range of violations and actions, and range up to $25,000 per day, unless a
finding of reckless disregard is made, in which case penalties may be as high as $1 million per day. The Federal Deposit Insurance Corporation
also has the authority to terminate deposit insurance or to recommend to the Director of the Office of Thrift Supervision that enforcement
action be taken with respect to a particular savings institution. If action is not taken by the Director, the Federal Deposit Insurance Corporation
has authority to take action under specified circumstances.

      Standards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured
depository institutions. These standards relate to, among other things, internal controls, information systems and audit systems, loan
documentation, credit underwriting, interest rate risk exposure, asset growth, compensation, and other operational and managerial standards as
the agency deems appropriate. Interagency guidelines set forth the safety and soundness standards that the federal banking agencies use to
identify and address problems at insured depository institutions before capital becomes impaired. If the appropriate federal banking agency
determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the
agency an acceptable plan to achieve compliance with the standard. If an institution fails to meet these standards, the appropriate federal
banking agency may require the institution to implement an acceptable compliance plan. Failure to implement such a plan can result in further
enforcement action, including the issuance of a cease and desist order or the imposition of civil money penalties.

     Prompt Corrective Action Regulations . Under prompt corrective action regulations, the Office of Thrift Supervision is authorized and,
under certain circumstances, required to take supervisory actions against undercapitalized savings banks. For this purpose, a savings bank is
placed in one of the following five categories based on the savings bank’s capital:
        •    well-capitalized (at least 5% leverage capital, 6% Tier 1 risk-based capital and 10% total risk-based capital);
        •    adequately capitalized (at least 4% leverage capital, 4% Tier 1 risk-based capital and 8% total risk-based capital);
        •    undercapitalized (less than 3% leverage capital, 4% Tier 1 risk-based capital and 8% total risk-based capital);
        •    significantly undercapitalized (less than 3% leverage capital, 3% Tier 1 risk-based capital and 6% total risk-based capital); and
        •    critically undercapitalized (less than 2% tangible capital).

      Generally, the Office of Thrift Supervision is required to appoint a receiver or conservator for a savings bank that is ―critically
undercapitalized‖ within specific time frames. The regulations also provide that a capital restoration plan must be filed with the Office of Thrift
Supervision within 45 days of the date a savings bank receives notice that it is ―undercapitalized,‖ ―significantly undercapitalized‖ or ―critically
undercapitalized.‖ Any holding company of a savings bank that is required to submit a capital restoration plan must guarantee the lesser of an
amount equal to 5% of the savings bank’s assets at the time it was notified or deemed to be undercapitalized by the Office of Thrift
Supervision, or the amount necessary to restore the savings bank to adequately capitalized status. This guarantee remains in place until the
Office of Thrift Supervision notifies the savings bank that it has maintained adequately capitalized status for each of four consecutive calendar
quarters, and the Office of Thrift Supervision has the authority to require payment and collect payment under the guarantee. Failure by a
holding company to provide the required guarantee will result in certain operating restrictions on the savings bank, such as

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restrictions on the ability to declare and pay dividends, pay executive compensation and management fees, and increase assets or expand
operations. The Office of Thrift Supervision may also take any one of a number of discretionary supervisory actions against undercapitalized
savings banks, including the issuance of a capital directive and the replacement of senior executive officers and directors.

      At March 31, 2010, SharePlus Federal Bank met the criteria for being considered ―well-capitalized.‖

      Insurance of Deposit Accounts. SharePlus Federal Bank is a member of the Deposit Insurance Fund, which is administered by the
Federal Deposit Insurance Corporation (―FDIC‖). Deposit accounts at SharePlus Federal Bank are insured by the FDIC, generally up to a
maximum of $100,000 for each separately insured depositor and up to a maximum of $250,000 for self-directed retirement accounts. However,
the FDIC increased the deposit insurance available on all deposit accounts to $250,000, effective until December 31, 2013. In addition, certain
noninterest-bearing transaction accounts maintained with financial institutions participating in the FDIC’s Temporary Liquidity Guarantee
Program, Transaction Account Guarantee Program were fully insured regardless of the dollar amount until December 31, 2010. We opted to
participate in this part of the FDIC’s Temporary Liquidity Guarantee Program. See ―—Temporary Liquidity Guarantee Program.‖

       The FDIC imposes an assessment against all depository institutions for deposit insurance. This assessment is based on the risk category of
the institution and, prior to 2009, ranged from five to 43 basis points of the institution’s deposits. On February 27, 2009, the FDIC published a
final rule raising the current deposit insurance assessment rates to a range from 12 to 45 basis points beginning April 1, 2009.

      On May 22, 2009, the FDIC adopted a final rule imposing a 5 basis point special assessment on each insured depository institution’s
assets minus Tier 1 capital as of June 30, 2009. Our total expense for the special assessment was $95,000.

       The FDIC also adopted a rule pursuant to which all insured depository institutions were required to prepay their estimated assessments
for the fourth quarter of 2009, and for all of 2010, 2011 and 2012. The prepayment amount was collected on December 30, 2009. The
assessment rate for the fourth quarter of 2009 and for 2010 is based on each institution’s total base assessment rate for the third quarter of 2009,
modified to assume that the assessment rate in effect on September 30, 2009 had been in effect for the entire third quarter, and the assessment
rate for 2011 and 2012 will be equal to the modified third quarter assessment rate plus an additional three basis points. In addition, each
institution’s base assessment rate for each period will be calculated using its third quarter assessment base, adjusted quarterly for an estimated
5% annual growth rate in the assessment base through the end of 2012. We recorded the pre-payment as a prepaid expense, which will be
amortized to expense over three years. Based on our deposits and assessment rate as of September 30, 2009, our prepayment amount was
$991,000.

      The deposit insurance assessment rates are in addition to the assessments for payments on the bonds issued in the late 1980s by the
Financing Corporation, or FICO, to recapitalize the now defunct Federal Savings and Loan Insurance Corporation. The FICO payments will
continue until the FICO bonds mature in 2017 through 2019. Excluding the special assessment noted above, our expense for the assessment of
deposit insurance and the FICO payments was $240,000 for 2009 and $164,000 for 2008. The FDIC also established 1.25% of estimated
insured deposits as the designated reserve ratio of the DIF. The FDIC is authorized to change the assessment rates as necessary, subject to the
previously discussed limitations, to maintain the required reserve ratio of 1.25%.

     We are participating in the FDIC’s Temporary Account Guarantee (―TAG‖) program, which is a part of the FDIC’s TLG program. The
purpose of the TLG is to strengthen confidence and encourage liquidity in the banking system. Under the TAG, funds in non-interest-bearing
accounts, in interest-

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bearing transaction accounts with interest rates of 0.50% or less and in Interest on Lawyers Trust Accounts will have a temporary unlimited
guarantee from the FDIC until June 30, 2010. The coverage of the TAG is in addition to and separate from coverage available under the
FDIC’s general deposit insurance rules, which insure accounts up to $250,000.

      Temporary Liquidity Guarantee Program. On October 14, 2008, the FDIC announced a new program – the Temporary Liquidity
Guarantee Program. The Debt Guarantee component of this program guarantees newly issued senior unsecured debt of a participating
organization, up to certain limits established for each institution, issued between October 14, 2008 and December 31, 2009, subsequently
extended until April 30, 2010. The FDIC will pay the unpaid principal and interest on FDIC-guaranteed debt instruments upon the uncured
failure of the participating entity to make timely payments of principal or interest in accordance with the terms of the instrument. The guarantee
will remain in effect until December 31, 2012. In return for the FDIC’s guarantee, participating institutions will pay the FDIC a fee based on
the amount and maturity of the debt. We opted not to participate in this part of the Temporary Liquidity Guarantee Program.

      The other component of the Temporary Liquidity Guarantee Program, the Transaction Account Guarantee Program, provides full federal
deposit insurance coverage for non-interest bearing transaction deposit accounts, regardless of dollar amount, until December 31, 2010. A fee
ranging from an annualized 15 to 25 basis points depending upon an institution’s risk profile, is assessed quarterly on balances in
noninterest-bearing transaction accounts that exceed the existing deposit insurance limit of $250,000 insured depository institutions that have
not opted out of this component of the Temporary Liquidity Guarantee Program. We opted to participate in this component of the Temporary
Liquidity Guarantee Program.

      Prohibitions Against Tying Arrangements . Federal savings banks are prohibited, subject to some exceptions, from extending credit to or
offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer
obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.

      Federal Home Loan Bank System. SharePlus Federal Bank is a member of the Federal Home Loan Bank System, which consists of 12
regional Federal Home Loan Banks. The Federal Home Loan Bank System provides a central credit facility primarily for member institutions
as well as other entities involved in home mortgage lending. As a member of the Federal Home Loan Bank of Dallas, SharePlus Federal Bank
is required to acquire and hold shares of capital stock in the Federal Home Loan Bank. As of March 31, 2010, SharePlus Federal Bank was in
compliance with this requirement.

Other Regulations
     Interest and other charges collected or contracted for by SharePlus Federal Bank are subject to state usury laws and federal laws
concerning interest rates. SharePlus Federal Bank’s operations are also subject to federal laws applicable to credit transactions, such as the:
        •    Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
        •    Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to
             determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;
        •    Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;

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        •    Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies;
        •    Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies;
        •    Truth in Savings Act; and
        •    rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.

      The operations of SharePlus Federal Bank also are subject to the:
        •    Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes
             procedures for complying with administrative subpoenas of financial records;
        •    Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals
             from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic
             banking services;
        •    Check Clearing for the 21 st Century Act (also known as ―Check 21‖), which gives ―substitute checks,‖ such as digital check
             images and copies made from that image, the same legal standing as the original paper check;
        •    The USA PATRIOT Act, which requires savings banks to, among other things, establish broadened anti-money laundering
             compliance programs, and due diligence policies and controls to ensure the detection and reporting of money laundering. Such
             required compliance programs are intended to supplement existing compliance requirements that also apply to financial institutions
             under the Bank Secrecy Act and the Office of Foreign Assets Control regulations; and
        •    The Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions
             with unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial
             products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such
             customers the opportunity to ―opt out‖ of the sharing of certain personal financial information with unaffiliated third parties.

Holding Company Regulation
      General . Upon completion of the conversion, SP Bancorp, Inc. will be a non-diversified savings and loan holding company within the
meaning of the Home Owners’ Loan Act. As such, SP Bancorp, Inc. will be registered with the Office of Thrift Supervision and will be subject
to Office of Thrift Supervision regulations, examinations, supervision and reporting requirements. In addition, the Office of Thrift Supervision
will have enforcement authority over SP Bancorp, Inc. and its subsidiaries. Among other things, this authority permits the Office of Thrift
Supervision to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings institution. Unlike bank holding
companies, federal savings and loan holding companies are not subject to any regulatory capital requirements or to supervision by the Federal
Reserve Board. See ―Risk Factors - Legislation has been introduced that would eliminate the Office of Thrift Supervision and would require
SharePlus Federal Bank and SP Bancorp, Inc. to become regulated by other federal regulatory agencies.‖

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      Permissible Activities. Under present law, the business activities of SP Bancorp, Inc. will be generally limited to those activities
permissible for financial holding companies under Section 4(k) of the Bank Holding Company Act of 1956, as amended, or for multiple
savings and loan holding companies. A financial holding company may engage in activities that are financial in nature, including underwriting
equity securities and insurance as well as activities that are incidental to financial activities or complementary to a financial activity. A multiple
savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank
Holding Company Act, subject to the prior approval of the Office of Thrift Supervision, and certain additional activities authorized by Office of
Thrift Supervision regulations.

       Federal law prohibits a savings and loan holding company, including SP Bancorp, Inc., directly or indirectly, or through one or more
subsidiaries, from acquiring more than 5% of another savings institution or holding company thereof, without prior written approval of the
Office of Thrift Supervision. It also prohibits the acquisition or retention of, with certain exceptions, more than 5% of a nonsubsidiary company
engaged in activities that are not closely related to banking or financial in nature, or acquiring or retaining control of an institution that is not
federally insured. In evaluating applications by holding companies to acquire savings institutions, the Office of Thrift Supervision must
consider the financial and managerial resources, future prospects of the company and institution involved, the effect of the acquisition on the
risk to the federal deposit insurance fund, the convenience and needs of the community and competitive factors.

    The Office of Thrift Supervision is prohibited from approving any acquisition that would result in a multiple savings and loan holding
company controlling savings institutions in more than one state, subject to two exceptions:
      (i)    the approval of interstate supervisory acquisitions by savings and loan holding companies; and
      (ii)   the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit
             such acquisition.

      The states vary in the extent to which they permit interstate savings and loan holding company acquisitions.

Federal Securities Laws
      We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 for the registration
of the shares of common stock to be issued pursuant to the stock offering. Upon completion of the stock offering, our common stock will be
registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. We will be subject to the information,
proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.

      The registration under the Securities Act of 1933 of shares of common stock to be issued in the stock offering does not cover the resale of
those shares. Shares of common stock purchased by persons who are not our affiliates may be resold without registration. Shares purchased by
our affiliates will be subject to the resale restrictions of Rule 144 under the Securities Act of 1933. If we meet the current public information
requirements of Rule 144 under the Securities Act of 1933, each affiliate of ours that complies with the other conditions of Rule 144, including
those that require the affiliate’s sale to be aggregated with those of other persons, would be able to sell in the public market, without
registration, a

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number of shares not to exceed, in any three-month period, the greater of 1% of our outstanding shares, or the average weekly volume of
trading in the shares during the preceding four calendar weeks. In the future, we may permit affiliates to have their shares registered for sale
under the Securities Act of 1933.

Sarbanes-Oxley Act of 2002
      The Sarbanes-Oxley Act of 2002 addresses, among other issues, corporate governance, auditing and accounting, executive compensation,
and enhanced and timely disclosure of corporate information. As directed by the Sarbanes-Oxley Act, our Chief Executive Officer and Chief
Financial Officer will be required to certify that our quarterly and annual reports do not contain any untrue statement of a material fact. The
rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley Act have several requirements, including having these
officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal control over
financial reporting; they have made certain disclosures to our auditors and the audit committee of the board of directors about our internal
control over financial reporting; and they have included information in our quarterly and annual reports about their evaluation and whether
there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over
financial reporting. We will be subject to further reporting and audit requirements beginning with the fiscal year ending December 31, 2011
under the requirements of the Sarbanes-Oxley Act. We will prepare policies, procedures and systems designed to ensure compliance with
these regulations.


                                                                   TAXATION

Federal Taxation
      General. SP Bancorp, Inc. and SharePlus Federal Bank are subject to federal income taxation in the same general manner as other
corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize material
federal income tax matters and is not a comprehensive description of the tax rules applicable to SP Bancorp, Inc. and SharePlus Federal Bank.

      Method of Accounting . For federal income tax purposes, SharePlus Federal Bank currently reports its income and expenses on the
accrual method of accounting and uses a tax year ending December 31st for filing its consolidated federal income tax returns. The Small
Business Protection Act of 1996 eliminated the use of the reserve method of accounting for bad debt reserves by savings institutions, effective
for taxable years beginning after 1995.

       Minimum Tax. The Internal Revenue Code of 1986, as amended, imposes an alternative minimum tax at a rate of 20% on a base of
regular taxable income plus certain tax preferences, referred to as ―alternative minimum taxable income.‖ The alternative minimum tax is
payable to the extent alternative minimum taxable income is in excess of an exemption amount. Net operating losses can, in general, offset no
more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular
tax liabilities in future years. At December 31, 2009, SharePlus Federal Bank had a $30,000 minimum tax credit carryforward.

      Net Operating Loss Carryovers. Generally, a financial institution may carry back net operating losses to the preceding two taxable years
and forward to the succeeding 20 taxable years. However, as a result of recent legislation, subject to certain limitations, the carryback period
for net operating losses incurred in 2008 or 2009 (but not both years) has been expanded to five years. At March 31, 2010, SharePlus Federal
Bank had a net operating loss carryforward of $402,000 for federal income tax purposes.

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     Corporate Dividends. We may exclude from our income 100% of dividends received from SharePlus Federal Bank as a member of the
same affiliated group of corporations.

       Audit of Tax Returns. SharePlus Federal Bank’s federal income tax returns have not been audited in the most recent five-year period.

State Taxation
       In 2006 the State of Texas enacted legislation replacing its franchise tax with a margin tax effective with tax reports filed on or after
January 1, 2008. The Texas margin tax is computed by applying the applicable tax rate (1% for most entities) to the margin. Margin equals the
lesser of three calculations: total revenue minus cost of goods sold; total revenue minus compensation; or total revenue times 70%. Lending
institutions may deduct interest expense as cost of goods sold. Our calculation in 2009 was total revenue minus compensation.


                                                  MANAGEMENT OF SP BANCORP, INC.

Shared Management Structure
      The directors of SP Bancorp, Inc. are the same persons who are the directors of SharePlus Federal Bank. In addition, each executive
officer of SP Bancorp, Inc. is also an executive officer of SharePlus Federal Bank. We expect that SP Bancorp, Inc. and SharePlus Federal
Bank will continue to have common executive officers until there is a business reason to establish separate management structures.

Executive Officers of SP Bancorp, Inc. and SharePlus Federal Bank
      The following table sets forth information regarding the executive officers of SP Bancorp, Inc. and SharePlus Federal Bank and their ages
as of March 31, 2010.

Name                                      Age                                                Position
Jeffrey Weaver                            53    President and Chief Executive Officer
Suzanne C. Salls                          51    Senior Vice President and Chief Financial Officer
Jerry Sanders                             55    Senior Vice President – Commercial Lending
Gaye Rowland                              54    Senior Vice President – Retail Lending

       The executive officers of SP Bancorp, Inc. and SharePlus Federal Bank are elected annually.

Directors of SP Bancorp, Inc. and SharePlus Federal Bank
     SP Bancorp, Inc. has nine directors. Directors serve three-year staggered terms. Directors of SharePlus Federal Bank will be elected by
SP Bancorp, Inc. as its sole stockholder.

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     The following table states our directors’ names, their ages as of March 31, 2010, the years when they began serving as directors of
SharePlus Federal Bank or its predecessor credit union and when their current term expires:

                                                                 Position(s) Held With                                  Director     Current Term
Name                                                               SP Bancorp, Inc.                             Age      Since         Expires
David Rader                            Director                                                                 62       2010           2013
P. Stan Keith                          Director                                                                 50       2010           2012
Christopher Cozby                      Director                                                                 46       2010           2013
Carl Forsythe                          Director                                                                 52       2002           2011
Richard Holland                        Vice Chairman of the Board                                               56       2005           2012
David Stephens                         Director                                                                 58       2007           2011
Jeffrey Weaver                         President, Chief Executive Officer and Director                          53       2005           2011
Jeff Williams                          Director                                                                 40       2008           2012
Paul Zmigrosky                         Chairman of the Board                                                    57       1998           2013

Director Qualifications
      In considering and identifying individual candidates for Director, our Nominating Committee and our Board of Directors takes into
account several factors which they believe are important to the operations of the Company as a community banking institution. With respect to
specific candidates, the Board and Committee assess the specific qualities and experience that such individuals possess, including: (1) overall
familiarity and experience with the market areas served by the Company and the community groups located in such communities;
(2) knowledge of the local real estate markets and real estate professionals; (3) contacts with and knowledge of local businesses operating in the
Company’s market area; (4) professional and educational experience, with particular emphasis on real estate, legal, accounting or financial
services; (5) experience with the local governments and agencies and political activities; (6) any adverse regulatory or legal actions involving
the individual or entity controlled by the individual; (7) the integrity, honesty and reputation of the individual; (8) experience or involvement
with other local financial services companies and potential conflicts that may develop; (9) the past service with the Company or its subsidiaries
and contributions to their operations; and (10) the independence of the individual. While the Board of Directors and the Committee do not
maintain a written policy on diversity which specifies the qualities or factors the Board or Committee must consider when assessing Board
members individually or in connection with assessing the overall composition of the Board, the Board and Committee take into account: (1) the
effectiveness of the existing Board of Directors or additional qualifications that may be required when selecting new Board members; (2) the
requisite expertise and sufficiently diverse backgrounds of the Board of Directors’ overall membership composition; and (3) the number of
independent outside Directors and other possible conflicts of interest of existing and potential members of the Board of Directors. Additionally,
the charter of the Nominating Committee includes a statement that it and the Board of Directors believe that diversity is an important
component of a board of directors, including such factors as background, skills, experience, expertise, gender, race and culture.

Board Independence
      The board of directors has determined that each of our directors, with the exception of President and Chief Executive Officer Jeffrey
Weaver, is ―independent‖ as defined in the listing standards of the Nasdaq Stock Market. Mr. Weaver is not independent because he is one of
our executive officers. There were no transactions not required to be reported under ―—Transactions With Certain Related Persons,‖ below that
were considered in determining the independence of our directors.

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The Business Background of Our Directors and Executive Officers
      The business experience for the past five years of each of our directors and executive officers is set forth below. With respect to directors,
the biographies also contain information regarding the person’s experience, qualifications, attributes or skills that caused the Nominating
Committee and the board of directors to determine that the person should serve as a director. Each director is also a director of SharePlus
Federal Bank. Unless otherwise indicated, directors and executive officers have held their positions for the past five years.

   Directors:
      Paul Zmigrosky is group vice president of strategic sourcing for PepsiCo Americas Foods, which includes Frito-Lay North America. He
is responsible for procurement, logistics and supply chain management for all raw materials, contract manufactured finished goods, and other
goods and services to support Frito-Lay’s U.S. and Canadian operations and Quaker Foods, as well as all procurement and commodity risk
management for PepsiCo’s global commodity and ingredient requirements. Mr. Zmigrosky has been with PepsiCo for more than 30 years, and
has held numerous leadership positions in both operations and finance as well as strategic sourcing. He graduated from Duquesne University in
Pittsburgh and holds an MBA from the University of Texas. He also is a member of the Dallas Zoological Society board of directors and has
served on Texas Gov. Rick Perry’s Competitiveness Council. Mr. Zmigrosky’s executive management experience provides the Board with
general business acumen. Additionally, his years of experience with one of the Bank’s former sponsor companies provide the Board with
insight as to how to best service the banking needs of this part of the Bank’s customer base.

      Richard C. Holland is President and founder of Holland Advisors, a management consulting firm, a position he has held since 2006.
Prior to starting his firm, Mr. Holland was a senior manager at The Boston Consulting Group, and co-leader of the firm’s diversity practice. He
received his BS in Engineering Physics from Cornell University, an MS in Nuclear Engineering from MIT, and an MBA in Finance from
Columbia University. Mr. Holland’s management consulting experience and his broad educational background provide the Board with valuable
insight into strategic business decisions for SharePlus Federal Bank.

      Jeffrey Weaver is President and Chief Executive Officer of SharePlus Federal Bank, a position he has held since July 2005. Previously,
he served as an Executive Vice President of a multi-billion dollar bank in Dallas, Texas. Mr. Weaver has over 30 years of diverse banking and
management experience with both national and regional banking institutions, including assignments in marketing, sales, lending, operations
and technology, investment services, cash management, and acquisitions and divestitures. He earned his B.A. from Southwestern University,
Georgetown, Texas, and his MBA from Baylor University. Mr. Weaver’s significant and varied banking experience as well as continued
participation in financial industry trade associations provides the Board with a perspective on the day-to-day operations of SharePlus Federal
Bank, local business opportunities, and assists the Board in assessing the trends and developments in the financial institutions industry on a
local and national basis.

      Carl W. Forsythe is the President and CEO of Globe Composite Solutions, Ltd., a privately-held manufacturer of high-performance
composite components for industrial and military applications. He has held that position since 2002. Mr. Forsythe has held numerous executive
positions at both private and public companies including: KISCO, a boutique venture capital company; Advanta Mortgage Company; Home
Savings/H.F. Ahmanson; Bank One, Michigan National Bank and Comerica Bank. Mr. Forsythe began his career at Ford Motor Company. He
holds a BA in Biochemistry from Columbia University and an MBA from Cornell University. Mr. Forsythe’s executive management
experience in numerous enterprises, including regional and national financial service companies provides the Board with general business
acumen.

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      Jeffrey Williams is an attorney and founding partner of the law firm Williams Anderson LLP in Dallas, a position he has held since
2009. From 2005 to 2008, Mr. Williams served as General Counsel of a hospitality/real estate development firm, closing over $1 billion in
transactions. From 2000 to 2005, Mr. Williams was an associate attorney with the international law firm Vinson & Elkins L.L.P., working in
their Business and International Section. He holds a BBA in International Business and Entrepreneurship from Baylor University, and received
his Juris Doctor cum laude from Georgetown University Law Center. His legal experience provides the Board with insight on legal matters
involving SharePlus Federal Bank, and his local contacts with customers and businesses assist the Bank with business generation and product
offerings.

      David Rader recently retired as Executive Vice President and Chief Financial Officer for Frito-Lay North America. He served in this
position since 1998. He earned both his BS in Electrical Engineering and his MBA from Ohio State University. Mr. Rader’s executive
management experience provides the Board with general business acumen. Additionally, his years of experience as a chief financial officer of a
corporation, including expertise in financial accounting and SEC reporting, provides the Board and the Audit Committee of the Board with
valuable financial accounting experience.

      P. Stan Keith is President and Chief Executive Officer of Promettre International Ventures, Inc., a closely held investment corporation
involved in angel, early-stage private equity ventures, strategic real estate development financings, and proprietary trading platforms. He has
served in this position since 1992. He was a co-founder of CompUSA, Inc. and served from 1987-1992 as Executive Vice-President-Finance,
Chief Financial Officer, Secretary and Treasurer. Mr. Keith is a Certified Public Accountant (Texas) and received his BBA in Accounting from
the University of Oklahoma. Mr. Keith’s experience in managing the operations of business enterprises provides the Board with general
business acumen, and his background as a certified public accountant and senior executive at a high growth public company provides the Board
insight into the accounting and reporting issues faced by SharePlus Federal Bank and in assessing strategic transactions involving the Bank.

      Christopher Cozby is Senior Vice President at CB Richard Ellis, a commercial firm based in Los Angeles offering a full range of services
for property owners, tenants and investors, where he in charge of Retail Investments Sales for Texas and the surrounding southwest states. He
has served in that position since April 2010. Prior to CBRE, Mr. Cozby was a principal at Thackeray Partners, a real estate private equity firm.
Mr. Cozby graduated from the University of Texas with a Liberal Arts degree in Economics. Mr. Cozby’s experience with local and regional
real estate sales and development provides the Board with assistance in assessing local real estate values, trends and developments, in
identifying potential new lending customers and in assessing the relative risk of projects and properties securing loans made by SharePlus
Federal Bank.

      David Stephens is President and Chief Executive Officer of Stephens Management Group which includes Millennium Audi of Houston,
Texas. Mr. Stephens has owned automobile dealerships since 1993 after having served for 13 years in various management positions at Ford
Motor Company and was the first African-American auto dealer for Jaguar and Audi brands. He is also co-owner of Pinnacle Excavation of
Dallas, Texas. He serves on the boards for Paul Quinn College, Baylor Health Care System Foundation Dallas, Ford Motor Minority Dealers
Association (FMMDA) and the National Association of Minority Automobile Dealers (NAMAD). He is active in the local United Negro
College Fund, American Cancer Society, Crystal Charity Ball, Dallas Museum of Art, TACA, the Ron Springs and Everson Walls Gift For
Life Foundation, and the African American Museum, among others. Mr. Stephens received his BS in Business Administration from Southern
University. Mr. Stephens’ experience in managing the operations of many business enterprises provides the Board with general business
acumen.

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   Executive Officers Who Are Not Also Directors:
      Suzanne C. Salls is Senior Vice President/Chief Financial Officer of SharePlus Federal Bank, a position she has held since 2005. She has
over 25 years of experience in the financial services industry. She began her career as an auditor with KPMG and later transitioned into
banking, serving various accounting and management roles in several Texas Community banks. She is a Certified Public Accountant and
obtained a Bachelor of Business Administration in Accounting from Texas Tech University, where she graduated cum laude.

      Jerry Sanders is Senior Vice President Commercial Lending of SharePlus Federal Bank, a position he has held since 2009. Prior to this
appointment, Mr. Sanders served as Market President for the Dallas and McKinney markets for First United Bank and Trust. He has over 30
years of banking experience, including serving as Market President for two regional banks headquartered in the Dallas / Fort Worth area. He
devotes much of his time to the community through involvement in volunteer and professional organizations. He earned his Bachelor of
Science in Finance from Oklahoma State University and attended the LSU Graduate School of Banking.

      Gaye Rowland is Senior Vice President Retail Lending of SharePlus Federal Bank, a position she has held since 2007. Prior to this
appointment, she ran her own mortgage company for several years and managed lending for several Dallas banks. She has over 30 years’
experience in the banking industry. Ms. Rowland attended Illinois State University, Arizona State University and several banking schools,
including Risk Management Association and Bank Administration Institute.

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Meetings and Committees of the Board of Directors
      We conduct business through meetings of our board of directors and its committees. During the year ended December 31, 2009, the board
of directors of SP Bancorp, Inc. did not meet and the board of directors of SharePlus Federal Bank had 12 regular meetings and 2 special
meetings. The board of directors of SP Bancorp, Inc. has established the following standing committees: the Compensation Committee, the
Nominating and Corporate Governance Committee and the Audit Committee. Each of these committees operates under a written charter, which
governs their composition, responsibilities and operations.

     The table below sets forth the directors of each of the listed standing committees, and the number of meetings held by the comparable
committee of SharePlus Federal Bank. SharePlus Federal Bank did not have a standing Nominating and Corporate Governance Committee in
2009. The board of directors of SP Bancorp, Inc. has designated director David Rader as an ―Audit Committee Financial Expert‖ for the Audit
Committee, as that term is defined by the rules and regulations of the Securities and Exchange Commission.

                                                Nominating and
                                        Corporate Governance Committee              Compensation                          Audit
                                               Jeff Williams *                  Richard Holland *                    David Rader *
                                              Richard Holland                      Chris Cozby                       Carl Forsythe
                                                 Stan Keith                       David Stephens                       Stan Keith
                                                                                   Jeff Williams
Number of Meetings in 2009:                    Not applicable                            5                                 5

* Denotes committee chair as of March 31, 2010.

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Directors’ Compensation
      The following table sets forth the compensation paid to our directors who are not also employees during the year ended December 31,
2009. Mr. Jeffrey Weaver, who is a director and is also our President and Chief Executive Officer, does not receive any retainer or fees for his
service as a director. Information with respect to compensation paid to Mr. Weaver is included below in ―Executive Officer Compensation –
Summary Compensation Table.‖ Each of our directors will also serve on the boards of SP Bancorp, Inc. and SharePlus Federal Bank.

                                                 Director Compensation For the Year Ended
                                                            December 31, 2009

                                                                                                          Fees earned
                                                                                                           or paid in
                                                                                                              cash            Total
                    Name                                                                                       ($)             ($)
                    B. Jeff Bearrows (1)                                                                      11,950          11,950
                    Larry Caldwell (1)                                                                        12,250          12,250
                    Andrew Fisher (1)                                                                         12,250          12,250
                    Carl Forsythe                                                                             11,800          11,800
                    Richard Holland                                                                           11,800          11,800
                    David Stephens                                                                            12,250          12,250
                    Jeffrey B. Williams                                                                       12,250          12,250
                    Paul Zmigrosky                                                                            12,850          12,850

(1)    Messrs. Bearrows, Caldwell and Fisher retired from the Board of Directors effective April 30, 2010.

      Fees. In the fiscal year ended December 31, 2009, SharePlus Federal Bank paid each director a monthly retainer of $600 ($750 for our
Chairman of the Board) and $450 for each board meeting attended. Following the conversion, it is anticipated that the Board will consider
increases to Board fees in light of the increased responsibilities associated with being a public company. In addition, it is anticipated that the
Board will consider the payment of Board fees for service on committees of the Board.

Executive Officer Compensation
     Summary Compensation Table. The following table sets forth the total compensation paid to or earned by our Chief Executive Officer
and President, Jeffrey Weaver, our Senior Vice President and Chief Financial Officer, Suzanne Salls and our Senior Vice President-Retail
Lending, Gaye Rowland, for the year ended December 31, 2009. We refer to these individuals as ―Named Executive Officers.‖

                                                                                     Summary Compensation Table for the Year Ended December 31,
                                                                                                               2009
                                                                                                        Non-Equity            All other
                                                                              Fiscal                      Incentive         compensation
Name and principal position with SharePlus                                     Year       Salary       Compensation               (1)             Total
Federal Bank                                                                  Ended        ($)               ($)                 ($)               ($)
Jeffrey Weaver, President and Chief Executive Officer                          2009        222,784             63,500            93,653           379,937
Suzanne Salls, Senior Vice President and Chief Financial Officer               2009        135,585             23,500            23,917           183,002
Gaye Rowland, Senior Vice President, Retail Lending                            2009        140,400             18,500            30,315           189,215

(1)    The amounts in this column reflect what we have paid for, or reimbursed, the applicable Named Executive Officer for various benefits
       and perquisites that we provide. A break-down of the various elements of compensation in this column is set forth in the table
       immediately following.

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                                                                                                    All Other Compensation
                                                                                       Mr. Weaver           Ms. Salls        Ms. Rowland
            Employer 401(k) Matching Contribution                                     $   11,076         $    9,743          $    8,848
            Personal Use of Auto                                                          12,000                —                   —
            Non-qualified Deferred Compensation                                           48,669                —                   —
            Health Insurance                                                              21,908             14,174              21,467
            Total                                                                     $   93,653         $ 23,917            $   30,315


      2009 Incentive Compensation Plan . SharePlus Federal Bank sponsored a 2009 Annual Incentive Plan for Executives (―2009 AIP‖),
which was administered by the Compensation Committee of the board of directors. The Committee has the authority to select employees who
will participate in the plan, determine the terms and conditions of the awards, and interpret the plan. The Committee also has the authority to
increase, reduce or eliminate the final award determinations, based upon object or subjective criteria it deems appropriate.

     Under the 2009 AIP, the Compensation Committee set the bonus pool at approximately 27% of pre-tax net income, net of the bonus
accrual. For 2009, if pre-tax net income equaled or exceeded the $707,000 target, the maximum available bonus of each participant, as a
percentage of such persons’ base salary, was determined to be between 10% and 50%, depending on each participant’s position. If pre-tax net
income did not reach 50% of the targeted amount, no bonuses would be paid.

     The available bonus amount varied depending on the actual pre-tax net income achieved for the year, up to 300% of budgeted pre-tax net
income. Actual pre-tax net income achieved for 2009 was $855,000 and the available bonus pool for the year was approximately $323,000. The
Compensation Committee exercised its judgment and lowered the final pool to $205,000.

       Assuming achievement of pre-tax net income at or above the threshold level, participants achieved a bonus for the year based on
satisfaction of corporate/team goals and individual goals, using a scorecard model. Achievement of the corporate/team goal determined 70% of
the individual’s bonus and achievement of individual goals determined up to 30% of such person’s bonus. The corporate/team goal was set as
achievement of the pre-tax net income goal. The individual goals, on the other hand, were tailored to each position within the company. Each
individual has approximately three to four individual goals that are weighted based on relative importance and specific to their positions (which
goals comprise 75% of the potential bonus for individual achievement) and five goals characterized as ―competencies and behaviors‖ which
measure the individual’s performance in five areas that directly relate to the bank’s mission, vision and values, including: (i) always does what
is right; (2) teamwork; (3) customer service focus; (4) community service; and (5) results focus.

      For Mr. Weaver, the individual position specific goals included, among other things, maintaining credit quality through internal and
external loan reviews, ongoing credit administration and audits, producing $45 million in mortgage and consumer loans and growing retail
lending balances by $13.5 million, controlling expenses through outsourcing market functions and closely monitoring vendor costs. For
Ms. Rowland, individual position specific goals included, among other things, producing $45 million in mortgage and consumer loans and
growing retail lending balances by $13.5 million, making self sufficient the FHA origination and underwriting functions and achieving a
non-supervised lender designation by year end, and working with management to establish an ongoing program of community

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support and involvement within the defined Community Reinvestment Act assessment areas. For Ms. Salls, the individual position specific
goals included reviewing mortgage loan servicing portfolio and recommending a method of handling, exploring and identifying operational
efficiencies, opportunities and growth strategies, and developing an enhanced management tool to monitor and mange the bank’s net interest
rate margin.

      2008 Nonqualified Deferred Compensation Plan . SharePlus Federal Bank adopted the 2008 Nonqualified Deferred Compensation Plan
to provide selected executive employees with nonqualified deferred compensation, subject to vesting. The committee administering the plan
selects the executive employees eligible to participate in the plan. At this time, the only participant in the plan is Jeffrey Weaver, our President
and Chief Executive Officer. A participant’s benefit under the plan consists solely of the net amount credited to his or her account. The
participant’s account will be credited periodically with any interest or other investment earnings credited under the annuity contract or other
investment alternative identified in the plan. Mr. Weaver’s account accrues interest measured under an annuity contract identified in a schedule
to the plan. The amount credited to his account is also subject to a vesting schedule that vests Mr. Weaver at the rate of 20% per year, starting
on the first anniversary of his initial participation date. Mr. Weaver’s account will also become 100% vested upon his death, disability or upon
a change in control. In the event of his termination for cause, Mr. Weaver will forfeit his benefit. Payment of the plan’s benefit will be made in
a single cash payment within 90 days of the earlier of the date on which his account becomes 100% vested or the date of the participant’s
separation from service other than for cause. In the event of his death, payment will be made to the participant’s beneficiary.

      Phantom Stock Plan . SharePlus Federal Bank adopted a Phantom Stock Plan in 2006 (and later amended) to provide participants with
the opportunity to realize benefits commensurate with SharePlus Federal Bank’s performance and value creation. Employees and eligible
directors selected by the committee established under the plan were granted awards of phantom stock units, the value of which would be based
on increases in the net worth of SharePlus Federal Bank.

      The Phantom Stock Plan has been terminated and phantom stock units with value will be cashed out by SharePlus Federal Bank not less
than 12 months after the date of termination in accordance with Section 409A of the Internal Revenue Code. The aggregate payout to all plan
participants is expected to be less than $10,000.

    The table below represents the non-vested phantom stock units attributable to our Named Executive Officers as of the end of our last
completed fiscal year:

                                               Outstanding Equity Awards at Fiscal year End

                                                                                         Stock Awards
                                                        Number of shares or units of                    Market value of shares or units of
                                                         stock that have not vested                        stock that have not vested
                    Name                                             (#)                                               ($)
                    Gaye Rowland                                                 6,667                                                  1,533

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Tax Qualified Plans
       401(k) Plan . SharePlus Federal Bank provides its employees with tax-qualified retirement benefits through a 401(k) plan. All employees
who meet the age and service requirements may participate in the 401(k) plan. Participants may contribute up to 100% of their annual
compensation to the plan on a pre-tax basis, subject to limits prescribed by law. SharePlus Federal Bank provides a 401(k) match equal to at
least 5% of the participant’s salary. Employer contributions are subject to a six-year graded vesting schedule such that 20% of a participant’s
discretionary contributions vest after two years of service and an additional 20% vest after each following year of credited service so that a
participant is 100% vested in his or her discretionary contributions after six years of credited service. Participants are always 100% vested in
their salary deferrals and amounts they roll-over into the plan. Participants will also become 100% vested in the discretionary contributions
allocated to their accounts upon attainment of normal retirement age or in the event of the participant’s death or disability. Participants may
invest their accounts in the investment options provided under the plan. Participants may make in-service withdrawals from their accounts after
they have attained age 59 1 / 2 , provided they are fully vested in their accounts. They may also request a withdrawal from their accounts in the
event they incur a financial hardship. A participant will become eligible for distribution of his or her plan benefit upon termination of
employment. Participants may elect to receive payments of their benefits in a lump sum or in installments, provided that account balances of
$1,000 or less will be paid in a lump sum and amounts exceeding $1,000 but not exceeding $5,000 will be rolled over to an individual
retirement plan unless the participant elects to receive payment in a lump sum.

Stock-Based Benefit Plans
      Employee Stock Ownership Plan. In connection with the conversion and offering, SharePlus Federal Bank plans to adopt an employee
stock ownership plan for eligible employees. An employee stock ownership plan is a tax-qualified retirement plan that primarily invests in the
common stock of SP Bancorp, Inc. Eligible employees who have attained age 21 and who are employed for one year will begin participation in
the employee stock ownership plan on the later of the effective date of the employee stock ownership plan or upon the first entry date
commencing on or after the eligible employee’s completion of 1,000 hours of service during a continuous 12-month period.

      The employee stock ownership plan trustee is expected to purchase, on behalf of the employee stock ownership plan, 8% of the total
number of shares of SP Bancorp, Inc. common stock issued in the offering. We anticipate that the employee stock ownership plan will fund its
stock purchase with a loan from SP Bancorp, Inc. equal to the aggregate purchase price of the common stock. The loan will be repaid
principally through SharePlus Federal Bank’s contribution to the employee stock ownership plan and dividends payable on common stock held
by the employee stock ownership plan over the anticipated 20-year term of the loan. The interest rate for the employee stock ownership plan
loan is expected to be an adjustable rate equal to the prime interest rate, as published in The Wall Street Journal , on the closing date of the
offering. Thereafter the interest rate will adjust annually and will be the prime rate on the first business day of the calendar year, retroactive to
January 1 of such year. See ―Pro Forma Data.‖

      The trustee will hold the shares purchased by the employee stock ownership plan in an unallocated suspense account, and shares will be
released from the suspense account on a pro-rata basis as SharePlus Federal Bank repays the loan. The trustee will allocate the shares released
among participants on the basis of each participant’s proportional share of compensation relative to all participants. A participant becomes
vested in his or her account balance at the rate of 20% per year over a 6-year period. Participants who were employed by SharePlus Federal
Bank immediately prior to the offering will receive credit for vesting purposes for years of service prior to adoption of the employee stock
ownership plan. Participants also will become fully vested automatically upon normal retirement, death or disability, a

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change in control, or termination of the employee stock ownership plan. Generally, participants will receive distributions from the employee
stock ownership plan upon separation from service. The employee stock ownership plan reallocates any unvested shares forfeited upon
termination of employment among the remaining participants.

       The employee stock ownership plan permits participants to direct the trustee as to how to vote the shares of common stock allocated to
their accounts. The trustee votes unallocated shares and allocated shares for which participants do not provide instructions on any matter in the
same ratio as those shares for which participants provide instructions, subject to fulfillment of the trustee’s fiduciary responsibilities.

      Under applicable accounting requirements, SharePlus Federal Bank will record a compensation expense for the employee stock
ownership plan at the fair market value of the shares as they are committed to be released from the unallocated suspense account to
participants’ accounts. The compensation expense resulting from the release of the common stock from the suspense account and allocation to
plan participants will result in a corresponding reduction in SP Bancorp, Inc.’s earnings.

Benefits to be Considered Following Completion of the Stock Offering
      Following the stock offering, SP Bancorp, Inc. intends to adopt a new stock-based incentive plan that will provide for grants of stock
options and restricted common stock awards. Applicable regulations require that if we were to adopt such a plan within one year after the
Conversion, the number of shares of common stock reserved for issuance pursuant to stock options and restricted stock awards may not exceed
10% and 4%, respectively, of the shares issued in the offering. These 10% and 4% limitations will not apply if the plan is implemented more
than one year after the conversion.

      The stock-based incentive plan will not be established sooner than six months after the stock offering and, if adopted within one year after
the stock offering, would require the approval by stockholders owning a majority of the outstanding shares of SP Bancorp, Inc. common stock
eligible to be cast. If the stock-based incentive plan is established after one year after the stock offering, it would require the approval of our
stockholders by a majority of votes cast.

     The following additional restrictions would apply to our stock-based incentive plan only if the plan is adopted within one year of the
consummation of the conversion and stock offering:
        •    non-employee directors in the aggregate may not receive more than 30% of the options and restricted stock awards authorized
             under the plan;
        •    any non-employee director may not receive more than 5% of the options and restricted stock awards authorized under the plan;
        •    any officer or employee may not receive more than 25% of the options and restricted stock awards authorized under the plan;
        •    the options and restricted stock awards may not vest more rapidly than 20% per year, beginning on the first anniversary of
             stockholder approval of the plan; and
        •    accelerated vesting is not permitted except for death, disability or upon a change in control of SharePlus Federal Bank or SP
             Bancorp, Inc.

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These restrictions do not apply to plans adopted after one year following the completion of the stock offering.
      We have not yet determined whether we will present the stock-based incentive plan for stockholder approval within one year or more
than one year following the completion of the conversion. In the event of changes in applicable regulations or policies regarding stock-based
incentive plans, including any regulations or policies restricting the size of awards and vesting of benefits as described above, the restrictions
described above may not be applicable.

      We may obtain the shares needed for our stock-based benefit plans by issuing additional shares of common stock from authorized but
unissued shares or through stock repurchases.

Transactions with Certain Related Persons
      The Sarbanes-Oxley Act of 2002 generally prohibits us from making loans to our executive officers and directors, but it contains a
specific exemption from such prohibition for loans made by SharePlus Federal Bank to our executive officers and directors in compliance with
federal banking regulations. At March 31, 2010, all of our loans to directors and executive officers were made in the ordinary course of
business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans
to persons not related to SharePlus Federal Bank, and did not involve more than the normal risk of collectability or present other unfavorable
features.

      In addition, loans made to a director or executive officer must be approved in advance by a majority of the disinterested members of the
board of directors if the loan amount is greater than 5% of SharePlus Federal Bank’s capital, up to a maximum of $500,000. The aggregate
amount of our loans to our executive officers and directors and their related entities was $1.6 million at March 31, 2010. As of March 31, 2010,
these loans were performing according to their original terms and were made in compliance with federal banking regulations.

                                    SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS

      The following table sets forth information regarding intended common stock subscriptions by each of the directors and executive officers
of SharePlus Federal Bank and their associates, and by all directors and executive officers as a group. However, there can be no assurance that
any individual director or executive officer, or the directors and executive officers as a group, will purchase any specific number of shares of
our common stock. In the event the individual maximum purchase limitation is increased, persons subscribing for the maximum amount may
increase their purchase order. Directors and executive officers will purchase shares of common stock at the same $10.00 purchase price per
share and on the same terms as other purchasers in the offering. This table excludes shares of common stock to be purchased by the employee
stock ownership plan, as well as any stock awards or stock option grants that may be made no earlier than six months after the completion of
the offering. The directors and officers have indicated their intention to subscribe in the offering for an aggregate of 209,500 shares of common
stock (for a total subscription amount of $2,095,000), which is equal to 16.4% of the shares of common stock to be sold in the offering at the
minimum of the offering range. The shares being acquired by the directors, executive officers and their associates are being acquired for
investment purposes, and not with a view towards resale.

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                                                                                                               Percent at
                                                                            Number            Aggregate       Minimum of
Name and Title                                                              of Shares       Purchase Price   Offering Range
Paul Zmigrosky, Chairman of the Board                                        30,000     $         300,000               2.4 %
Richard Holland, Vice Chairman of the Board                                   5,000                50,000                 *
Christopher Cozby, Director                                                  40,000               400,000               3.1
Carl Forsythe, Director                                                      25,000               250,000               2.0
P. Stan Keith, Director                                                       5,000                50,000                 *
David Rader, Director                                                        20,000               200,000               1.6
David Stephens, Director                                                     15,000               150,000               1.2
Jeffrey Weaver, President and Chief Executive Officer and Director           17,500               175,000               1.4
Jeff Williams, Director                                                      40,000               400,000               3.1
Gaye Rowland, Senior Vice President – Retail Lending                          1,500                15,000                 *
Suzanne C. Salls, Senior Vice President and Chief Financial Officer           7,500                75,000                 *
Jerry Sanders, Senior Vice President – Commercial Lending                     3,000                30,000                 *
All directors and executive officers as a group (12 persons)                209,500     $       2,095,000              16.4 %



* Less than 1%.

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                                              THE CONVERSION; PLAN OF DISTRIBUTION

     The board of directors of SharePlus Federal Bank has approved the plan of conversion. The plan of conversion must also be approved by
SharePlus Federal Bank’s members. A special meeting of members has been called for this purpose. The Office of Thrift Supervision has
conditionally approved the plan of conversion; however, such approval does not constitute a recommendation or endorsement of the plan of
conversion by that agency.

General
      The board of directors of SharePlus Federal Bank approved the plan of conversion on April 1, 2010. Pursuant to the plan of conversion,
SharePlus Federal Bank will convert from the mutual form of organization to the fully stock form. In the conversion, we will organize a new
Maryland stock holding company named SP Bancorp, Inc. which will sell shares of common stock to the public in an initial public stock
offering. When the conversion is completed, all of the capital stock of SharePlus Federal Bank will be owned by SP Bancorp, Inc., and all of
the common stock of SP Bancorp, Inc. will be owned by public stockholders.

      We intend to retain between $11.5 million and $15.9 million of the net proceeds of the offering, or $18.5 million if the offering range is
increased by 15%, and to contribute the balance of the net proceeds to SharePlus Federal Bank. The conversion will be consummated only
upon the issuance of at least 1,275,000 shares of our common stock offered pursuant to the plan of conversion.

      The plan of conversion provides that we will offer shares of common stock for sale in the subscription offering to eligible account
holders, our tax-qualified employee benefit plans, including our employee stock ownership plan and 401(k) plan, supplemental eligible account
holders and other members. If all shares are not subscribed for in the subscription offering, we may, in our discretion, offer common stock for
sale in a community offering to members of the general public, with a preference given to natural persons residing in the Texas counties of
Dallas, Collin, Denton, Rockwall, Hunt, Kaufman, Ellis, Tarrant, Grayson and Fannin, the California county of Orange and the Kentucky
county of Jefferson. In addition, all shares of common stock not purchased in the subscription offering and community offering may be offered
for sale to the general public in a syndicated community offering to be managed by Sandler O’Neill & Partners, L.P., acting as our agent.

      We have the right to accept or reject, in whole or in part, any orders to purchase shares of the common stock received in the community
or syndicated community offering. The community offering or syndicated community, if any, may begin at the same time as, during, or after
the subscription offering, and must be completed within 45 days after the completion of the subscription offering unless otherwise extended by
us with the approval of the Office of Thrift Supervision. See ―—Community Offering.‖

      We determined the number of shares of common stock to be offered in the offering based upon an independent valuation of the estimated
consolidated pro forma market value of SP Bancorp, Inc. All shares of common stock to be sold in the offering will be sold at $10.00 per share.
Investors will not be charged a commission to purchase shares of common stock. The independent valuation will be updated and the final
number of the shares of common stock to be issued in the offering will be determined at the completion of the offering. See ―—Determination
of Share Price and Number of Shares to be Issued‖ for more information as to the determination of the estimated pro forma market value of the
common stock.

     The following is a brief summary of the conversion. We recommend reading the plan of conversion in its entirety for more information.
A copy of the plan of conversion is available for inspection at each branch office of SharePlus Federal Bank and at the Western Regional
Office and the

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Washington, D.C. Office of the Office of Thrift Supervision. The plan of conversion is also filed as an exhibit to SharePlus Federal Bank’s
application to convert from mutual to stock form of which this prospectus is a part, copies of which may be obtained from the Office of Thrift
Supervision. See ―Where You Can Find Additional Information.‖

Reasons for the Conversion
      Our primary reasons for converting and raising additional capital through the offering are:
        •    to increase our capital to support future growth;
        •    to have greater flexibility to structure and finance the expansion of our operations, including potential cash or stock acquisitions of
             other financial institutions, although we have no current arrangements or agreements with respect to any such acquisitions;
        •    to provide better capital management tools, including the ability to pay dividends and to repurchase shares of our common stock,
             subject to market conditions; and
        •    to attract and retain qualified personnel by establishing stock-based benefit plans for management and employees.

       In the stock holding company structure, we will have greater flexibility in structuring mergers and acquisitions. Our current mutual
structure prevents us from offering shares of our common stock as consideration for a merger or acquisition. Potential sellers often want stock
for at least part of the acquisition consideration. Our new stock holding company structure will enable us to offer stock or cash consideration,
or a combination thereof, and will therefore enhance our ability to compete with other bidders when acquisition opportunities arise.

      We have no current arrangements or agreements to acquire other banks, thrifts, financial service companies or branch offices.

     We believe that the additional capital raised in the offering may enable us to take advantage of business opportunities that may not
otherwise be available to us. We are not subject to a directive or a recommendation from the Office of Thrift Supervision to raise capital.

Approvals Required
      The affirmative vote of a majority of the total eligible votes of members of SharePlus Federal Bank at the special meeting of members is
required to approve the plan of conversion. The plan of conversion also must be approved by the Office of Thrift Supervision, which has given
its conditional approval to the plan of conversion.

      A special meeting of members to consider and vote upon the plan of conversion has been set for ______________, 2010.

Effects of Conversion on Depositors, Borrowers and Members
      Continuity . While the conversion is being accomplished, our normal business of accepting deposits and making loans will continue
without interruption. We will continue to be a federally chartered savings bank and will continue to be regulated by the Office of Thrift
Supervision. After the conversion, we will continue to offer existing services to depositors, borrowers and other customers. The directors
serving SharePlus Federal Bank at the time of the conversion will be the directors of SharePlus Federal Bank and of SP Bancorp, Inc. after the
conversion.

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      Effect on Deposit Accounts . Pursuant to the plan of conversion, each depositor of SharePlus Federal Bank at the time of the conversion
will automatically continue as a depositor after the conversion, and the deposit balance, interest rate and other terms of such deposit accounts
will not change as a result of the conversion. Each such account will be insured by the Federal Deposit Insurance Corporation to the same
extent as before the conversion. Depositors will continue to hold their existing certificates, passbooks and other evidences of their accounts.

     Effect on Loans . No loan outstanding from SharePlus Federal Bank will be affected by the conversion, and the amount, interest rate,
maturity and security for each loan will remain as it was contractually fixed prior to the conversion.

      Effect on Voting Rights of Members . At present, all of our depositors are members of, and have voting rights in, SharePlus Federal
Bank as to all matters requiring membership action. Upon completion of the conversion, depositors will cease to be members of SharePlus
Federal Bank and will no longer have voting rights. Upon completion of the conversion, all voting rights in SharePlus Federal Bank will be
vested in SP Bancorp, Inc. as the sole stockholder of SharePlus Federal Bank. The stockholders of SP Bancorp, Inc. will possess exclusive
voting rights with respect to SP Bancorp, Inc. common stock.

     Tax Effects . We will receive an opinion of counsel or tax advisor with regard to federal and state income tax consequences of the
conversion to the effect that the conversion will not be taxable for federal or state income tax purposes to SharePlus Federal Bank or its
members. See ―—Material Income Tax Consequences.‖

       Effect on Liquidation Rights . Each depositor in SharePlus Federal Bank has both a deposit account in SharePlus Federal Bank and a pro
rata ownership interest in the net worth of SharePlus Federal Bank based upon the deposit balance in his or her account. This ownership interest
is tied to the depositor’s account and has no tangible market value separate from the deposit account. This interest may only be realized in the
event of a complete liquidation of SharePlus Federal Bank. Any depositor who opens a deposit account obtains a pro rata ownership interest in
SharePlus Federal Bank without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his or her
account receives a portion or all, respectively, of the balance in the deposit account but nothing for his or her ownership interest in the net
worth of SharePlus Federal Bank, which is lost to the extent that the balance in the account is reduced or closed.

      Consequently, depositors in a mutual savings bank normally have no way of realizing the value of their ownership interest, which has
realizable value only in the unlikely event that the savings bank is completely liquidated. If this occurs, the depositors of record at that time, as
owners, would share pro rata in any residual surplus and reserves of SharePlus Federal Bank after other claims, including claims of depositors
to the amounts of their deposits, are paid.

       In the unlikely event that SharePlus Federal Bank were to liquidate after the conversion, all claims of creditors, including those of
depositors, also would be paid first, followed by distribution of a ―liquidation account‖ to depositors as of March 31, 2009 and
_______________ who continue to maintain their deposit accounts as of the date of liquidation, with any assets remaining thereafter distributed
to SP Bancorp, Inc. as the holder of SharePlus Federal Bank’s capital stock. Pursuant to the rules and regulations of the Office of Thrift
Supervision, a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings
institution would not be considered a liquidation and, in such a transaction, the liquidation account would be assumed by the surviving
institution. See ―—Liquidation Rights.‖

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Determination of Share Price and Number of Shares to be Issued
       The plan of conversion and federal regulations require that the aggregate purchase price of the common stock sold in the offering be
based on the appraised pro forma market value of the common stock, as determined by an independent valuation. We have retained RP
Financial, LC. to prepare an independent valuation appraisal. For its services in preparing the initial valuation, RP Financial, LC. will receive a
fee of $35,000, and will be reimbursed for its expenses. RP Financial, LC. will receive an additional fee of $5,000 for each update to the
valuation appraisal. We have agreed to indemnify RP Financial, LC. and its employees and affiliates against specified losses, including any
losses in connection with claims under the federal securities laws, arising out of its services as independent appraiser, except where such
liability results from its negligence or bad faith.

      The independent valuation appraisal considered the pro forma impact of the offering. Consistent with the Office of Thrift Supervision
appraisal guidelines, the appraisal applied three primary methodologies: the pro forma price-to-book value approach applied to both reported
book value and tangible book value; the pro forma price-to-earnings approach applied to reported and core earnings; and the pro forma
price-to-assets approach. The market value ratios applied in the three methodologies were based upon the current market valuations of the peer
group companies identified by RP Financial, LC., subject to valuation adjustments applied by RP Financial, LC. to account for differences
between us and our peer group.

      The independent valuation was prepared by RP Financial, LC. in reliance upon the information contained in this prospectus, including
our financial statements. RP Financial, LC. also considered the following factors, among others:
        •    our present and projected operating results and financial condition;
        •    the economic and demographic conditions in our existing market area;
        •    certain historical, financial and other information relating to us;
        •    a comparative evaluation of our operating and financial characteristics with those of other similarly situated publicly traded savings
             institutions;
        •    the impact of the conversion and the offering on our equity and earnings potential;
        •    our potential to pay cash dividends; and
        •    the trading market for securities of comparable institutions and general conditions in the market for such securities.

      Included in the independent valuation were certain assumptions as to our pro forma earnings after the conversion that were utilized in
determining the appraised value. These assumptions included estimated expenses, an assumed after-tax rate of return on the net offering
proceeds and purchases in the open market of 4% of the common stock issued in the offering by the stock-based benefit plan at the $10.00
purchase price. See ―Pro Forma Data‖ for additional information concerning these assumptions. The use of different assumptions may yield
different results.

      The independent valuation states that as of May 28, 2010, the estimated pro forma market value of SP Bancorp, Inc. ranged from $12.8
million to $17.3 million, with a midpoint of $15.0 million. Our board of directors decided to offer the shares of common stock for a price of
$10.00 per share primarily because it is the price most commonly used in mutual-to-stock conversions of financial institutions. The

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number of shares offered will be equal to the aggregate offering price of the shares divided by the price per share. Based on the valuation range
and the $10.00 price per share, the minimum of the offering range will be 1,275,000 shares, the midpoint of the offering range will be
1,500,000 shares and the maximum of the offering range will be 1,725,000 shares, or 1,983,750 shares if the maximum amount is adjusted
because of demand for shares or changes in market conditions.

      The following table presents a summary of selected pricing ratios for SP Bancorp, Inc. and our peer group companies identified by RP
Financial, LC. Pro forma price-to-earnings multiple is based on earnings for the 12 months ended March 31, 2010 and pro forma price-to-book
value and price-to-tangible book value ratios are based on equity as of March 31, 2010. Compared to the median pricing of the peer group, our
pro forma pricing ratios at the maximum of the offering range indicated a discount of 17.5% on a price-to-book basis and a discount of 21.4%
on a price-to-tangible book basis. The pricing ratios result from our generally having higher levels of equity but lower earnings than the
companies in the peer group on a pro forma basis. Our board of directors, in reviewing and approving the valuation, considered the range of
price-to-core earnings multiples, the range of price-to-book value ratios and price-to-tangible book value ratios at the different ranges of shares
to be sold in the offering.

                                                                  Price-to-earnings         Price-to-book            Price-to-tangible
                                                                      multiple               value ratio             book value ratio
            SP Bancorp, Inc. (pro forma) (1)
                Maximum, as adjusted                                             NM *              59.92 %                       59.92 %
                Maximum                                                          NM *              55.90 %                       55.90 %
                Minimum                                                          NM *              47.28 %                       47.28 %
            Valuation of peer group companies
              using stock prices as of May 28, 2010
                Averages                                                     14.61x                69.06 %                       72.27 %
                Medians                                                      12.07x                67.77 %                       71.12 %

*     Not meaningful
(1)   Based on earnings for the twelve months ended March 31, 2010 and book value as of March 31, 2010.

      Our board of directors reviewed the independent valuation and, in particular, considered the following:
        •    our financial condition and results of operations;
        •    comparison of our financial performance ratios to those of other financial institutions of similar size; and
        •    market conditions generally and, in particular, for financial institutions.

      All of these factors are set forth in the independent valuation. Our board of directors also reviewed the methodology and the assumptions
used by RP Financial, LC. in preparing the independent valuation and believes that such assumptions were reasonable. The offering range may
be amended with the approval of the Office of Thrift Supervision, if required, as a result of subsequent developments in our financial condition
or market conditions generally. In the event the independent valuation is updated to amend our pro forma market value to less than $12.8
million or more than $19.8 million, the appraisal will be filed with the Securities and Exchange Commission by a post-effective amendment to
our registration statement.

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      The independent valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of
purchasing shares of our common stock. RP Financial, LC. did not independently verify our financial statements and other
information that we provided to them, nor did RP Financial, LC. independently value our assets or liabilities. The independent
valuation considers SharePlus Federal Bank as a going concern and should not be considered as an indication of the liquidation value
of SharePlus Federal Bank. Moreover, because the valuation is necessarily based upon estimates and projections of a number of
matters, all of which may change from time to time, no assurance can be given that persons purchasing our common stock in the
offering will thereafter be able to sell their shares at prices at or above the $10.00 offering price per share.

      Following commencement of the subscription offering, the maximum of the valuation range may be increased by up to 15%, or up to
$19.8 million, without resoliciting subscribers, which would result in a corresponding increase of up to 15% in the maximum of the offering
range to up to 1,983,750 shares, to reflect changes in the market and financial conditions or demand for the shares. We will not decrease the
minimum of the valuation range and the minimum of the offering range without a resolicitation of subscribers. The subscription price of $10.00
per share will remain fixed. See ―—Limitations on Common Stock Purchases‖ as to the method of distribution and allocation of additional
shares that may be issued in the event of an increase in the offering range to fill unfilled orders in the offering.

      If the update to the independent valuation at the conclusion of the offering results in an increase in the maximum of the valuation range to
more than $19.8 million and a corresponding increase in the offering range to more than 1,983,750 shares, or a decrease in the minimum of the
valuation range to less than $12.8 million and a corresponding decrease in the offering range to fewer than 1,275,000 shares, then we may
promptly return with interest at our current passbook savings rate of interest all funds previously delivered to us to purchase shares of common
stock and cancel deposit account withdrawal authorizations, and, after consulting with the Office of Thrift Supervision, we may terminate the
plan of conversion. Alternatively, we may hold a new offering, establish a new offering range, extend the offering period and commence a
resolicitation of subscribers or take other actions as permitted by the Office of Thrift Supervision in order to complete the conversion and the
offering. In the event that a resolicitation is commenced, we will notify subscribers of the extension of time and of the rights of subscribers to
place a new stock order for a specified period of time. If a person does not respond, we will cancel his or her stock order and return his or her
subscription funds, with interest, and cancel any authorization to withdraw funds from deposit accounts for the purchase of shares of common
stock. Any resolicitation following the conclusion of the subscription and community offerings would not exceed 45 days unless further
extended by the Office of Thrift Supervision for periods of up to 90 days.

      An increase in the number of shares to be issued in the offering would decrease both a subscriber’s ownership interest and our pro forma
earnings and stockholders’ equity on a per share basis while increasing pro forma earnings and stockholders’ equity on an aggregate basis. A
decrease in the number of shares to be issued in the offering would increase both a subscriber’s ownership interest and our pro forma earnings
and stockholders’ equity on a per share basis, while decreasing pro forma earnings and stockholders’ equity on an aggregate basis. For a
presentation of the effects of these changes, see ―Pro Forma Data.‖

     Copies of the independent valuation appraisal report of RP Financial, LC. and the detailed memorandum setting forth the method and
assumptions used in the appraisal report are available for inspection at our main office and as specified under ―Where You Can Find Additional
Information.‖

Subscription Offering and Subscription Rights
       In accordance with the plan of conversion, rights to subscribe for shares of common stock in the subscription offering have been granted
in the following descending order of priority. The filling of all subscriptions that we receive will depend on the availability of common stock
after satisfaction of all subscriptions of all persons having prior rights in the subscription offering and to the maximum, minimum and overall
purchase limitations set forth in the plan of conversion and as described below under ―—Limitations on Common Stock Purchases.‖

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      Priority 1: Eligible Account Holders . Each depositor with aggregate deposit account balances of $50.00 or more (a ―Qualifying
Deposit‖) on March 31, 2009 (an ―Eligible Account Holder‖) will receive, without payment therefor, nontransferable subscription rights to
purchase, subject to the overall purchase limitations, up to the greater of 25,000 shares of our common stock, 0.10% of the total number of
shares of common stock issued in the offering, or 15 times the number of subscription shares offered multiplied by a fraction of which the
numerator is the aggregate Qualifying Deposit account balances of the Eligible Account Holder and the denominator is the aggregate
Qualifying Deposit account balances of all Eligible Account Holders, subject to the overall purchase limitations. See ―—Limitations on
Common Stock Purchases.‖ If there are not sufficient shares available to satisfy all subscriptions, shares will first be allocated so as to permit
each Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares or
the number of shares for which he or she subscribed. Thereafter, unallocated shares will be allocated to each Eligible Account Holder whose
subscription remains unfilled in the proportion that the amount of his or her Qualifying Deposit bears to the total amount of Qualifying
Deposits of all subscribing Eligible Account Holders whose subscriptions remain unfilled. If an amount so allocated exceeds the amount
subscribed for by any one or more Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those
Eligible Account Holders whose subscriptions are not fully satisfied until all available shares have been allocated.

       To ensure proper allocation of shares of our common stock, each Eligible Account Holder must list on his or her stock order and
certification form all deposit accounts in which he or she has an ownership interest on March 31, 2009. In the event of oversubscription, failure
to list an account could result in fewer shares being allocated than if all accounts had been disclosed. In the event of an oversubscription, the
subscription rights of Eligible Account Holders who are also our directors or executive officers or their associates will be subordinated to the
subscription rights of other Eligible Account Holders to the extent attributable to increased deposits during the year preceding March 31, 2009.

      Priority 2: Tax-Qualified Plans . Our tax-qualified employee benefit plans, including our employee stock ownership plan and 401(k)
plan, will receive, without payment therefor, nontransferable subscription rights to purchase in the aggregate up to 10% of the shares of
common stock sold in the offering. Our employee stock ownership plan intends to purchase up to 8% of the shares of common stock in the
offering with the remaining shares in this purchase priority allocated to our 401(k) plan and any other tax-qualified employee benefit plan.

      Priority 3: Supplemental Eligible Account Holders . To the extent that there are sufficient shares of common stock remaining after
satisfaction of subscriptions by Eligible Account Holders and our tax-qualified employee benefit plans, each depositor with a Qualifying
Deposit on [supplemental date] who is not an Eligible Account Holder (―Supplemental Eligible Account Holder‖) will receive, without
payment therefor, nontransferable subscription rights to purchase up to the greater of 25,000 shares of common stock, 0.10% of the total
number of shares of common stock issued in the offering, or 15 times the number of subscription shares offered multiplied by a fraction of
which the numerator is the aggregate Qualifying Deposit account balances of the Supplemental Eligible Account Holder and the denominator is
the aggregate Qualifying Deposit account balances of all Supplemental Eligible Account Holders, subject to the overall purchase limitations.
See ―—Limitations on Common Stock Purchases.‖ If there are not sufficient shares available to satisfy all subscriptions, shares will be
allocated so as to permit each Supplemental Eligible Account Holder to purchase a number of shares sufficient to make his or her total
allocation equal to the lesser of 100 shares of common stock or the number of shares for which he or she subscribed. Thereafter, unallocated
shares will be allocated to each Supplemental Eligible Account Holder whose subscription remains unfilled in the proportion that the amount of
his or her Qualifying

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Deposit bears to the total amount of Qualifying Deposits of all Supplemental Eligible Account Holders whose subscriptions remain unfilled. If
an amount so allocated exceeds the amount subscribed for by any one or more Supplemental Eligible Account Holders, the excess shall be
reallocated (one or more times as necessary) among those Supplemental Eligible Account Holders whose subscriptions are not fully satisfied
until all available shares have been allocated.

     To ensure proper allocation of common stock, each Supplemental Eligible Account Holder must list on the stock order and certification
form all deposit accounts in which he or she has an ownership interest at [supplemental date]. In the event of oversubscription, failure to list an
account could result in fewer shares being allocated than if all accounts had been disclosed.

       Priority 4: Other Members . To the extent that there are shares of common stock remaining after satisfaction of subscriptions by Eligible
Account Holders, our tax-qualified employee benefit plans and Supplemental Eligible Account Holders, each depositor on the voting record
date of [other member date] who is not an Eligible Account Holder or Supplemental Eligible Account Holder (―Other Members‖) will receive,
without payment therefor, nontransferable subscription rights to purchase up to the greater of 25,000 shares of common stock or 0.10% of the
total number of shares of common stock issued in the offering, subject to the overall purchase limitations. See ―—Limitations on Common
Stock Purchases.‖ If there are not sufficient shares available to satisfy all subscriptions, available shares will be allocated so as to permit each
Other Member to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares of common stock or
the number of shares for which he or she subscribed. Thereafter, unallocated shares will be allocated to each Other Member whose subscription
remains unfilled in the proportion that the amount of his or her subscription bears to the total amount of subscriptions of all Other Members
whose subscriptions remain unfilled.

      Expiration Date . The Subscription Offering will expire at 4:00 p.m., Dallas Time, on [expiration date], unless extended by us for up to
45 days or such additional periods with the approval of the Office of Thrift Supervision, if necessary. Subscription rights will expire whether or
not each eligible depositor can be located. We may decide to extend the expiration date of the subscription offering for any reason, whether or
not subscriptions have been received for shares at the minimum, midpoint or maximum of the offering range. Subscription rights that have not
been exercised prior to the expiration date will become void.

      We will not execute orders until we have received orders to purchase at least the minimum number of shares of common stock. If we
have not received orders to purchase at least 1,275,000 shares within 45 days after the expiration date and the Office of Thrift Supervision has
not consented to an extension, all funds delivered to us to purchase shares of common stock in the offering will be returned promptly to the
subscribers with interest at our current passbook savings rate and all deposit account withdrawal authorizations will be canceled. If an
extension beyond [extension date] is granted by the Office of Thrift Supervision, we will resolicit subscribers, giving them an opportunity to
change or cancel their orders. We will notify subscribers of the extension of time and of the rights of subscribers to place a new stock order for
a specified period of time. If a subscriber does not respond, we will cancel his or her stock order and return his or her subscription funds, with
interest, and cancel any authorization to withdraw funds from deposit accounts for the purchase of shares of common stock. Extensions may
not go beyond [final date], which is two years after the special meeting of our members to vote on the conversion.

Community Offering
      To the extent that shares of common stock remain available for purchase after satisfaction of all subscriptions of the Eligible Account
Holders, our tax-qualified employee benefit plans, Supplemental Eligible Account Holders and Other Members, we may offer shares pursuant
to the plan of conversion to

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members of the general public in a community offering. Shares may be offered with a preference to natural persons residing in the Texas
counties of Dallas, Collin, Denton, Rockwall, Hunt, Kaufman, Ellis, Tarrant, Grayson and Fannin, the California county of Orange and the
Kentucky county of Jefferson (collectively, the ―Community‖).

      Purchasers in the community offering may purchase up to 25,000 shares of common stock, subject to the overall purchase limitations. See
―—Limitations on Common Stock Purchases.‖ The opportunity to purchase shares of common stock in the community offering category
is subject to our right, in our sole discretion, to accept or reject any such orders in whole or in part either at the time of receipt of an
order or as soon as practicable following the expiration date of the offering.

      If we do not have sufficient shares of common stock available to fill the orders of natural persons residing in the Community, we will
allocate the available shares among those persons in a manner that permits each of them, to the extent possible, to purchase the lesser of 100
shares, or the number of shares subscribed for by such person. Thereafter, unallocated shares will be allocated among natural persons residing
in the Community, whose orders remain unsatisfied on an equal number of shares basis per order. If, after the allocation of shares to natural
persons residing in the Community, we do not have sufficient shares of common stock available to fill the orders of other members of the
general public, we will allocate the available shares among those persons in a manner that permits each of them, to the extent possible, to
purchase the lesser of 100 shares, or the number of shares ordered by such person. Thereafter, unallocated shares will be allocated among
members of the general public whose orders remain unsatisfied up to a maximum of 2% of the shares sold in the offering, and thereafter any
remaining shares will be allocated on an equal number of shares basis per order.

      The term ―residing‖ or ―resident‖ as used in this prospectus means any person who occupies a dwelling within the Community, has a
present intent to remain within the Community for a period of time and manifests the genuineness of that intent by establishing an ongoing
physical presence within the Community, together with an indication that this presence within the Community is something other than merely
transitory in nature. We may utilize deposit or loan records or other evidence provided to us to decide whether a person is a resident. In all
cases, however, the determination shall be in our sole discretion.

      Expiration Date. The community offering may begin at the same time as, during or after the subscription offering. It is currently
expected to terminate at the same time as the subscription offering, although it must terminate no more than 45 days following the subscription
offering. We may decide to extend the community offering for any reason and are not required to give purchasers notice of any such extension
unless such period extends beyond [extension date]. If an extension beyond [extension date] is granted by the Office of Thrift Supervision, we
will resolicit persons whose orders we accept in the community offering, giving them an opportunity to change or cancel their orders. If a
person does not respond, we will cancel his or her stock order and return purchase funds, with interest, and cancel any authorization to
withdraw funds from deposit accounts for the purchase of shares of common stock. These extensions may not go beyond [final date], which is
two years after the special meeting of our members to vote on the conversion.

Syndicated Community Offering
      The plan of conversion provides that, if necessary, all shares of common stock not purchased in the subscription offering and community
offering may be offered for sale to the general public in a syndicated community offering to be managed by Sandler O’Neill & Partners, L.P.,
acting as our agent. In such capacity, Sandler O’Neill & Partners, L.P. may form a syndicate of other broker-dealers. Neither Sandler O’Neill &
Partners, L.P. nor any registered broker-dealer will have any obligation to take or purchase any shares of common stock in the syndicated
community offering; however, Sandler O’Neill &

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Partners, L.P. has agreed to use its best efforts in the sale of shares in any syndicated community offering. The syndicated community offering
would terminate no later than [extension date], unless extended by us, with approval of the Office of Thrift Supervision. See ―—Community
Offering‖ above for a discussion of rights of persons who place orders in the syndicated community offering in the event an extension is
granted.

       The opportunity to order shares of common stock in the syndicated community offering is subject to our right to reject orders, in whole or
in part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in
part, you will not have the right to cancel the remainder of your order. Purchasers in the syndicated community offering are eligible to purchase
up to 25,000 shares of common stock, subject to the overall purchase limitations. See ―—Limitations on Common Stock Purchases.‖ Unless the
Office of Thrift Supervision permits otherwise, accepted orders for SP Bancorp, Inc. common stock in the syndicated community offering will
first be filled up to a maximum of two percent (2%) of the shares sold in the offering, and thereafter any remaining shares will be allocated on
an equal number of shares basis per order until all shares have been allocated. We may begin the syndicated community offering at any time
following the commencement of the subscription offering.

      If we are unable to find purchasers from the general public for all unsubscribed shares, we will make other purchase arrangements, if
feasible. Other purchase arrangements must be approved by the Office of Thrift Supervision. If other purchase arrangements cannot be made,
we may do any of the following: terminate the offering and promptly return all funds; set a new offering range, notify all subscribers and give
them the opportunity to confirm, cancel or change their orders; or take such other actions as may be permitted by the Office of Thrift
Supervision.

Limitations on Common Stock Purchases
      The plan of conversion includes the following limitations on the number of shares of common stock that may be purchased in the
offering:
        •    No person or entity together with any associate or group of persons acting in concert may purchase more than 40,000 shares of
             common stock in the offering, except that our tax-qualified employee benefit plans, including our employee stock ownership plan
             and 401(k) plan, may purchase in the aggregate up to 10% of the shares of common stock issued in the offering (including shares
             issued in the event of an increase in the offering range of up to 15%);
        •    The maximum number of shares of common stock that may be purchased in all categories of the offering by our executive officers
             and directors and their associates, in the aggregate, may not exceed 31% of the shares issued in the offering; and
        •    The minimum purchase by each person purchasing shares in the offering is 25 shares, to the extent those shares are available.

      Depending upon market or financial conditions, with the receipt of any required approvals of the OTS, the maximum number of shares of
common stock that may be subscribed for or purchased in the offering by any person or entity together with any associate or group of persons
acting in concert, may be increased to an amount not to exceed 5.0% of the outstanding shares of our common stock at the completion of the
offering (excluding our employee stock ownership plan and 401(k) Plan).

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      Depending upon market or financial conditions, our board of directors, with the approval of the Office of Thrift Supervision and without
further approval of our members, may decrease or increase the purchase limitations. If a purchase limitation is increased, subscribers in the
subscription offering who ordered the maximum amount will be, and, in our sole discretion, some other large subscribers may be given the
opportunity to increase their subscriptions up to the then-applicable limit. The effect of this type of resolicitation would be an increase in the
number of shares of common stock owned by subscribers who choose to increase their subscriptions.

      In the event of an increase in the offering range of up to 15% of the total number of shares of common stock offered in the offering,
shares will be allocated in the following order of priority in accordance with the plan of conversion:
      (1)    to fill our tax-qualified employee benefit plans’ subscriptions for up to 10% of the total number of shares of common stock issued
             in the offering;
      (2)    in the event that there is an oversubscription at the Eligible Account Holder, Supplemental Eligible Account Holder or Other
             Member levels, to fill unfulfilled subscriptions of these subscribers according to their respective priorities; and
      (3)    to fill unfulfilled subscriptions in the community offering, with preference given first to natural persons residing in the Texas
             counties of Collin, Dallas, Delta, Denton, Ellis, Hunt, Hood, Kaufman, Johnson, Rockwall, Parker, Tarrant and Wise.

      The term ―associate‖ of a person means:
      (1)    any corporation or organization, other than SharePlus Federal Bank, SP Bancorp, Inc. or a majority-owned subsidiary of these
             entities, of which the person is a senior officer, partner or 10% beneficial stockholder;
      (2)    any trust or other estate in which the person has a substantial beneficial interest or serves as a trustee or in a fiduciary capacity,
             excluding any employee stock benefit plan in which the person has a substantial beneficial interest or serves as trustee or in a
             fiduciary capacity; and
      (3)    any blood or marriage relative of the person, who either lives in the same home as the person or who is a director or officer of
             SharePlus Federal Bank or SP Bancorp, Inc.

      The term ―acting in concert‖ means:
      (1)    knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not
             pursuant to an express agreement; or
      (2)    a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract,
             understanding, relationship, agreement or other arrangement, whether written or otherwise.

      A person or company that acts in concert with another person or company (―other party‖) shall also be deemed to be acting in concert
with any person or company who is also acting in concert with that other party, except that any tax-qualified employee stock benefit plan will
not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether
common stock held by the trustee and common stock held by the employee stock benefit plan will be aggregated.

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       Our directors are not treated as associates of each other solely because of their membership on the board of directors. We have the right to
determine whether prospective purchasers are associates or acting in concert. Shares of common stock purchased in the offering will be freely
transferable except for shares purchased by our executive officers and directors and except as described below. Any purchases made by any
associate of SharePlus Federal Bank or SP Bancorp, Inc. for the explicit purpose of meeting the minimum number of shares of common stock
required to be sold in order to complete the offering shall be made for investment purposes only and not with a view toward redistribution. In
addition, under the guidelines of the Financial Industry Regulatory Authority, members of the Financial Industry Regulatory Authority and
their associates are subject to certain restrictions on transfer of securities purchased in accordance with subscription rights and to certain
reporting requirements upon purchase of these securities. For a further discussion of limitations on purchases of shares of our common stock at
the time of conversion and thereafter, see ―—Restrictions on Purchase or Transfer of Our Shares After Conversion‖ and ―Restrictions on
Acquisition of SP Bancorp, Inc.‖

Marketing and Distribution; Compensation
    Offering materials have been initially distributed to certain persons by mail, with additional copies made available through our
Conversion Center.

      We have engaged Sandler O’Neill & Partners, L.P., a broker-dealer registered with the Financial Industry Regulatory Authority, as a
financial advisor in connection with the offering of our common stock. In its role as financial advisor, Sandler O’Neill & Partners, L.P., will:
        •    provide advice on the financial and securities market implications of the plan of conversion and related corporate documents,
             including our business plan;
        •    assist in structuring our stock offering, including developing and assisting in implementing a market strategy for the stock offering;
        •    review all offering documents, including this prospectus, stock order forms and related offering materials (we are responsible for
             the preparation and filing of such documents);
        •    assist us in preparing for and scheduling meetings with potential investors and broker-dealers, as necessary;
        •    assist us in analyzing proposals from outside vendors retained in connection with the stock offering, including printers, transfer
             agents and appraisal firms;
        •    assist us in the drafting and distribution of press releases as required or appropriate in connection with the stock offering;
        •    meet with the board of directors and management to discuss any of these services; and
        •    provide such other financial advisory and investment banking services in connection with the stock offering as may be agreed upon
             by Sandler O’Neill & Partners, L.P. and us.

      For these services, Sandler O’Neill & Partners, L.P. will receive a fee of 1.50% of the aggregate actual purchase price of the shares of
common stock sold in the subscription offering and direct community offering, if the conversion is consummated, excluding shares purchased
by our directors, officers and employees and members of their immediate families, our employee stock ownership plan and our tax-qualified or
stock-based compensation or similar plans (except individual retirement accounts).

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      The aggregate fees payable to Sandler O’Neill & Partners, L.P. may not be less than $150,000 if the conversion is consummated.

       The plan of conversion provides that, if necessary, all shares of common stock not purchased in the subscription offering and community
offering may be offered for sale to the general public in a syndicated community offering to be managed by Sandler O’Neill & Partners, L.P. In
such capacity, Sandler O’Neill & Partners, L.P. may form a syndicate of other broker-dealers. Neither Sandler O’Neill & Partners, L.P. nor any
registered broker-dealer will have any obligation to take or purchase any shares of common stock in the syndicated community offering;
however, Sandler O’Neill & Partners, L.P. has agreed to use its best efforts in the sale of shares in any syndicated community offering. If there
is a syndicated community offering, Sandler O’Neill & Partners, L.P. will receive a management fee not to exceed 6.5% of the aggregate dollar
amount of the common stock sold in the syndicated community offering. This fee will include the success fees earned by Sandler O’Neill &
Partners, L.P. in connection with the subscription and community offerings set forth above. Of this amount, Sandler O’Neill & Partners, L.P.
will pass on to selected broker-dealers, who assist in the syndicated community offering, an amount competitive with gross underwriting
discounts charged at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment.

      We also will reimburse Sandler O’Neill & Partners, L.P. for its reasonable out-of-pocket expenses associated with its marketing effort up
to a maximum of $100,000 (or $125,000 if there is a syndicated community offering), such amounts include fees and expenses of its counsel. If
the plan of conversion is terminated or if Sandler O’Neill & Partners, L.P.’s engagement is terminated in accordance with the provisions of the
agreement, Sandler O’Neill & Partners, L.P. will only receive reimbursement of its reasonable out-of-pocket expenses and will return any
amounts paid or advanced by us in excess of these amounts. We will indemnify Sandler O’Neill & Partners, L.P. against liabilities and
expenses (including legal fees) related to or arising out of Sandler O’Neill & Partners, L.P.’s engagement as our financial advisor and
performance of services as our financial advisor.

     We have also engaged Sandler O’Neill & Partners, L.P. to act as our conversion agent in connection with the stock offering. In its role as
conversion agent, Sandler O’Neill & Partners, L.P. will, among other things:
        •    consolidate accounts and develop a central file;
        •    prepare proxy forms and proxy materials;
        •    tabulate proxies and ballots;
        •    act as inspector of election at the special meeting of members;
        •    assist us in establishing and managing the Conversion Center;
        •    assist our financial printer with labeling of stock offering materials;
        •    process stock order forms and certification forms and produce daily reports and analysis;
        •    assist our transfer agent with the generation and mailing of stock certificates;
        •    advise us on interest and refund calculations; and
        •    create tax forms for interest reporting.

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      For these services, Sandler O’Neill & Partners, L.P. will receive a fee of $20,000, and we have made an advance payment of $10,000 to
Sandler O’Neill & Partners, L.P. with respect to this fee. We also will reimburse Sandler O’Neill & Partners, L.P. for its reasonable
out-of-pocket expenses associated with its acting as conversion agent. If the plan of conversion is terminated or if Sandler O’Neill & Partners,
L.P.’s engagement is terminated in accordance with the provisions of the agreement, Sandler O’Neill & Partners, L.P. will be entitled to the
advance payment and also receive reimbursement of its reasonable out-of-pocket expenses. We will indemnify Sandler O’Neill & Partners,
L.P. against liabilities and expenses (including legal fees) related to or arising out of Sandler O’Neill & Partners, L.P.’s engagement as our
conversion agent and performance of services as our conversion agent.

      Our directors and executive officers may participate in the solicitation of offers to purchase common stock. These persons will be
reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation. Other trained employees of SharePlus
Federal Bank or its affiliates may assist in the offering in ministerial capacities, providing clerical work in effecting a sales transaction or
answering questions of a ministerial nature. No offers or sales may be made by tellers or at the teller counters. All sales activity will be
conducted in a segregated or separately identifiable area of our main office facility apart from the area accessible to the general public. Other
questions of prospective purchasers will be directed to executive officers or registered representatives of Sandler O’Neill & Partners, L.P. Our
other employees have been instructed not to solicit offers to purchase shares of common stock or provide advice regarding the purchase of
common stock. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, as amended, and sales of common stock will be
conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of common stock.
None of our officers, directors or employees will be compensated in connection with their participation in the offering by the payment of
commissions or other remuneration based either directly or indirectly on the transactions in the shares of common stock.

      The offering will comply with the requirements of Rule 10b-9 under the Securities Exchange Act of 1934.

Procedure for Purchasing Shares
      Expiration Date . The offering will expire at 4:00 p.m., Dallas Time, on [expiration date], unless we extend it for up to 45 days. This
extension may be approved by us, in our sole discretion, without further approval or additional notice to purchasers in the offering. Any
extension of the subscription and/or community offering beyond [extension date] would require the Office of Thrift Supervision’s approval. If
an extension beyond [extension date] is granted by the Office of Thrift Supervision, we will resolicit subscribers/persons who place orders,
giving them an opportunity to change or cancel their orders. We will notify these persons of the extension of time and of the rights to place a
new stock order for a specified period of time. If a person does not respond, we will cancel his or her stock order and return his or her
subscription funds, with interest, and cancel any authorization to withdraw funds from deposit accounts for the purchase of shares of common
stock. If we have not received orders to purchase the minimum number of shares offered in the offering by the expiration date or any extension
thereof, we may terminate the offering and promptly refund all funds received for shares of common stock. If the number of shares offered is
reduced below the minimum of the offering range, or increased above the adjusted maximum of the offering range, subscribers may be
resolicited with the approval of the Office of Thrift Supervision.

      To ensure that each purchaser receives a prospectus at least 48 hours before [expiration date], the expiration date of the offering, in
accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, as amended, no prospectus will be mailed any later than five days prior
to the expiration date or hand delivered any later than two days prior to the expiration date. Execution of an order form will confirm

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receipt of delivery in accordance with Rule 15c2-8. Order forms will be distributed only with a prospectus. Subscription funds will be
maintained in a segregated account at SharePlus Federal Bank or at another insured depository institution and will earn interest at our current
passbook savings rate from the date of receipt.

      We reserve the right in our sole discretion to terminate the offering at any time and for any reason, in which case we will cancel any
deposit account withdrawal orders and promptly return all funds delivered to us, with interest at our current passbook savings rate from the date
of receipt.

      We have the right to reject any order submitted in the offering by a person who we believe is making false representations or who we
otherwise believe, either alone or acting in concert with others, is violating, evading, circumventing, or intends to violate, evade or circumvent
the terms and conditions of the plan of conversion.

      Use of Order Forms . In order to purchase shares of common stock in the subscription offering and community offering, you must
complete an order form and remit full payment. We will not be required to accept incomplete order forms, unsigned order forms, orders
submitted on photocopied or facsimiled order forms. We must receive all order forms prior to 4:00 p.m., Dallas Time, on [expiration date]. We
are not required to accept order forms that are not received by that time, are executed defectively or are received without full payment or
without appropriate withdrawal instructions. A postmark prior to [expiration date] will not entitle you to purchase shares of common stock
unless we receive the envelope by [expiration date]. We are not required to notify subscribers of incomplete or improperly executed order
forms. We have the right to permit the correction of incomplete or improperly executed order forms or waive immaterial irregularities. We do
not represent, however, that we will do so and we have no affirmative duty to notify any prospective subscriber of any such defects. You may
submit your order form and payment by mail using the return envelope provided, by bringing your order form to our Conversion Center or to
any branch office or by overnight delivery to the indicated address on the order form. Once tendered, an order form cannot be modified or
revoked without our consent. We reserve the absolute right, in our sole discretion, to reject orders received in the community offering, in whole
or in part, at the time of receipt or at any time prior to completion of the offering. If you are ordering shares, you must represent that you are
purchasing shares for your own account and that you have no agreement or understanding with any person for the sale or transfer of the shares.
Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the order forms will be final, subject to the
authority of the Office of Thrift Supervision.

      By signing the order form, you will be acknowledging that the common stock is not a deposit or savings account and is not federally
insured or otherwise guaranteed by SharePlus Federal Bank or the federal government, and that you received a copy of this prospectus.
However, signing the order form will not result in you waiving your rights under the Securities Act of 1933 or the Securities Exchange Act of
1934.

      Payment for Shares . Payment for all shares of common stock will be required to accompany all completed order forms for the purchase
to be valid. Payment for shares may be made by:
      (1)    personal check, bank check or money order, payable to SP Bancorp, Inc.; or
      (2)    authorization of withdrawal from SharePlus Federal Bank deposit accounts designated on the order form.

     Appropriate means for designating withdrawals from deposit accounts at SharePlus Federal Bank are provided in the order forms. The
funds designated must be available in the account(s) at the time the order form is received. A hold will be placed on these funds, making them
unavailable to the depositor.

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Funds authorized for withdrawal will continue to earn interest within the account at the contract rate until the offering is completed, at which
time the designated withdrawal will be made. Interest penalties for early withdrawal applicable to certificate accounts will not apply to
withdrawals authorized for the purchase of shares of common stock; however, if a withdrawal results in a certificate account with a balance less
than the applicable minimum balance requirement, the certificate will be canceled at the time of withdrawal without penalty and the remaining
balance will be transferred to a savings account and earn interest at our current passbook savings rate subsequent to the withdrawal. In the case
of payments made by check or money order, these funds must be available in the account(s) and will be immediately cashed and placed in a
segregated account at SharePlus Federal Bank and/or another insured depository institution and will earn interest at our current passbook
savings rate from the date payment is received until the offering is completed or terminated.

      You may not use a check drawn on an SharePlus Federal Bank line of credit, and we will not accept third-party checks (a check written
by someone other than you) payable to you and endorsed over to SP Bancorp, Inc. If you request that we place a hold on your checking account
for the subscription amount, we reserve the right to interpret that as your authorization to treat those funds as if we had received a check for the
designated amount, and we will immediately withdraw the amount from your checking account. Once we receive your executed order form, it
may not be modified, amended or rescinded without our consent, unless the offering is not completed by the expiration date, in which event
purchasers may be given the opportunity to increase, decrease or rescind their orders for a specified period of time.

      If you are interested in using your individual retirement account funds to purchase shares of common stock, you must do so through a
self-directed individual retirement account such as a brokerage firm individual retirement account. By regulation, SharePlus Federal Bank’s
individual retirement accounts are not self-directed, so they cannot be invested in shares of our common stock. Therefore, if you wish to use
your funds that are currently in an SharePlus Federal Bank individual retirement account, you may not designate on the order form that you
wish funds to be withdrawn from the account for the purchase of common stock. The funds you wish to use for the purchase of common stock
will have to be transferred to a brokerage account. It may take several weeks to transfer your SharePlus Federal Bank individual retirement
account to an independent trustee, so please allow yourself sufficient time to take this action. There will be no early withdrawal or Internal
Revenue Service interest penalties for these transfers. Depositors interested in using funds in an individual retirement account or any other
retirement account to purchase shares of common stock should contact our Conversion Center as soon as possible, preferably at least two
weeks prior to the end of the offering period, because processing such transactions takes additional time, and whether such funds can be used
may depend on limitations imposed by the institutions where such funds are currently held. We cannot guarantee that you will be able to use
such funds.

      We will have the right, in our sole discretion, to permit institutional investors to submit irrevocable orders together with the legally
binding commitment for payment and to thereafter pay for the shares of common stock for which they subscribe in the syndicated community
offering at any time prior to the completion of the offering. This payment may be made by wire transfer.

      Our employee stock ownership plan will not be required to pay for any shares purchased in the offering until consummation of the
offering, provided there is a loan commitment from an unrelated financial institution or SP Bancorp, Inc. to lend to the employee stock
ownership plan the necessary amount to fund the purchase.

    Regulations prohibit SharePlus Federal Bank from knowingly lending funds or extending credit to any persons to purchase shares of
common stock in the offering.

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       Delivery of Stock Certificates . Certificates representing shares of common stock issued in the offering and SP Bancorp, Inc. checks
representing any applicable refund and/or interest paid on subscriptions made by check or money order will be mailed to the persons entitled
thereto at the certificate registration address noted on the order form, as soon as practicable following consummation of the offering and receipt
of all necessary regulatory approvals. Any certificates returned as undeliverable will be held by the transfer agent until claimed by persons
legally entitled thereto or otherwise disposed of in accordance with applicable law. Until certificates for the shares of common stock are
available and delivered to purchasers, purchasers may not be able to sell the shares of common stock that they ordered, even though
the common stock will have begun trading.

       Other Restrictions . Notwithstanding any other provision of the plan of conversion, no person is entitled to purchase any shares of
common stock to the extent the purchase would be illegal under any federal or state law or regulation, including state ―blue sky‖ regulations, or
would violate regulations or policies of the Financial Industry Regulatory Authority, particularly those regarding free riding and withholding.
We may ask for an acceptable legal opinion from any purchaser as to the legality of his or her purchase and we may refuse to honor any
purchase order if an opinion is not timely furnished. In addition, we are not required to offer shares of common stock to any person who resides
in a foreign country.

Restrictions on Transfer of Subscription Rights and Shares
      Office of Thrift Supervision regulations prohibit any person with subscription rights, including the Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members, from transferring or entering into any agreement or understanding to
transfer the legal or beneficial ownership of the subscription rights issued under the plan of conversion or the shares of common stock
to be issued upon their exercise. These rights may be exercised only by the person to whom they are granted and only for his or her
account. Each person exercising subscription rights will be required to certify that he or she is purchasing shares solely for his or her
own account and that he or she has no agreement or understanding regarding the sale or transfer of such shares. The regulations also
prohibit any person from offering or making an announcement of an offer or intent to make an offer to purchase subscription rights or
shares of common stock to be issued upon their exercise prior to completion of the offering.

     We intend to pursue any and all legal and equitable remedies in the event we become aware of the transfer of subscription rights,
and we will not honor orders that we believe involve the transfer of subscription rights.

Conversion Center
      If you have any questions regarding the offering, please call our Conversion Center at (800) 387-1024, or visit the Conversion Center
located at 5224 W. Plano Parkway, Plano, Texas, Monday through Friday between 10:00 a.m. and 4:00 p.m., Dallas Time. The Conversion
Center will be closed weekends and bank holidays.

Liquidation Rights
       In the unlikely event of a complete liquidation of SharePlus Federal Bank prior to the conversion, all claims of creditors of SharePlus
Federal Bank, including those of depositors of SharePlus Federal Bank (to the extent of their deposit balances), would be paid first. Then, if
there were any assets of SharePlus Federal Bank remaining, members of SharePlus Federal Bank would receive those remaining assets, pro
rata, based upon the deposit balances in their deposit account in SharePlus Federal Bank immediately prior to liquidation. In the unlikely event
that SharePlus Federal Bank were to liquidate after

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the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution of the ―liquidation account‖
to certain depositors, with any assets remaining thereafter distributed to SP Bancorp, Inc. as the holder of SharePlus Federal Bank capital stock.
Pursuant to the rules and regulations of the Office of Thrift Supervision, a post-conversion merger, consolidation, sale of bulk assets or similar
combination or transaction with another insured savings institution would not be considered a liquidation and, in these types of transactions, the
liquidation account would be assumed by the surviving institution.

     The plan of conversion provides for the establishment, upon the completion of the conversion, of a special ―liquidation account‖ for the
benefit of Eligible Account Holders and Supplemental Eligible Account Holders in an amount equal to the total equity of SharePlus Federal
Bank as of the date of its latest balance sheet contained in this prospectus.

       The purpose of the liquidation account is to provide Eligible Account Holders and Supplemental Eligible Account Holders who maintain
their deposit accounts with SharePlus Federal Bank after the conversion with a liquidation interest in the unlikely event of the complete
liquidation of SharePlus Federal Bank after the conversion. Each Eligible Account Holder and Supplemental Eligible Account Holder that
continues to maintain his or her deposit account at SharePlus Federal Bank, would be entitled, on a complete liquidation of SharePlus Federal
Bank after the conversion, to an interest in the liquidation account prior to any payment to the stockholders of SP Bancorp, Inc. Each Eligible
Account Holder and Supplemental Eligible Account Holder would have an initial interest in the liquidation account for each deposit account,
including savings accounts, transaction accounts such as negotiable order of withdrawal accounts, money market deposit accounts, and
certificates of deposit, with a balance of $50 or more held in SharePlus Federal Bank on March 31, 2009 and [supplemental date], respectively.
Each Eligible Account Holder and Supplemental Eligible Account Holder would have a pro rata interest in the total liquidation account for
each such deposit account, based on the proportion that the balance of each such deposit account on March 31, 2009 and [supplemental date],
respectively, bears to the balance of all deposit accounts in SharePlus Federal Bank on such dates.

      If, however, on any December 31 annual closing date commencing on or after the effective date of the conversion, the amount in any
such deposit account is less than the amount in the deposit account on March 31, 2009 and [supplemental date], as applicable, or any other
annual closing date, then the interest in the liquidation account relating to such deposit account would be reduced from time to time by the
proportion of any such reduction, and such interest will cease to exist if such deposit account is closed. In addition, no interest in the liquidation
account would ever be increased despite any subsequent increase in the related deposit account. Payment pursuant to liquidation rights of
Eligible Account Holders and Supplemental Eligible Account Holders would be separate and apart from the payment of any insured deposit
accounts to such depositor. Any assets remaining after the above liquidation rights of Eligible Account Holders and Supplemental Eligible
Account Holders are satisfied would be distributed to SP Bancorp, Inc., as the sole stockholder of SharePlus Federal Bank.

Material Income Tax Consequences
      Consummation of the conversion is subject to the prior receipt of an opinion of counsel or tax advisor with respect to federal and state
income taxation that the conversion will not be a taxable transaction to SharePlus Federal Bank, SP Bancorp, Inc., Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members. Unlike private letter rulings, opinions of counsel or tax advisors are not binding
on the Internal Revenue Service or any state taxing authority, and such authorities may disagree with such opinions. In the event of such
disagreement, there can be no assurance that SharePlus Federal Bank or SP Bancorp, Inc. would prevail in a judicial proceeding.

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      SharePlus Federal Bank and SP Bancorp, Inc. have received an opinion of counsel, Luse Gorman Pomerenk & Schick, P.C., regarding all
of the material federal income tax consequences of the conversion, which includes the following:
      1.     The conversion of SharePlus Federal Bank to a federally chartered stock savings bank will qualify as a tax-free reorganization
             within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code.
      2.     SharePlus Federal Bank will not recognize any gain or loss upon the receipt of money from SP Bancorp, Inc. in exchange for
             shares of common stock of SharePlus Federal Bank.
      3.     The basis and holding period of the assets received by SharePlus Federal Bank, in stock form, from SharePlus Federal Bank, in
             mutual form, will be the same as the basis and holding period in such assets immediately before the conversion.
      4.     No gain or loss will be recognized by account holders of SharePlus Federal Bank, including Eligible Account Holders,
             Supplemental Eligible Account Holders and Other Members, upon the issuance to them of withdrawable deposit accounts in
             SharePlus Federal Bank, in stock form, in the same dollar amount and under the same terms as held at SharePlus Federal Bank, in
             mutual form. In addition, Eligible Account Holders, Supplemental Eligible Account Holders and Other Members will not recognize
             gain or loss upon receipt of an interest in a liquidation account in SharePlus Federal Bank in exchange for their ownership interests
             in SharePlus Federal Bank.
      5.     The basis of the account holders deposit accounts in SharePlus Federal Bank, in stock form, will be the same as the basis of their
             deposit accounts in SharePlus Federal Bank, in mutual form. The basis of the Eligible Account Holders, Supplemental Eligible
             Account Holders and Other Members interests in the liquidation account will be zero, which is the cost of such interest to such
             persons.
      6.     It is more likely than not that the nontransferable subscription rights have no value, based on the fact that these rights are acquired
             by the recipients without cost, are nontransferable and of short duration, and afford the recipients the right only to purchase the
             common stock at a price equal to its estimated fair market value, which will be the same price as the subscription price for the
             shares of common stock in the offering. Accordingly, no gain or loss will be recognized by Eligible Account Holders,
             Supplemental Eligible Account Holders or Other Members upon distribution to them of nontransferable subscription rights to
             purchase shares of SP Bancorp, Inc. common stock, provided that the amount to be paid for SP Bancorp, Inc. common stock is
             equal to the fair market value of SP Bancorp, Inc. common stock.
      7.     The basis of the shares of SP Bancorp, Inc. common stock purchased in the offering will be the purchase price. The holding period
             of the SP Bancorp, Inc. common stock purchased pursuant to the exercise of nontransferable subscription rights will commence on
             the date on which the right to acquire such stock was exercised.
      8.     No gain or loss will be recognized by SP Bancorp, Inc. on the receipt of money in exchange for shares of SP Bancorp, Inc.
             common stock sold in the offering.

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      In the view of RP Financial, LC. (which is acting as independent appraiser of the value of the shares of SP Bancorp, Inc. common stock
in connection with the conversion), the subscription rights do not have any value for the reasons set forth above. RP Financial, LC.’s view is
not binding on the Internal Revenue Service. If the subscription rights granted to Eligible Account Holders, Supplemental Eligible Account
Holders and Other Members are deemed to have an ascertainable value, receipt of these rights could result in taxable gain to those Eligible
Account Holders, Supplemental Eligible Account Holders and Other Members who exercise the subscription rights in an amount equal to their
value, and SP Bancorp, Inc. could recognize gain on a distribution. Eligible Account Holders, Supplemental Eligible Account Holders and
Other Members are encouraged to consult with their own tax advisors as to the tax consequences in the event that subscription rights are
deemed to have an ascertainable value.

      The Internal Revenue Service will not issue private letter rulings with respect to the issue of whether nontransferable rights have value.
Unlike private letter rulings, an opinion of counsel or the view of an independent appraiser is not binding on the Internal Revenue Service and
the Internal Revenue Service could disagree with the conclusions reached therein. Depending on the conclusion or conclusions with which the
Internal Revenue Service disagrees, the Internal Revenue Service may take the position that the transaction is taxable to any one or more of
SharePlus Federal Bank, the members of SharePlus Federal Bank, SP Bancorp, Inc. and the Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members who exercise their subscription rights. In the event of a disagreement, there can be no assurance that SP
Bancorp, Inc. or SharePlus Federal Bank would prevail in a judicial or administrative proceeding.

      The federal tax opinion has been filed with the Securities and Exchange Commission as an exhibit to SP Bancorp, Inc.’s registration
statement. Advice regarding the Texas state income tax consequences consistent with the federal tax opinion has been issued by RSM
McGladrey, Inc., tax advisors to SharePlus Federal Bank and SP Bancorp, Inc.

Restrictions on Purchase or Transfer of Our Shares after Conversion
       The shares being acquired by the directors, executive officers and their associates are being acquired for investment purposes, and not
with a view towards resale. All shares of common stock purchased in the offering by a director or an executive officer of SharePlus Federal
Bank generally may not be sold for a period of one year following the closing of the conversion, except in the event of the death of the director
or executive officer. Each certificate for restricted shares will bear a legend giving notice of this restriction on transfer, and instructions will be
issued to the effect that any transfer within this time period of any certificate or record ownership of the shares other than as provided above is
a violation of the restriction. Any shares of common stock issued at a later date as a stock dividend, stock split or otherwise with respect to the
restricted stock will be similarly restricted. The directors and executive officers of SP Bancorp, Inc. also will be restricted by the insider trading
rules promulgated pursuant to the Securities Exchange Act of 1934.

      Purchases of shares of our common stock by any of our directors, executive officers and their associates, during the three-year period
following the closing of the conversion may be made only through a broker or dealer registered with the Securities and Exchange Commission,
except with the prior written approval of the Office of Thrift Supervision. This restriction does not apply, however, to negotiated transactions
involving more than 1% of our outstanding common stock, to purchases of our common stock to fund stock options by one or more
stock-based benefit plans or to any of our tax-qualified employee stock benefit plans or nontax-qualified employee stock benefit plans,
including any stock-based benefit plans.

      Office of Thrift Supervision regulations prohibit SP Bancorp, Inc. from repurchasing its shares of common stock during the first year
following conversion unless compelling business reasons exist for such repurchases. After one year, the Office of Thrift Supervision does not
impose any repurchase restrictions.

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                                        RESTRICTIONS ON ACQUISITION OF SP BANCORP, INC.

       Although the board of directors of SP Bancorp, Inc. is not aware of any effort that might be made to obtain control of SP Bancorp, Inc.
after the conversion, the board of directors believes that it is appropriate to include certain provisions as part of SP Bancorp, Inc.’s articles of
incorporation to protect the interests of SP Bancorp, Inc. and its stockholders from takeovers which our board of directors might conclude are
not in the best interests of SharePlus Federal Bank, SP Bancorp, Inc. or SP Bancorp, Inc.’s stockholders.

      The following discussion is a general summary of the material provisions of SP Bancorp, Inc.’s articles of incorporation and bylaws,
SharePlus Federal Bank’s federal stock charter, Maryland corporate law and certain other regulatory provisions that may be deemed to have an
―anti-takeover‖ effect. The following description of certain of these provisions is necessarily general and, with respect to provisions contained
in SP Bancorp, Inc.’s articles of incorporation and bylaws and SharePlus Federal Bank’s federal stock charter, reference should be made in
each case to the document in question, each of which is part of SharePlus Federal Bank’s application for conversion with the Office of Thrift
Supervision, and except for SharePlus Federal Bank’s federal stock charter, SP Bancorp, Inc.’s registration statement filed with the Securities
and Exchange Commission. See ―Where You Can Find Additional Information.‖

SP Bancorp, Inc.’s Articles of Incorporation and Bylaws
      SP Bancorp, Inc.’s articles of incorporation and bylaws contain a number of provisions relating to corporate governance and rights of
stockholders that might discourage future takeover attempts. As a result, stockholders who might desire to participate in such transactions may
not have an opportunity to do so. In addition, these provisions will also render the removal of the board of directors or management of SP
Bancorp, Inc. more difficult.

      Directors . The board of directors will be divided into three classes. The members of each class will be elected for a term of three years
and only one class of directors will be elected annually. Thus, it would take at least two annual elections to replace a majority of our directors.
The bylaws establish qualifications for board members, including restrictions on affiliations with competitors of SharePlus Federal Bank and
prior legal or regulatory violations. Further, the bylaws impose notice and information requirements in connection with the nomination by
stockholders of candidates for election to the board of directors or the proposal by stockholders of business to be acted upon at an annual
meeting of stockholders. Such notice and information requirements are applicable to all stockholder business proposals and nominations, and
are in addition to any requirements under the federal securities laws.

      Evaluation of Offers. The articles of incorporation of SP Bancorp, Inc. provide that its board of directors, when evaluating a transaction
that would or may involve a change in control of SP Bancorp, Inc. (whether by purchases of its securities, merger, consolidation, share
exchange, dissolution, liquidation, sale of all or substantially all of its assets, proxy solicitation or otherwise), may, in connection with the
exercise of its business judgment in determining what is in the best interests of SP Bancorp, Inc. and its stockholders and in making any
recommendation to the stockholders, give due consideration to all relevant factors, including, but not limited to:
        •    the economic effect, both immediate and long-term, upon SP Bancorp, Inc.’s stockholders, including stockholders, if any, who do
             not participate in the transaction;
        •    the social and economic effect on the present and future employees, creditors and customers of, and others dealing with, SP
             Bancorp, Inc. and its subsidiaries and on the communities in which SP Bancorp, Inc. and its subsidiaries operate or are located;

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        •    whether the proposal is acceptable based on the historical, current or projected future operating results or financial condition of SP
             Bancorp, Inc.;
        •    whether a more favorable price could be obtained for SP Bancorp, Inc.’s stock or other securities in the future;
        •    the reputation and business practices of the other entity to be involved in the transaction and its management and affiliates as they
             would affect the employees of SP Bancorp, Inc. and its subsidiaries;
        •    the future value of the stock or any other securities of SP Bancorp, Inc. or the other entity to be involved in the proposed
             transaction;
        •    any antitrust or other legal and regulatory issues that are raised by the proposal;
        •    the business and historical, current or expected future financial condition or operating results of the other entity to be involved in
             the transaction, including, but not limited to, debt service and other existing financial obligations, financial obligations to be
             incurred in connection with the proposed transaction, and other likely financial obligations of the other entity to be involved in the
             proposed transaction; and
        •    the ability of SP Bancorp, Inc. to fulfill its objectives as a financial institution holding company and on the ability of its subsidiary
             financial institution(s) to fulfill the objectives of a federally insured financial institution under applicable statutes and regulations.

      If the board of directors determines that any proposed transaction should be rejected, it may take any lawful action to defeat such
transaction.

     Restrictions on Calling Special Meetings . The bylaws provide that special meetings of stockholders can be called by only the President,
a majority of the total number of directors that SP Bancorp, Inc. would have if there were no vacancies on the board of directors (the ―whole
board‖), or the Secretary upon the written request of stockholders entitled to cast at least a majority of all votes entitled to vote at the meeting.

      Prohibition of Cumulative Voting . The articles of incorporation prohibit cumulative voting for the election of directors.

      Limitation of Voting Rights . The articles of incorporation provide that in no event will any person who beneficially owns more than
10% of the then-outstanding shares of common stock, be entitled or permitted to vote any of the shares of common stock held in excess of the
10% limit; provided that such 10% limit shall not apply if a majority of the unaffiliated directors approve the acquisition of shares in excess of
the 10% limit prior to such acquisition.

      Restrictions on Removing Directors from Office . The articles of incorporation provide that directors may be removed only for cause,
and only by the affirmative vote of the holders of a majority of the voting power of all of our then-outstanding capital stock entitled to vote
generally in the election of directors (after giving effect to the limitation on voting rights discussed above in ―—Limitation of Voting Rights‖),
voting together as a single class.

      Authorized but Unissued Shares . After the conversion, SP Bancorp, Inc. will have authorized but unissued shares of common and
preferred stock. See ―Description of Capital Stock.‖ The articles of incorporation authorize 50,000,000 shares of serial preferred stock. SP
Bancorp, Inc. is authorized to

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issue preferred stock from time to time in one or more series subject to applicable provisions of law, and the board of directors is authorized to
fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions
of redemption of such shares. In addition, the articles of incorporation provide that a majority of the whole board may, without action by the
stockholders, amend the articles of incorporation to increase or decrease the aggregate number of shares of stock of any class or series that SP
Bancorp, Inc. has the authority to issue. In the event of a proposed merger, tender offer or other attempt to gain control of SP Bancorp, Inc. that
the board of directors does not approve, it would be possible for the board of directors to authorize the issuance of a series of preferred stock
with rights and preferences that would impede the completion of the transaction. An effect of the possible issuance of preferred stock therefore
may be to deter a future attempt to gain control of SP Bancorp, Inc. The board of directors has no present plan or understanding to issue any
preferred stock.

      Amendments to Articles of Incorporation and Bylaws. Except as provided under ―—Authorized but Unissued Shares,‖ above, regarding
the amendment of the articles of incorporation by the board of directors to increase or decrease the number of shares authorized for issuance, or
as otherwise allowed by law, any amendment to the articles of incorporation must be approved by our board of directors and also by a majority
of the outstanding shares of our voting stock; provided, however, that approval by at least 80% of the outstanding voting stock is generally
required to amend the following provisions:
      (i)      The limitation on voting rights of persons who directly or indirectly beneficially own more than 10% of the outstanding shares of
               common stock;
      (ii)     The division of the board of directors into three staggered classes;
      (iii)     The ability of the board of directors to fill vacancies on the board;
      (iv) The ability of the board of directors to amend and repeal the bylaws;
      (v)      The ability of the board of directors to evaluate a variety of factors in evaluating offers to purchase or otherwise acquire SP
               Bancorp, Inc.;
      (vi) The authority of the board of directors to provide for the issuance of preferred stock;
      (vii)     The validity and effectiveness of any action lawfully authorized by the affirmative vote of the holders of a majority of the total
                number of outstanding shares of common stock;
      (viii)     The number of stockholders constituting a quorum or required for stockholder consent;
      (ix) The indemnification of current and former directors and officers, as well as employees and other agents, by SP Bancorp, Inc.;
      (x)      The limitation of liability of officers and directors to SP Bancorp, Inc. for money damages; and
      (xi) The provision of the articles of incorporation requiring approval of at least 80% of the outstanding voting stock to amend the
           provisions of the articles of incorporation provided in (i) through (xi) of this list.

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      The articles of incorporation also provide that the bylaws may be amended by the affirmative vote of a majority of our directors or by the
stockholders by the affirmative vote of at least 80% of the total votes eligible to be voted at a duly constituted meeting of stockholders. Any
amendment of this supermajority requirement for amendment of the bylaws would also require the approval of 80% of the outstanding voting
stock.

Maryland Corporate Law
      Under Maryland law, ―business combinations‖ between a Maryland corporation and an interested stockholder or an affiliate of an
interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested
stockholder. These business combinations include a merger, consolidation, statutory share exchange or, in circumstances specified in the
statute, certain transfers of assets, certain stock issuances and transfers, liquidation plans and reclassifications involving interested stockholders
and their affiliates or issuance or reclassification of equity securities. Maryland law defines an interested stockholder as: (i) any person who
beneficially owns 10% or more of the voting power of a corporation’s voting stock after the date on which the corporation had 100 or more
beneficial owners of its stock; or (ii) an affiliate or associate of the corporation at any time after the date on which the corporation had 100 or
more beneficial owners of its stock who, within the two-year period prior to the date in question, was the beneficial owner of 10% or more of
the voting power of the then-outstanding voting stock of the corporation. A person is not an interested stockholder under the statute if the board
of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. However, in
approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any
terms and conditions determined by the board.

      After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must
be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (i) 80% of the votes entitled to be
cast by holders of outstanding shares of voting stock of the corporation and (ii) two-thirds of the votes entitled to be cast by holders of voting
stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to
be effected or held by an affiliate or associate of the interested stockholder. These super-majority vote requirements do not apply if the
corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other
consideration in the same form as previously paid by the interested stockholder for its shares.

Conversion Regulations
       Office of Thrift Supervision regulations prohibit any person from making an offer, announcing an intent to make an offer or participating
in any other arrangement to purchase stock or acquiring stock or subscription rights in a converting institution or its holding company from
another person prior to completion of its conversion. Further, without the prior written approval of the Office of Thrift Supervision, no person
may make an offer or announcement of an offer to purchase shares or actually acquire shares of a converted institution or its holding company
for a period of three years from the date of the completion of the conversion if, upon the completion of such offer, announcement or
acquisition, the person would become the beneficial owner of more than 10% of the outstanding stock of the institution or its holding company.
The Office of Thrift Supervision has defined ―person‖ to include any individual, group acting in concert, corporation, partnership, association,
joint stock company, trust, unincorporated organization or similar company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities of an insured institution. However, offers made exclusively to a bank or its holding company, or an
underwriter or member of a selling group acting on the converting institution’s or its holding company’s behalf for resale to the general public
are excepted. The regulation also provides civil penalties for willful violation or assistance in any such violation of the regulation by any person
connected with the management of the converting institution or its holding company or who controls more than 10% of the outstanding shares
or voting rights of a converted institution or its holding company.

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SharePlus Federal Bank’s Federal Stock Charter
      The federal stock charter of SharePlus Federal Bank will provide that for a period of five years from the closing of the conversion, no
person other than SP Bancorp, Inc. may offer directly or indirectly to acquire the beneficial ownership of more than 10% of any class of equity
security of SharePlus Federal Bank. This provision does not apply to any tax-qualified employee benefit plan of SharePlus Federal Bank or SP
Bancorp, Inc. or to underwriters in connection with a public offering. In addition, during this five-year period, all shares owned over the 10%
limit may not be voted on any matter submitted to stockholders for a vote.

Change in Control Regulations
      Under the Change in Bank Control Act, no person may acquire control of an insured federal savings bank or its parent holding company
unless the Office of Thrift Supervision has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed
acquisition. In addition, Office of Thrift Supervision regulations provide that no company may acquire control of a savings bank without the
prior approval of the Office of Thrift Supervision. Any company that acquires such control becomes a ―savings and loan holding company‖
subject to registration, examination and regulation by the Office of Thrift Supervision.

      Control, as defined under federal law, means ownership, control of or holding irrevocable proxies representing more than 25% of any
class of voting stock, control in any manner of the election of a majority of the institution’s directors, or a determination by the Office of Thrift
Supervision that the acquirer has the power to direct, or directly or indirectly to exercise a controlling influence over, the management or
policies of the institution. Acquisition of more than 10% of any class of a savings bank’s voting stock, if the acquirer is also subject to any one
of eight ―control factors,‖ constitutes a rebuttable determination of control under the regulations. Such control factors include the acquirer
being one of the two largest stockholders. The determination of control may be rebutted by submission to the Office of Thrift Supervision, prior
to the acquisition of stock or the occurrence of any other circumstances giving rise to such determination, of a statement setting forth facts and
circumstances which would support a finding that no control relationship will exist and containing certain undertakings. The regulations
provide that persons or companies that acquire beneficial ownership exceeding 10% or more of any class of a savings bank’s stock who do not
intend to participate in or seek to exercise control over a savings bank’s management or policies may qualify for a safe harbor by filing with the
Office of Thrift Supervision a certification form that states, among other things, that the holder is not in control of such institution, is not
subject to a rebuttable determination of control and will take no action which would result in a determination or rebuttable determination of
control without prior notice to or approval of the Office of Thrift Supervision, as applicable. There are also rebuttable presumptions in the
regulations concerning whether a group ―acting in concert‖ exists, including presumed action in concert among members of an ―immediate
family.‖

      The Office of Thrift Supervision may prohibit an acquisition of control if it finds, among other things, that:
        •    the acquisition would result in a monopoly or substantially lessen competition;
        •    the financial condition of the acquiring person might jeopardize the financial stability of the institution;

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        •    the competence, experience or integrity of the acquiring person indicates that it would not be in the interest of the depositors or the
             public to permit the acquisition of control by such person; or
        •    the acquisition would have an adverse effect on the Deposit Insurance Fund.

                                                     DESCRIPTION OF CAPITAL STOCK

General
       SP Bancorp, Inc. is authorized to issue 100,000,000 shares of common stock, par value of $0.01 per share, and 50,000,000 shares of
preferred stock, par value $0.01 per share. SP Bancorp, Inc. currently expects to issue in the offering up to 1,983,750 shares of common stock.
SP Bancorp, Inc. will not issue shares of preferred stock in the stock offering. Each share of SP Bancorp, Inc. common stock will have the same
relative rights as, and will be identical in all respects to, each other share of common stock. Upon payment of the subscription price for the
common stock, in accordance with the plan of conversion, all of the shares of common stock will be duly authorized, fully paid and
nonassessable.

      The shares of common stock of SP Bancorp, Inc. will represent nonwithdrawable capital, will not be an account of an insurable type, and
will not be insured by the Federal Deposit Insurance Corporation or any other government agency.

Common Stock
      Dividends . SP Bancorp, Inc. can pay dividends on its common stock if, after giving effect to the distribution, it would be able to pay its
indebtedness as the indebtedness comes due in the usual course of business and its total assets exceed the sum of its liabilities and the amount
needed, if SP Bancorp, Inc. were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of any holders
of capital stock who have a preference in the event of dissolution. The holders of common stock of SP Bancorp, Inc. will be entitled to receive
and share equally in dividends as may be declared by our board of directors out of funds legally available therefor. If SP Bancorp, Inc. issues
shares of preferred stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends.

      Voting Rights . Upon consummation of the conversion, the holders of common stock of SP Bancorp, Inc. will have exclusive voting
rights in SP Bancorp, Inc. They will elect SP Bancorp, Inc.’s board of directors and act on other matters as are required to be presented to them
under Maryland law or as are otherwise presented to them by the board of directors. Generally, each holder of common stock will be entitled to
one vote per share and will not have any right to cumulate votes in the election of directors. Any person who beneficially owns more than 10%
of the then-outstanding shares of SP Bancorp, Inc.’s common stock, however, will not be entitled or permitted to vote any shares of common
stock held in excess of the 10% limit. If SP Bancorp, Inc. issues shares of preferred stock, holders of the preferred stock may also possess
voting rights. Certain matters require an 80% stockholder vote.

      As a federal stock savings bank, corporate powers and control of SharePlus Federal Bank are vested in its board of directors, who elect
the officers of SharePlus Federal Bank and who fill any vacancies on the board of directors. Voting rights of SharePlus Federal Bank are vested
exclusively in the owners of the shares of capital stock of SharePlus Federal Bank, which will be SP Bancorp, Inc., and voted at the direction of
SP Bancorp, Inc.’s board of directors. Consequently, the holders of the common stock of SP Bancorp, Inc. will not have direct control of
SharePlus Federal Bank.

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      Liquidation . In the event of any liquidation, dissolution or winding up of SharePlus Federal Bank, SP Bancorp, Inc., as the holder of
100% of SharePlus Federal Bank’s capital stock, would be entitled to receive all assets of SharePlus Federal Bank available for distribution,
after payment or provision for payment of all debts and liabilities of SharePlus Federal Bank, including all deposit accounts and accrued
interest thereon, and after distribution of the balance in the liquidation account to Eligible Account Holders and Supplemental Eligible Account
Holders. In the event of liquidation, dissolution or winding up of SP Bancorp, Inc., the holders of its common stock would be entitled to
receive, after payment or provision for payment of all its debts and liabilities, all of the assets of SP Bancorp, Inc. available for distribution. If
preferred stock is issued, the holders thereof may have a priority over the holders of the common stock in the event of liquidation or
dissolution.

      Preemptive Rights . Holders of the common stock of SP Bancorp, Inc. will not be entitled to preemptive rights with respect to any shares
that may be issued, unless such preemptive rights are approved by the board of directors. The common stock is not subject to redemption.

Preferred Stock
      None of the shares of SP Bancorp, Inc.’s authorized preferred stock will be issued as part of the offering or the conversion. Preferred
stock may be issued with preferences and designations as our board of directors may from time to time determine. Our board of directors may,
without stockholder approval, issue shares of preferred stock with voting, dividend, liquidation and conversion rights that could dilute the
voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in
control.

                                                               TRANSFER AGENT

      The transfer agent and registrar for SP Bancorp, Inc.’s common stock is Registrar and Transfer Company, Cranford, New Jersey .

                                                                     EXPERTS

      The financial statements of SharePlus Federal Bank as of December 31, 2009 and 2008, and for the years then ended, have been included
herein and in the registration statement in reliance upon the report of McGladrey & Pullen, LLP, independent registered public accounting firm,
appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

      RP Financial, LC. has consented to the publication herein of the summary of its report to SP Bancorp, Inc. setting forth its opinion as to
the estimated pro forma market value of the shares of common stock upon completion of the conversion and offering and its letter with respect
to subscription rights.

                                                          LEGAL AND TAX MATTERS

     Luse Gorman Pomerenk & Schick, P.C., Washington, D.C., counsel to SP Bancorp, Inc. and SharePlus Federal Bank, has issued to SP
Bancorp, Inc. its opinions regarding the legality of the common stock and the federal income tax consequences of the conversion. Luse Gorman
Pomerenk & Schick, P.C. has consented to the references in this prospectus to its opinions. Certain legal matters will be passed upon for
Sandler O’Neill & Partners, L.P. by Silver, Freedman & Taff, L.L.P., Washington, D.C.

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                                         WHERE YOU CAN FIND ADDITIONAL INFORMATION

      SP Bancorp, Inc. has filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 with
respect to the shares of common stock offered hereby. As permitted by the rules and regulations of the Securities and Exchange Commission,
this prospectus does not contain all the information set forth in the registration statement. Such information, including the appraisal report
which is an exhibit to the registration statement, can be examined without charge at the public reference facilities of the Securities and
Exchange Commission located at 100 F Street, N.E., Washington, D.C. 20549, and copies of such material can be obtained from the Securities
and Exchange Commission at prescribed rates. The Securities and Exchange Commission telephone number is 1-800-SEC-0330. In addition,
the Securities and Exchange Commission maintains a web site (http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the Securities and Exchange Commission, including SP Bancorp, Inc.
The statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement
are, of necessity, brief descriptions of the material terms of, and should be read in conjunction with, such contract or document.

      SharePlus Federal Bank has filed with the Office of Thrift Supervision an Application on Form AC with respect to the conversion. This
prospectus omits certain information contained in the application. The application may be examined at the principal office of the Office of
Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 20552, and at the Western Regional Office of the Office of Thrift Supervision,
located at 225 East John Carpenter Freeway, Suite 500, Irving, Texas 75062. Our plan of conversion is available, upon request, at each of our
branch offices.

      In connection with the offering, SP Bancorp, Inc. will register its common stock under Section 12(b) of the Securities Exchange
Act of 1934 and, upon such registration, SP Bancorp, Inc. and the holders of its common stock will become subject to the proxy
solicitation rules, reporting requirements and restrictions on common stock purchases and sales by directors, officers and greater than
10% stockholders, the annual and periodic reporting and certain other requirements of the Securities Exchange Act of 1934. Under the
plan of conversion, SP Bancorp, Inc. has undertaken that it will not terminate such registration for a period of at least three years
following the offering.

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                                INDEX TO FINANCIAL STATEMENTS OF SHAREPLUS FEDERAL BANK

Report of Independent Registered Public Accounting Firm                                                                                    F-2
Balance Sheets at March 31, 2010 (unaudited) and December 31, 2009 and 2008                                                                F-3
Statements of Operations for the three months ended March 31, 2010 and 2009 (unaudited) and the years ended
  December 31, 2009 and 2008                                                                                                               F-4
Statements of Changes in Equity Capital for the three months ended March 31, 2010 (unaudited) and the years ended
  December 31, 2009 and 2008                                                                                                               F-5
Statements of Cash Flows for the three months ended March 31, 2010 and 2009 (unaudited) and the years ended
  December 31, 2009 and 2008                                                                                                               F-6
Notes to Financial Statements                                                                                                         F-7 – F-33

                                                                       ***

Separate financial statements for SP Bancorp, Inc. have not been included in this prospectus, because SP Bancorp, Inc. has not engaged in any
significant activities, has no significant assets, and has no contingent liabilities, revenue or expenses.

All financial statement schedules have been omitted as the required information either is not applicable or is included in the financial
statements or related notes.

                                                                       F-1
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 Report of Independent Registered Public Accounting Firm
The Board of Directors
SharePlus Federal Bank
Plano, Texas

We have audited the accompanying balance sheets of SharePlus Federal Bank (the Bank) as of December 31, 2009 and 2008, and the related
statements of operations, changes in equity capital and cash flows for the years then ended. These financial statements are the responsibility of
the Bank’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SharePlus Federal
Bank as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended in conformity with U.S.
generally accepted accounting principles.


                                                                                                   /s/ McGladrey & Pullen, LLP

Dallas, Texas
April 8, 2010

McGladrey & Pullen, LLP is a member firm of RSM International,
an affiliation of separate and independent legal entities.

                                                                       F-2
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                                                             SharePlus Federal Bank
                                                                Balance Sheets
                                                                (In thousands)

                                                                                                      March 31,
                                                                                                        2010             December 31,
                                                                                                                      2009              2008
                                                                                                  (Unaudited)
ASSETS
Cash and due from banks (Note 2)                                                                  $      12,812   $     7,902    $        2,651
Federal funds sold                                                                                       22,730         3,815             3,080

                Total cash and cash equivalents                                                          35,542        11,717             5,731
Securities available for sale (amortized cost of $13,034 at March 31, 2010 (unaudited) and
  $13,356 and $7,903 at December 31, 2009 and 2008 , respectively (Note 4)                               13,281        13,492             8,048
Fixed annuity investment                                                                                  1,098         1,088             1,039
Loans held for sale                                                                                       1,457           932               470
Loans, net of allowance for losses of $1,994 at March 31, 2010 (unaudited) and $940 and $480 at
  December 31, 2009 and 2008, respectively (Note 5)                                                     165,732       170,535           164,462
Accrued interest receivable                                                                                 795           764               717
Premises and equipment, net (Note 6)                                                                      4,812         4,905             5,292
Federal Home Loan Bank stock and other restricted stock, at cost                                          1,654         1,655             1,570
Deferred tax assets (Note 9)                                                                                804           679               913
Other assets                                                                                              2,009         2,365             2,758

                Total assets                                                                      $     227,184   $ 208,132      $ 191,000


LIABILITIES AND EQUITY CAPITAL
Deposits (Note 7):
    Noninterest-bearing                                                                           $       4,809   $     4,932    $        3,198
    Interest-bearing                                                                                    187,382       167,659           138,310

          Total deposits                                                                                192,191       172,591           141,508
Borrowings (Note 8)                                                                                      15,998        15,995            30,534
Accrued interest payable                                                                                     45            45                88
Other liabilities                                                                                         1,943         2,239             2,096

                Total liabilities                                                                       210,177       190,870           174,226

Commitments and contingencies (Notes 10 and 11)
Equity capital:
    Retained earnings - substantially restricted (Note 15)                                               16,854        17,177            16,684
    Accumulated other comprehensive income                                                                  153            85                90
                Total equity capital                                                                     17,007        17,262            16,774

                Total liabilities and equity capital                                              $     227,184   $ 208,132      $ 191,000


                                                       See Notes to Financial Statements.

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                                                           SharePlus Federal Bank
                                                         Statements of Operations
                                                              (In thousands)

                                                                                   Three Months Ended March 31,         Years Ended December 31,
                                                                                    2010                  2009            2009            2008
                                                                                           (Unaudited)
Interest income:
     Interest and fees on loans                                                $      2,420           $     2,495   $      10,003      $     8,719
     Securities - taxable                                                               102                    93             425              635
     Securities - nontaxable                                                             13                     5              40               19
     Other interest - earning assets                                                     47                    26             131              198
Total interest income                                                                 2,582                 2,619          10,599            9,571

Interest expense:
     Deposit accounts                                                                   449                   576           2,184            2,577
     Borrowings                                                                         118                   192             567              487
Total interest expense                                                                  567                   768           2,751            3,064

          Net interest income                                                         2,015                 1,851           7,848            6,507
Provision for loan losses (Note 5)                                                    1,080                   136             687              391

           Net interest income after provision for loan losses                          935                 1,715           7,161            6,116

Noninterest income:
    Service charges                                                                     296                   320           1,325            1,489
    Gain on sale of securities available for sale                                       —                       3              34               75
    Gain on sale of mortgage loans                                                       97                   102             464              226
    Other                                                                               132                   116             520              582
Total noninterest income                                                                525                   541           2,343            2,372

Noninterest expense:
    Compensation and benefits                                                           987                 1,171           4,655            4,689
    Occupancy costs                                                                     273                   296           1,174            1,207
    Data processing expense                                                             153                   141             568              538
    ATM expense                                                                          91                    91             380              361
    Professional and outside services                                                   176                    95             541              404
    Stationery and supplies                                                              26                    23              92              113
    Publicity and promotion                                                              38                    38             181              211
    FDIC insurance assessments                                                           67                    36             335              164
    Other                                                                               184                   149             723              662
Total noninterest expense                                                             1,995                 2,040           8,649            8,349
         Income (loss) before taxes                                                    (535 )                 216             855              139
Income tax expense (benefit) (Note 9)                                                  (212 )                  82             362              111

           Net income (loss)                                                   $       (323 )         $       134   $         493      $           28


                                                      See Notes to Financial Statements.

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                                                             SharePlus Federal Bank
                                                   Statements of Changes in Equity Capital
                                                               (In thousands)

                                                                                                            Accumulated
                                                                                                               Other
                                                                                              Retained     Comprehensive
                                                                                              Earnings     Income (Loss)       Total
Balance, December 31, 2007                                                                   $ 16,656      $         (31 )   $ 16,625
     Net income                                                                                     28               —              28
     Unrealized gain on securities available for sale, net of tax of $88                           —                 171           171
     Reclassification adjustment for gain on securities available for sale included in
       net income, net of tax of $(25)                                                             —                 (50 )         (50 )
           Total comprehensive income                                                                                              149
Balance, December 31, 2008                                                                      16,684                90       16,774
     Net income                                                                                    493               —             493
     Unrealized gain on securities available for sale, net of tax of $9                            —                  17            17
     Reclassification adjustment for gain on securities available for sale included in
       net income, net of tax of $(12)                                                             —                 (22 )         (22 )
           Total comprehensive income                                                                                              488
Balance, December 31, 2009                                                                      17,177                85       17,262
     Net loss (unaudited)                                                                         (323 )             —            (323 )
     Unrealized gain on securities available for sale, net of tax of $43 (unaudited)               —                  68            68
           Total comprehensive income (unaudited)                                                                                 (255 )

Balance, March 31, 2010 (unaudited)                                                          $ 16,854      $         153     $ 17,007


                                                        See Notes to Financial Statements.

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                                                             SharePlus Federal Bank
                                                            Statements of Cash Flows
                                                                 (In thousands)

                                                                              Three Months Ended March 31,           Year Ended December 31,
                                                                                2010                2009             2009              2008
                                                                                      (Unaudited)
Cash flows from operating activities:
    Net income (loss)                                                     $        (323 )       $        134     $       493       $           28
    Adjustments to reconcile net income (loss) to net cash provided by
       (used in) operating activities:
         Depreciation and amortization                                              100                  102             405                419
         Amortization of premiums on investments                                     29                   (3 )            67                 14
         Provision for loan losses                                                1,080                  136             687                391
         Deferred tax expense (benefit)                                            (163 )                 86             243                (13 )
         Loss on sale of repossessed assets                                         —                      2               9                —
         Loss (gain) on sale of other real estate owned                             (10 )                  1              21                 76
         Writedown of other real estate owned                                       —                    —               —                  105
         Gain on sale of securities available for sale                              —                     (3 )           (34 )              (75 )
         Gains on sales of mortgage loans                                           (97 )               (102 )          (464 )             (226 )
         Proceeds from sale of mortgage loans                                     5,878                5,526          30,468             16,278
         Loans originated for sale                                               (6,306 )             (6,597 )       (30,466 )          (14,443 )
         Increase in accrued interest receivable                                    (31 )                (46 )           (47 )             (128 )
         Decrease (increase) in other assets                                        351                1,699             414             (1,330 )
         Increase (decrease) in fixed annuity investment                            (10 )                (15 )           (49 )              135
         Increase in accrued interest payable and other liabilities                (296 )               (468 )            72                 95

                Net cash provided by operating activities                           202                  452           1,819              1,326

Cash flows from investing activities:
         Purchase of securities available for sale                                 (520 )                —           (11,512 )           (1,979 )
         Maturities of securities available for sale                                813                  496           3,640              2,356
         Proceeds from sale of securities available for sale                        —                      3           2,385              6,113
         Maturities of securities held to maturity                                  —                    —               —                  194
         Purchases of certificates of deposit                                       —                    —               —               (1,500 )
         Maturities of certificates of deposit                                      —                    —               —                1,500
         Purchases (redemptions) of Federal Home Loan Bank stock                      1                  —               (85 )             (825 )
         Loan repayments (originations), net                                      3,723               (1,441 )        (7,168 )          (29,176 )
         Proceeds from sale of repossessed assets                                   —                      6              56                —
         Proceeds from sale of other real estate owned                               10                  138             324                340
         Purchases of premises and equipment                                         (7 )                —               (17 )             (256 )
                Net cash provided by (used in) investing activities               4,020                 (798 )       (12,377 )          (23,233 )

Cash flows from financing activities:
         Net increase in deposit accounts                                        19,600               30,090          31,083             1,613
         (Repayments of) proceeds from short-term advances, net                       5               (6,250 )       (10,250 )          17,784
         (Repayments of) proceeds from Federal Home Loan
         Bank advances, net                                                           (2 )            (3,260 )         (4,289 )           4,241
                Net cash provided by financing activities                        19,603               20,580          16,544            23,638
Net increase in cash and cash equivalents                                        23,825               20,234           5,986              1,731
Cash and cash equivalents at beginning of period                                 11,717                5,731           5,731              4,000
Cash and cash equivalents at end of period                                $      35,542         $     25,965     $    11,717       $      5,731


                                                      See Notes to Financial Statements.
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                                                             SharePlus Federal Bank
                                                          Notes to Financial Statements
                                                             (Dollars in thousands)


Note 1. Summary of Significant Accounting Policies
   General
SharePlus Federal Bank (the Bank), formerly SharePlus Federal Credit Union, is a federal mutual savings bank located in Plano, Texas. On
October 1, 2004, the Bank converted from a non-taxable federally chartered credit union regulated by the National Credit Union Association
(NCUA) to a taxable federally chartered mutual savings bank. The Bank is regulated by the Office of Thrift Supervision and the Federal
Deposit Insurance Corporation.

The Bank operates as a full-service bank, including the acceptance of checking and savings deposits, and the origination of primarily first
mortgage, home equity, automobile, and personal loans. The Bank has eight branches, of which five are located near the Bank’s headquarters in
Plano, Texas; two branches are located in Louisville, Kentucky; and the other branch is located in Irvine, California. These branches were
located primarily in the headquarters of the former credit union’s sponsor organizations.

   Accounting Standards Codification
The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) became effective on July 1, 2009. At that date,
the ASC became FASB’s officially recognized source of authoritative U.S. generally accepted accounting principles (GAAP) applicable to all
public and non-public non-governmental entities, superseding existing FASB, American Institute of Certified Public Accountants (AICPA),
Emerging Issues Task Force (EITF) and related literature. Rules and interpretive releases of the SEC under the authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. The switch to
the ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content in the ASC
involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.

   Interim Financial Statements
The financial statements of the Bank at March 31, 2010 (unaudited) and for the three months ended March 31, 2010 and 2009 (unaudited) have
been prepared in conformity with U.S. generally accepted accounting principles for interim financial information and predominant practices
followed by the financial services industry; and are unaudited. However, in management’s opinion, the interim data at March 31, 2010 and for
the three months ended March 31, 2010 and 2009 includes all adjustments, consisting of only normal recurring adjustments, necessary for a fair
statement of the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of
operations to be expected for the full year.

   Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates. A material estimate that is particularly susceptible to significant change in the near term relates to the determination of the
allowance for loan losses.

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                                                               SharePlus Federal Bank
                                                    Notes to Financial Statements—(Continued)
                                                               (Dollars in thousands)


   Subsequent Events
Events occurring subsequent to December 31, 2009, have been evaluated as to their potential impact at the date of issuance of this report.

   Cash and Cash Equivalents
For the purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold.
Federal funds are normally sold for one-day periods and are interest-bearing. The Bank normally considers all highly liquid investments with
an initial maturity of less than ninety days to be cash equivalents.

The Bank maintains funds on deposit at correspondent banks which at times exceed the federally insured limits. The Bank’s management
monitors the balance in these accounts and periodically assesses the financial condition of the correspondent banks. The Bank had a
concentration of funds with correspondent banks of $10,934, $6,484 and $0 at March 31, 2010 (unaudited) and December 31, 2009 and 2008,
respectively.

Cash and cash equivalents include interest-bearing funds of $34,403, $10,736 and $3,772 at March 31, 2010 (unaudited) and December 31,
2009 and 2008, respectively.

   Securities
Securities available for sale consist of certain debt and equity securities that the Bank intends to hold for an indefinite period of time, but not
necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant
movements in interest rates, changes in the maturity mix of the Bank’s assets and liabilities, liquidity needs, regulatory capital considerations,
and other similar factors.

Securities available for sale are reported at fair value with unrealized gains or losses reported as a separate component of other comprehensive
income.

The amortization of premiums and accretion of discounts, computed by the interest method over their contractual lives, are recognized in
interest income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in noninterest income.

In estimating other than temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has
been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Bank to sell or whether it would
be more-likely-than-not required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair
value.

If the Bank does not have the intent to sell a debt security prior to recovery and it is more likely than not that it will not have to sell the debt
security prior to recovery, the security would not be considered other than temporarily impaired unless there is a credit loss. When the Bank
does not intend to sell the security, and it is more likely than not, the entity will not have to sell the security before recovery of its cost basis, it
will recognize the credit component of an other than temporary impairment of a debt security in earnings and the remaining portion in other
comprehensive income.

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                                                              SharePlus Federal Bank
                                                   Notes to Financial Statements—(Continued)
                                                              (Dollars in thousands)


   Fixed Annuity Investment
The fixed annuity investment guarantees a rate of 4%, 4% and 6% at March 31, 2010 (unaudited) and December 31, 2009 and 2008,
respectively. The full principal is guaranteed by Western Southern Assurance Company and has a credit rating of ―AA‖ at March 31, 2010
(unaudited).

   Loans Held for Sale
Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by
aggregate outstanding commitments from investors or current investor yield requirements. Gains or losses on sales of mortgage loans are
recognized in noninterest income based on the difference between the selling price and the carrying value of the related mortgage loans.

   Loans
Loans held for investment are reported in the balance sheets net of the allowance for loan losses and deferred fees and costs. Interest income is
recognized over the term of the loan using the level yield method. For loans with no contractual maturity, interest income is recognized using
the simple interest method.

Loan origination fees and certain direct loan origination costs are deferred and recognized as an adjustment of the related loan yield using the
interest method.

The Bank considers a loan to be impaired when, based upon current information and events, it is probable that the Bank will be unable to
collect all amounts due according to the contractual terms of the loan agreement. The measurement of impairment is based on the present value
of expected future cash flows discounted at the loan’s effective interest rate or the market price or fair value of collateral if the loan is collateral
dependent. The amount, if any, by which the recorded investment of the loan exceeds the measure of the impaired loan’s value, is recognized
by recording a valuation allowance.

The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in the process of
collection. Loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on
these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual
status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

   Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance
for loan losses when management believes that collectibility of the principal is unlikely. Subsequent recoveries, if any, are credited to the
allowance.

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                                                            SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


The allowance is an amount that management believes will be adequate to absorb probable credit losses. The allowance consists of specific and
general components. The specific component relates to loans that are individually classified as impaired, for which the carrying value of the
loan exceeds the fair value of the collateral or the present value of expected future cash flows, or loans otherwise adversely classified. The
general component covers non-classified loans and is based on the historical loan loss experience for the last two years, including adjustments
to historical loss experience, maintained to cover uncertainties that affect the Bank’s estimate of probable losses for each loan type. The
adjustments to historical loss experience are based on evaluation of several factors, including primarily changes in experience of lending staff,
lending policies and procedures; changes in collection, charge-off and recovery practices; changes in the nature and volume of the loan
portfolio; changes in the volume and severity of nonperforming loans; the existence and effect of any concentrations of credit and changes in
the level of such concentrations; and changes in current, national and local economic and business conditions.

This evaluation does not include the effects of expected losses on specific loans or groups of loans that are related to future events or expected
changes in economic conditions. While management uses the best information available to make its evaluation, future adjustments to the
allowance may be necessary if there are significant changes in economic conditions. This evaluation is inherently subjective as it requires
estimates that are susceptible to significant revision as more information becomes available. In addition, regulatory agencies, as an integral part
of their examination process, periodically review the Bank’s allowance for loan losses, and may require the Bank to make additions to the
allowance based on their judgment about information available to them at the time of their examinations.

   Accrued Interest Receivable
Interest on securities and loans is accrued as earned. Accrued interest receivable as of March 31, 2010 (unaudited) and December 31, 2009 and
2008 is summarized as follows:

                                                                                                       March 31,
                                                                                                         2010           December 31,
                                                                                                                      2009        2008
                                                                                                    (unaudited)
            Securities                                                                             $          67     $ 83        $ 39
            Loans                                                                                            728      681         678
                                                                                                   $         795     $ 764       $ 717


   Restricted Stock
The Bank, as a member of the Federal Home Loan Bank (FHLB) system, is required to maintain an investment in capital stock of the FHLB in
an amount between 0.05% and 0.30% of its assets plus between 3.50% and 5.00% of advances outstanding. FHLB stock and Independent
Bankers Financial Corporation stock do not have readily determinable market values as ownership is restricted and they lack a ready market.
As a result, these stocks are carried at cost and evaluated periodically by management for impairment.

                                                                       F-10
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                                                            SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


FHLB stock is evaluated for impairment in accordance with FASB ASC 942-325, ―Financial Services-Depository and
Lending-Investments-Other.‖ Determination of whether the FHLB stock is impaired is based on the assessment of the ultimate recoverability of
cost rather than by recognizing declines in value. The determination of whether a decline affects the ultimate recoverability of costs is
influenced by the significance of the decline in net assets compared to the capital of the FHLB and the length of time this situation has
persisted; the ability of the FHLB to make payments required by law or regulation and operating performance; the impact of legislative and
regulatory changes on member institutions and customer base and the liquidity position of the FHLB. Management believes that no impairment
charge on FHLB stock is necessary at March 31, 2010 (unaudited).

   Premises and Equipment
Land is carried at cost. Bank building and improvements, and furniture and equipment are carried at cost, less accumulated depreciation and
amortization computed principally by the straight-line method based upon the useful lives of the assets ranging from 10 to 40 years for
buildings and improvements and 3 to 10 years for furniture and equipment. Maintenance and repairs are charged to noninterest expense. The
cost of leasehold improvements is amortized using the straight-line method over the lesser of the useful lives of the assets or the terms of the
related leases.

   Other Real Estate Owned
Other real estate owned (OREO) represents properties acquired through foreclosure or other proceedings and is initially recorded at fair value
at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is
carried at the lower of cost or fair value less estimated costs of disposal. Any write down to fair value at the time of transfer to OREO is
charged to the allowance for loan losses. Property is evaluated regularly to ensure the recorded amount is supported by its current fair value and
valuation allowances to reduce the carrying amount to fair value less estimated costs to dispose are recorded as necessary.

Revenue and expense from the operations of OREO and changes in the valuation allowance are included in noninterest expense. There is no
OREO at March 31, 2010 (unaudited) or December 31, 2009 or 2008. Losses on OREO charged to operations for the three months ended
March 31, 2009 (unaudited) and years ended December 31, 2009 and 2008 were $1, $21 and $181, respectively. The Bank recognized a gain
on OREO of $10 during the three months ended March 31, 2010 (unaudited).

   Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The FASB issued recent guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial
statements. The Bank adopted this recent guidance for the year ended December 31, 2009. This guidance requires the evaluation of tax
positions taken or expected to be taken in the course of preparing the Bank’s federal and state tax returns to determine whether the tax positions
are ―more-likely-than-not‖ of being

                                                                       F-11
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                                                             SharePlus Federal Bank
                                                  Notes to Financial Statements—(Continued)
                                                             (Dollars in thousands)


sustained ―when challenged‖ or ―when examined‖ by the applicable tax authority. Tax positions deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the current year. Interest and penalties related to tax positions are recognized in
income tax expense. The Bank is no longer subject to U.S. federal or state income tax examination by tax authorities for the years ended on or
before December 31, 2005. For the three months ended March 31, 2010 (unaudited) and year ended December 31, 2009, management has
determined there are no material uncertain tax positions.

   Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain
changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the
equity section of the balance sheet, such items, along with net income, are components of comprehensive income. Gains and losses on available
for sale securities are reclassified to net income as the gains or losses are realized upon sale of the securities. Other than temporary impairment
charges related to credit losses are reclassified to net income at the time of the charge.

   Reclassifications
Certain prior period amounts have been classified in order to conform to current period presentation. Such reclassifications had no affect on net
income or equity capital.

   Fair Values of Financial Instruments
ASC Topic 820, ―Fair Value Measurements and Disclosures‖, defines fair value, establishes a framework for measuring fair value in generally
accepted accounting principles, and requires certain disclosures about fair value measurements (see Note 17, ―Fair Value Measurements‖). In
general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not
available, fair value is based upon models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be
made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit
quality and the Bank’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied
consistently over time.

   Recent Authoritative Accounting Guidance
FASB ASC Topic 805, ―Business Combinations.‖ On January 1, 2009, recent authoritative accounting guidance under ASC Topic 805,
―Business Combinations,‖ became applicable to the Bank’s accounting for business combinations closing on or after January 1, 2009. ASC
Topic 805 applies to all transactions and other events in which one entity obtains control over one or more other businesses. ASC Topic 805
requires an acquirer, upon initially obtaining control of another entity, to recognize the assets, liabilities and any noncontrolling interest in the
acquiree at fair value as of the acquisition date. Contingent consideration is required to be recognized and measured at fair value on the date of
acquisition rather than at a later date when the amount of that consideration may be determinable beyond a reasonable doubt. This fair value
approach replaces the cost-allocation process required under previous accounting guidance whereby the cost of an acquisition was allocated to
the individual assets acquired and liabilities assumed based on their estimated fair value. ASC Topic 805 requires acquirers to expense
acquisition-related costs as incurred rather than allocating such costs to the assets acquired and liabilities assumed, as was previously the case
under prior accounting guidance. Assets acquired and liabilities assumed in a

                                                                        F-12
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                                                             SharePlus Federal Bank
                                                  Notes to Financial Statements—(Continued)
                                                             (Dollars in thousands)


business combination that arise from contingencies are to be recognized at fair value if fair value can be reasonably estimated. If fair value of
such an asset or liability cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with ASC
Topic 450, ―Contingencies.‖ Under ASC Topic 805, the requirements of ASC Topic 420, ―Exit or Disposal Cost Obligations,‖ would have to
be met in order to accrue for a restructuring plan in purchase accounting. Pre-acquisition contingencies are to be recognized at fair value, unless
it is a non-contractual contingency that is not likely to materialize, in which case, nothing should be recognized in purchase accounting and,
instead that contingency would be subject to probable and estimable criteria of ASC Topic 450, ―Contingencies‖.

FASB ASC Topic 320, ―Investments—Debt and Equity Securities.‖ Recent authoritative accounting guidance under ASC Topic 320,
―Investments—Debt and Equity Securities,‖ (i) changes existing guidance for determining whether an impairment is other than temporary to
debt securities and (ii) replaces the existing requirement that the entity’s management assert it has both the intent and ability to hold an
impaired security until recovery with a requirement that management assert: (a) it does not have the intent to sell the security; and (b) it is more
likely than not it will not have to sell the security before recovery of its cost basis. Under ASC Topic 320, declines in the fair value of held to
maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses
to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other
comprehensive income. The Bank adopted the provisions of the recent authoritative accounting guidance under ASC Topic 320 during 2009.
Adoption of the recent guidance did not significantly impact the Bank’s financial statements.

FASB ASC Topic 820, ―Fair Value Measurements and Disclosures.‖ ASC Topic 820, ―Fair Value Measurements and Disclosures,‖ defines fair
value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value
measurements. The provisions of ASC Topic 820 became effective for the Bank on January 1, 2009 for nonfinancial assets and nonfinancial
liabilities (see Note 17—Fair Value Measurements).

Additional recent authoritative accounting guidance under ASC Topic 820 affirms that the objective of fair value when the market for an asset
is not active is the price that would be received to sell the asset in an orderly transaction, and clarifies and includes additional factors for
determining whether there has been a significant decrease in market activity for an asset when the market for that asset is not active. ASC
Topic 820 requires an entity to base its conclusion about whether a transaction was not orderly on the weight of the evidence. The recent
accounting guidance amended prior guidance to expand certain disclosure requirements. The Bank adopted the recent authoritative accounting
guidance under ASC Topic 820 during 2009. Adoption of the recent guidance did not significantly impact the Bank’s financial statements.

In January 2010, new authoritative guidance under ASC Topic 820, requires entities to disclose transfers in and out of levels 1 and 2, and to
expand the reconciliation of level 3 fair value measurements by presenting separately information about purchases, sales, issuances and
settlements. The updated guidance also clarifies disclosure requirements on the level of disaggregation (provide fair value measurement
disclosures for each class of assets and liabilities) and inputs and valuation techniques (disclose for fair value measurements that fall in either
level 2 or level 3). This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for
disclosures about purchases, sales, issuances and settlements in the reconciliation of level 3 fair value measurements. Those disclosures are
effective for periods after December 15, 2010. Adoption of the new effective guidance did not significantly impact the Bank’s financial
statements.

                                                                        F-13
Table of Contents

                                                           SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


FASB ASC Topic 855, ―Subsequent Events.‖ Recent authoritative accounting guidance under ASC Topic 855, ―Subsequent Events,‖
establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements
are issued or available to be issued. ASC Topic 855 defines (i) the period after the balance sheet date during which a reporting entity’s
management should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the
circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements,
and (iii) the disclosures an entity should make about events or transactions that occurred after the balance sheet date. The recent authoritative
accounting guidance under ASC Topic 855 became effective for the Bank’s financial statements for periods ending after June 15, 2009 and did
not have a significant impact on the Bank’s financial statements.

FASB ASC Topic 860, ―Transfers and Servicing.‖ New authoritative accounting guidance under ASC Topic 860, ―Transfers and Servicing,‖
amends prior accounting guidance to enhance reporting about transfers of financial assets, including securitizations, and where companies have
continuing exposure to the risks related to transferred financial assets. The new authoritative accounting guidance eliminates the concept of a
―qualifying special-purpose entity‖ and changes the requirements for derecognizing financial assets. The new authoritative accounting guidance
also requires additional disclosures about all continuing involvements with transferred financial assets including information about gains and
losses resulting from transfers during the period. The new authoritative accounting guidance under ASC Topic 860 became effective January 1,
2010 and did not have a significant impact on the Bank’s financial statements.

Note 2. Restrictions on Cash and Due from Banks
The Bank is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank based on a percentage of deposits. The
total of those reserve balances was approximately $1,211, $1,413 and $1,029 at March 31, 2010 (unaudited) and December 31, 2009 and 2008,
respectively.

Note 3. Statements of Cash Flows
The Bank reports on a net basis its cash receipts and cash payments for time deposits accepted and repayments of those deposits, loans made to
customers and principal collections on those loans, and interest-bearing deposits in other banks.

                                                                      F-14
Table of Contents

                                                          SharePlus Federal Bank
                                                Notes to Financial Statements—(Continued)
                                                           (Dollars in thousands)


The Bank uses the indirect method to present cash flows from operating activities. Other supplemental cash flow information for the three
months ended March 31, 2010 and 2009 (unaudited) and years ended December 31, 2009 and 2008 is presented as follows:

                                                                                            Three Months Ended            Years Ended
                                                                                                 March 31,                December 31,
                                                                                             2010          2009        2009          2008
                                                                                                (Unaudited)
      Cash transactions:
          Income taxes paid                                                                $    14      $     12   $       27     $    —

           Interest expense paid                                                           $   567      $    767   $ 2,795        $ 3,020

      Noncash transactions:
          Transfers of loans to other real estate owned and repossessed assets             $   —        $    147   $     407      $         8


                                                                     F-15
Table of Contents

                                                          SharePlus Federal Bank
                                                Notes to Financial Statements—(Continued)
                                                           (Dollars in thousands)


Note 4. Securities
Securities have been classified in the balance sheets according to management’s intent. The amortized cost of securities and their approximate
fair values at March 31, 2010 (unaudited) and December 31, 2009 and 2008 are as follows:

                                                                                                     Gross           Gross
                                                                                    Amortized      Unrealized      Unrealized            Fair
                                                                                      Cost           Gains          Losses               Value
Securities Available for Sale
March 31, 2010 (unaudited):
    Agency securities                                                              $    2,499     $         8     $       (12 )      $     2,495
    Municipal securities                                                                1,368              41             —                1,409
    Collateralized mortgage obligations guaranteed by FNMA and FHLMC                    1,569              26             —                1,595
    Mortgage-backed securities guaranteed by SBA, FNMA, GNMA and
      FHLMC                                                                             7,598             188              (4 )            7,782
                                                                                   $ 13,034       $       263     $       (16 )      $ 13,281

December 31, 2009:
    Agency securities                                                              $    2,499     $         2     $       (44 )      $     2,457
    Municipal securities                                                                1,370              28             (36 )            1,362
    Collateralized mortgage obligations guaranteed by FNMA and FHLMC                    1,820              31             —                1,851
    Mortgage-backed securities guaranteed by SBA, FNMA, GNMA and
      FHLMC                                                                             7,667             162              (7 )            7,822
                                                                                   $ 13,356       $       223     $       (87 )      $ 13,492

December 31, 2008:
    Municipal securities                                                           $      482     $         4     $       —          $       486
    Collateralized mortgage obligations guaranteed by FNMA and FHLMC                    2,221              16             —                2,237
    Mortgage-backed securities guaranteed by FNMA, GNMA and FHLMC                       5,200             125             —                5,325
                                                                                   $    7,903     $       145     $       —          $     8,048


Mortgage-backed securities and collateralized mortgage obligations are backed by single-family mortgage loans. The Bank does not hold any
securities backed by commercial real estate loans.

                                                                     F-16
Table of Contents

                                                              SharePlus Federal Bank
                                                  Notes to Financial Statements—(Continued)
                                                             (Dollars in thousands)


For the three months ended March 31, 2010 and 2009 (unaudited) proceeds from sales of securities available for sale were $0 and $3,
respectively. Gross gains of $0 and $3 were realized on sales of securities in the three months ended March 31, 2010 and 2009 (unaudited),
respectively.

For the year ended 2009 and 2008 proceeds from sales of securities available for sale were $2,385 and $6,113, respectively. Gross gains of $34
and $75 were realized on sales of securities in 2009 and 2008, respectively.

Gross unrealized losses and fair values by investment category and length of time in a continuous unrealized loss position at March 31, 2010
(unaudited) and December 31, 2009 are as follows:

                                             Number of
                                              Security
                                              Positions
                                                with           Continuous Unrealized               Continuous Unrealized
                                             Unrealized          Losses Existing for                 Losses Existing for
                                               losses           Less than 12 Months                 12 Months or Longer                    Total
                                                              Market           Unrealized         Market          Unrealized   Market           Unrealized
                                                              Value               Losses          Value              Losses    Value             Losses
Securities Available for Sale

March 31, 2010 (unaudited):
    Agency securities                                 1   $        487       $        (12 )   $       —         $       —      $     487      $        (12 )
    Mortgage-backed securities                        1          2,436                 (4 )           —                 —          2,436                (4 )
                                                      2   $      2,923       $        (16 )   $       —         $       —      $ 2,923        $        (16 )


December 31, 2009:
    Agency securities                                 3   $      1,955       $        (44 )   $       —         $       —      $ 1,955        $        (44 )
    Municipal securities                              2            857                (36 )           —                 —          857                 (36 )
    Mortgage-backed securities                        1          2,576                 (7 )           —                 —        2,576                  (7 )
                                                      6   $      5,388       $        (87 )   $       —         $       —      $ 5,388        $        (87 )


There were no unrealized losses on securities available for sale at December 31, 2008.

For all of the above securities available for sale, the unrealized losses are generally due to changes in interest rates. The unrealized losses are
considered to be temporary as they reflect fair values on March 31, 2010 (unaudited) and December 31, 2009 and 2008 and are subject to
change daily as interest rates fluctuate. The Bank does not intend to sell these securities and it is more-likely-than-not that the Bank will not be
required to sell prior to recovery. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more
frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and extent to which the
fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Bank to sell or
whether it would be more-likely-than-not required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated
recovery in fair value.

                                                                          F-17
Table of Contents

                                                         SharePlus Federal Bank
                                               Notes to Financial Statements—(Continued)
                                                          (Dollars in thousands)


The scheduled maturities of securities at March 31, 2010 (unaudited) and December 31, 2009 are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

                                                                                         March 31, 2010                  December 31, 2009
                                                                                        Available for Sale                Available for Sale
                                                                                    Amortized          Market         Amortized          Market
                                                                                      Cost              Value           Cost              Value
      Due in one year or less                                                      $      —         $      —         $      —         $      —
      Due after one year through five years                                               149              163              —                —
      After 5 years through 10 years                                                    1,273            1,301            1,924            1,939
      Due after 10 years                                                                2,445            2,440            1,945            1,880
                                                                                        3,867            3,904            3,869            3,819
      Mortgage-backed securities and collateralized mortgage obligations                9,167            9,377            9,487            9,673
                                                                                   $ 13,034         $ 13,281         $ 13,356         $ 13,492


Note 5. Loans and Allowance for Loan Losses
Loans at March 31, 2010 (unaudited) and December 31, 2009 and 2008 consisted of the following:

                                                                                 March 31,
                                                                                   2010                         December 31,
                                                                                                         2009                  2008
                                                                             (Unaudited)
            Commercial                                                       $       1,109           $     1,369          $      1,225
            Commercial real estate                                                  23,358                22,615                17,498
            One-to-four family                                                     121,618               124,486               116,343
            Home equity                                                              8,815                 8,996                 9,051
            Automobile and other vehicles                                            8,901                 9,892                15,525
            Signature loans                                                          1,891                 2,072                 2,533
            Other                                                                    1,509                 1,536                 2,176
                                                                                   167,201               170,966               164,351
            Premiums/discounts, net                                                     46                    51                    76
            Deferred loan costs, net                                                   479                   458                   515
            Less allowance for loan losses                                          (1,994 )                (940 )                (480 )
                                                                             $     165,732           $ 170,535            $ 164,462


                                                                    F-18
Table of Contents

                                                           SharePlus Federal Bank
                                                Notes to Financial Statements—(Continued)
                                                           (Dollars in thousands)


On occasion, the Bank originates loans secured by single-family and home equity loans with high loan to value ratios exceeding 90 percent.
These loans totaled $4,843, $5,295 and $6,850 at March 31, 2010 (unaudited) and December 31, 2009 and 2008, respectively.

Construction loans at March 31, 2010 (unaudited) and December 31, 2009 and 2008 amounted to $5,593, $4,788 and $4,834, respectively.

An analysis of the allowance for loan losses for the three months ended March 31, 2010 and 2009 (unaudited) and years ended December 31,
2009 and 2008 is as follows:

                                                                    Three Months Ended March 31,                   Years Ended December 31,
                                                                     2010                    2009                  2009                 2008
                                                                            (Unaudited)
      Balance, beginning of period                              $          940           $      480            $       480              $     380
      Provision for loan losses                                          1,080                  136                    687                    391
      Loans charged to the allowance                                       (32 )                (86 )                 (245 )                 (305 )
      Recoveries of loans previously charged off                             6                    4                     18                     14
      Balance, end of period                                    $        1,994           $      534            $      940               $       480


Impaired loans and nonperforming loans were summarized as follows:

                                                                                                          March 31,
                                                                                                            2010                   December 31,
                                                                                                                                2009            2008
                                                                                                        (unaudited)
      Impaired loans:
      Impaired loans with an allowance for loan losses                                                $       3,238         $     543       $     700
      Impaired loans with no allowance for loan losses                                                        4,295             1,874             —
           Total impaired loans                                                                       $       7,533         $ 2,417         $     700

      Allowance for loan losses on impaired loans                                                     $         870         $     168       $          35

      Average recorded investment in impaired loans                                                   $       4,975         $ 1,559         $ 1,328

      Nonperforming loans:
      Loans past due 90 days or more still accruing                                                   $         —           $     —         $     —
      Nonaccrual loans                                                                                        4,607             1,711             610
      Troubled debt restructurings (not included in nonaccrual loans)                                         1,646             1,717             860
           Total nonperforming loans                                                                  $       6,253         $ 3,428         $ 1,470


                                                                        F-19
Table of Contents

                                                            SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


Interest income on impaired loans recognized on the cash basis during the three months ended March 31, 2010 and 2009 (unaudited) and the
years ended December 31, 2009 and 2008 was not significant.

Troubled debt restructurings are loans for which a portion of the interest or principal has been forgiven or loans modified at interest rates
materially less than current market rates.

The Bank originated $6,306 and $6,597 in loans during the three months ended March 31, 2010 and 2009 (unaudited), respectively, and
$30,466 and $14,443 in loans during the years ended December 31, 2009 and 2008, respectively, which were placed with various
correspondent lending institutions.

Proceeds on sales of these loans were $5,878 and $5,526 during the three months ended March 31, 2010 and 2009 (unaudited), respectively,
and $30,468 and $16,278 during the years ended December 31, 2009 and 2008, respectively. Gains on sales of these loans were $97 and $102
during the three months ended March 31, 2010 and 2009 (unaudited), respectively, and $464 and $226 during the years ended December 31,
2009 and 2008, respectively. These loans were sold with servicing rights released.

Loans serviced for the benefit of others amounted to $2,665, $2,536, $2,554 and $2,195 at March 31, 2010 and 2009 (unaudited) and
December 31, 2009 and 2008, respectively.

Note 6. Premises and Equipment
Premises and equipment at March 31, 2010 (unaudited) and December 31, 2009 and 2008 consisted of the following:

                                                                                                  March 31,
                                                                                                    2010              December 31,
                                                                                                                  2009               2008
                                                                                               (Unaudited)
            Land                                                                              $       1,064     $ 1,064        $ 1,064
            Building and improvements                                                                 3,669       3,669          3,669
            Furniture and fixtures                                                                    1,292       1,292          1,323
            Computer equipment                                                                          549         549            582
            Leasehold improvements                                                                      902         902            902
                                                                                                      7,476        7,476             7,540
            Less accumulated depreciation and amortization                                            2,664        2,571             2,248
                                                                                              $       4,812     $ 4,905        $ 5,292


Depreciation and amortization expense was $100 and $102 for the three months ended March 31, 2010 and 2009 (unaudited), respectively, and
$405 and $419 for the years ended December 31, 2009 and 2008, respectively.

                                                                       F-20
Table of Contents

                                                             SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


Note 7. Deposits
Deposits as of March 31, 2010 (unaudited) and December 31, 2009 and 2008 consisted of the following:

                                                              March 31,
                                                                2010                                                 December 31,
                                                                                                     2009                                     2008
                                                         Amount       Percentage            Amount          Percentage               Amount          Percentage
                                                             (unaudited)
Noninterest-bearing demand                           $      4,809                 2%    $      4,932                   3%        $      3,198                 2%
Interest-bearing demand                                    57,156                30 %         47,129                  27 %             44,140                31 %
Money market                                               35,656                19 %         30,014                  18 %             22,990                16 %
Savings accounts                                           34,510                18 %         32,181                  18 %             28,849                21 %
           Transaction accounts                           132,131                69 %       114,256                   66 %             99,177                70 %
Certificates of deposit:
     Less than 2.00%                                       30,981             16 %            24,765                  14 %                —                —
     2.00%-2.99%                                           21,652             11 %            21,251                  12 %             18,275               13 %
     3.00%-3.99%                                            5,843              3%              9,724                   6%              12,821                9%
     4.00%-4.99%                                            1,584              1%              2,595                   2%              10,710                8%
     5.00%-5.99%                                              —              —                   —                   —                    525                0%
           Total certificates of deposit                   60,060                31 %         58,335                  34 %             42,331                30 %
                Total deposits                       $ 192,191               100 %      $ 172,591                    100 %       $ 141,508                 100 %


Scheduled maturities of certificates of deposit accounts are as follows:

                                                                                                        March 31,             December 31,
                                                                                                          2010                    2009
                                                                                                       (Unaudited)
                    First year                                                                       $      40,992           $        47,282
                    Second year                                                                             13,953                     7,537
                    Third year                                                                               2,270                     1,195
                    Fourth year                                                                                862                       775
                    Fifth year                                                                               1,983                     1,546
                                                                                                     $      60,060           $        58,335


Certificates of deposit having a balance of $100 or more at March 31, 2010 (unaudited) and December 31, 2009 and 2008 totaled $27,791,
$26,180 and $14,570, respectively. Transaction accounts having a balance of $100 or more at March 31, 2010 (unaudited) and December 31,
2009 and 2008 totaled $54,040, $43,624 and $30,090, respectively.

Brokered deposits at March 31, 2010 (unaudited) and December 31, 2009 and 2008 totaled $807, $705 and $0, respectively.

                                                                          F-21
Table of Contents

                                                         SharePlus Federal Bank
                                               Notes to Financial Statements—(Continued)
                                                          (Dollars in thousands)


Interest expense by deposit type for the three months ended March 31, 2009 and 2008 (unaudited) and the year ended December 31, 2009 and
2008 is as follows:

                                                                                           Three Months Ended            Years Ended
                                                                                                March 31,                December 31,
                                                                                            2010          2009        2009          2008
                                                                                               (Unaudited)
      Interest-bearing demand                                                             $    38      $     60   $     175      $     255
      Savings                                                                                  20            19          82             89
      Money market                                                                             73           102         345            662
      Certificates of deposit                                                                 318           395       1,582          1,571
           Total interest on deposits                                                     $   449      $    576   $ 2,184        $ 2,577


Note 8. Borrowings
The Bank periodically borrows from the FHLB. At March 31, 2010 (unaudited), the Bank had a total of fourteen such advances which totaled
$15,993. These advances have various maturities ranging from August 8, 2011 through November 17, 2014 at interest rates from 0.46% to
3.09%. In addition, the Bank had $5 in overnight funds borrowed from the Federal Reserve Bank at March 31, 2010 (unaudited).

At December 31, 2009, the Bank had a total of fourteen such advances which totaled $15,995. These advances have various maturities ranging
from August 8, 2011 through November 17, 2014 at interest rates from 0.47% to 3.09%.

These advances are secured by FHLB stock, real estate loans and securities of $51,673 and $52,273, at March 31, 2010 (unaudited) and
December 31, 2009, respectively. The Bank had remaining credit available under the FHLB advance program of $35,408 and $35,986 at
March 31, 2010 (unaudited) and December 31, 2009, respectively.

During the fourth quarter of 2009, the Bank prepaid $7,362 of advances from the FHLB maturing in years 2010 through 2013, with a
weighted-average rate of 3.41% and an average remaining term of 1.28 years. These borrowings were replaced with $7,362 of new advances
from the FHLB maturing in years 2011 through 2014, with a weighted-average rate of 3.40% and an average remaining term of 3.45 years.

The Bank paid $298 of prepayment fees to the FHLB in order to increase the duration of these advances. Such fees were deferred and are being
recognized in interest expense using the interest method as an adjustment to the cost of the new advances over their remaining term.

At December 31, 2008, the Bank had a total of seventeen such advances which totaled $20,284. These advances have various maturities
ranging from January 2, 2009 through January 3, 2019 at interest rates from 2.10% to 5.14%. In addition, the Bank had $10,250 in overnight
funds borrowed from the FHLB at December 31, 2008.

The Bank had floating-rate advances from the FHLB of $2,000, $2,000 and $2,000 at March 31, 2010 (unaudited), and December 31, 2009 and
2008, respectively.

                                                                    F-22
Table of Contents

                                                           SharePlus Federal Bank
                                                Notes to Financial Statements—(Continued)
                                                           (Dollars in thousands)


At March 31, 2010 (unaudited) and December 31, 2009, the Bank had FHLB advances outstanding which mature as follows:

                                                                                               March 31,            December 31,
                                                                                                 2010                   2009
                                                                                              (unaudited)
                    First year                                                              $           70          $         86
                    Second year                                                                      6,077                 6,076
                    Third year                                                                       3,898                 3,888
                    Fourth year                                                                      1,032                 1,029
                    Fifth year                                                                       4,921                 4,916
                    Thereafter                                                                         —                     —
                                                                                            $       15,998          $    15,995


Note 9. Income Taxes
Income taxes included in the statements of operations are as follows:

                                                                                       Three Months Ended                  Years Ended
                                                                                            March 31,                     December 31,
                                                                                       2010              2009            2009        2008
                                                                                    (Unaudited)
      Current expense:
          Federal                                                                   $       (59 )       $ (13 )         $ 72       $ 82
          State                                                                              10             9             47         42
                                                                                           (49 )             (4 )         119         124
      Deferred tax expense (benefit)                                                      (163 )             86           243         (13 )
                                                                                    $     (212 )        $ 82            $ 362      $ 111


                                                                        F-23
Table of Contents

                                                             SharePlus Federal Bank
                                                  Notes to Financial Statements—(Continued)
                                                             (Dollars in thousands)


A reconciliation of the Bank’s income taxes to be expected based on the federal statutory rate of 34% and the effective tax rate for the three
months ended March 31, 2010 and 2009 (unaudited) and years ended December 31, 2009 and 2008 is as follows:

                                                                                       Three Months Ended                  Years Ended
                                                                                             March 31,                    December 31,
                                                                                       2010             2009           2009            2008
                                                                                            (Unaudited)
      Federal income tax at expected rate of 34%                                     $ (188 )        $      69        $ 291          $         47
      State income taxes                                                                 10                  9           47                    42
      Other                                                                             (34 )                4           24                    22
           Total income tax expense (benefit)                                        $ (212 )        $      82        $ 362          $ 111

      Effective tax rate                                                                 39.6 %           38.0 %        42.3 %            79.9 %


The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2010
(unaudited) and December 31, 2009 and 2008 are presented below:

                                                                                                        March 31,
                                                                                                          2010            December 31,
                                                                                                                        2009        2008
                                                                                                     (Unaudited)
            Deferred tax assets:
                Allowance for loan losses                                                           $          595     $ 223       $ 47
                Accrued employee benefits                                                                      122       227        141
                Property and improvements                                                                       23        18        —
                Net operating loss carryforward                                                                137       229        788
                Other                                                                                           16        28          5
            Total deferred tax assets                                                                          893       725             981

            Deferred tax liabilities:
                Unrealized gain on available for sale securities                                                89        46              55
                Property and improvements                                                                      —         —                10
                Other                                                                                          —         —                 3
            Total deferred tax liabilities                                                                       89       46              68
            Net deferred tax asset                                                                  $          804     $ 679       $ 913


At March 31, 2010 (unaudited) and December 31, 2009, the Bank has a net operating loss carry forward for federal income tax purposes of
$402 and $673, which is available to offset future federal taxable income through 2028. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management
considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this
assessment.

                                                                        F-24
Table of Contents

                                                           SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


Note 10. Financial Instruments With Off-Balance Sheet Risk
The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit. Those instruments involve, to varying degrees, elements of
credit and interest rate risk in excess of the amount recognized in the balance sheet.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend
credit is represented by the contractual amount of these instruments. The Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance sheet instruments.

At March 31, 2010 (unaudited) and December 31, 2009 and 2008, the approximate amounts of these financial instruments were as follows:

                                                                                                March 31,
                                                                                                  2010              December 31,
                                                                                                                 2009              2008
                                                                                             (Unaudited)
            Commitments to extend credit                                                    $       7,686     $ 9,758        $ 6,947


Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the
commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed
necessary by the Bank upon extension of credit is based on managements’ credit evaluation of the counterparty. Collateral held varies but may
include cattle, accounts receivable, inventory, property, single and multi-family residences, plant and equipment and income-producing
commercial properties. At March 31, 2010 (unaudited) and December 31, 2009, commitments to fund fixed rate loans of $4,142 and $5,958,
respectively, were included in the commitments to extend credit. Interest rates on these commitments to fund fixed rate loans ranged from 4.0%
to 17.0% at March 31, 2010 (unaudited) and December 31, 2009.

The Bank has not incurred any significant losses on its commitments in the three months ended March 31, 2010 or 2009 (unaudited) and years
ended December 31, 2009 or 2008. Although the maximum exposure to loss is the amount of such commitments, management anticipates no
material losses from such activities.

Note 11. Contingencies
The Bank is involved from time to time in various claims arising in the normal course of business. In the opinion of management, the ultimate
liability from these matters, if any, will not be significant to the Bank’s financial position or results of operations.

                                                                      F-25
Table of Contents

                                                              SharePlus Federal Bank
                                                     Notes to Financial Statements—(Continued)
                                                                (Dollars in thousands)


Note 12. Concentrations of Credit Risk
The Bank makes loans to the general public, which includes employees and former employees of the Bank’s former sponsor companies when it
operated as a credit union. The former sponsor companies are Frito-Lay, Inc., KFC Corporation, Pizza Hut, Inc., Taco Bell Corp., Yum!
Brands, Inc., A&W Restaurants, Inc., Long John Silver’s, Inc., and various divisions of PepsiCo. This concentration of credit risk could
unfavorably impact the level of credit risk of the Bank should events occur, such as employment curtailments, temporary layoffs, etc., at these
sponsor organizations. Management believes that the secured nature of the majority of these loans mitigates this risk.

Note 13. Related Parties
In the ordinary course of business, the Bank has, and expects to continue to have, transactions, including borrowings, with its executive
officers, directors, and their affiliates. All loans to the Bank’s directors and executive officers were made with interest rates, terms, and
collateral requirements similar to those required of other borrowers. Loan activity for executive officers, directors and their affiliates for the
three months ended March 31, 2010 (unaudited) and the year ended December 31, 2009 is as follows:

                                                                                             March 31,              December 31,
                                                                                               2010                     2009
                                                                                            (Unaudited)
                    Balance at beginning of period                                         $      1,618            $       2,228
                    New loans                                                                         5                       76
                    Repayments                                                                      (52 )                    (86 )
                    Change in related parties                                                       —                       (600 )
                    Balance at end of period                                               $      1,571            $       1,618


Deposits from executive officers, directors and their affiliates were $2,392, $2,105 and $1,252 at March 31, 2010 (unaudited) and
December 31, 2009 and 2008, respectively.

Note 14. Employee Benefits
The Bank’s 401(k) plan covers all eligible employees, as defined. The Bank matches 100% of employee contributions up to 5% of employees’
salaries. The Bank made matching contributions totaling $26, $28, $113 and $117 during the three months ended March 31, 2010 and 2009
(unaudited) and years ended December 31, 2009 and 2008, respectively.

The Bank has a salary continuation plan for the benefit of one officer. The Bank is funding the agreement with a fixed rate annuity. The
recorded obligation of $98, $88 and $39 at March 31, 2010 (unaudited) and December 31, 2009 and 2008, respectively, is included in other
liabilities. Expense of $10, $15, $49 and $55 was recorded for the three months ended March 31, 2010 and 2009 (unaudited) and years ended
December 31, 2009 and 2008, respectively. There were no payments made during the three months ended March 31, 2010 and during the year
ended December 31, 2009.

                                                                        F-26
Table of Contents

                                                             SharePlus Federal Bank
                                                  Notes to Financial Statements—(Continued)
                                                             (Dollars in thousands)


The Bank has a Phantom Stock Agreement (PSA) through which the Bank makes contributions on behalf of the participating employees. The
contributions are subject to vesting periods which vary based upon individual agreements. The crediting rate on the contributions is based upon
the performance of the Bank. For the year ending December 31, 2009, the Bank recognized expense of approximately $8 related to the PSA.
The recorded obligation of $8 at March 31, 2010 (unaudited) and December 31, 2009 is included in other liabilities. For the three months ended
March 31, 2010 (unaudited) and year ended December 31, 2008, the Bank made no contributions nor recognized any expense due to the fact
that the Bank had not met the performance requirements of the PSA.

Note 15. Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory and possibly additional discretionary, actions by regulators that, if undertaken,
could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and
certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy requires the Bank to maintain minimum amounts and ratios (set
forth in the following table) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), of core capital (as
defined) to adjusted tangible assets (as defined) and of tangible capital (as defined) to tangible assets. Management believes, as of March 31,
2010 (unaudited) and December 31, 2009 and 2008, that the Bank meets all capital adequacy requirements to which it is subject.

                                                                        F-27
Table of Contents

                                                            SharePlus Federal Bank
                                                   Notes to Financial Statements—(Continued)
                                                              (Dollars in thousands)


The following table sets forth the Bank’s capital ratios as of March 31, 2010 (unaudited) and December 31, 2009 and 2008:

                                                                                                                                  Minimum To Be Well
                                                                                                  Minimum for Capital           Capitalized Under Prompt
                                                                    Actual                        Adequacy Purposes            Corrective Action Provision
                                                                Amount       Ratio                Amount        Ratio            Amount             Ratio
As of March 31, 2010 (unaudited):
    Tangible capital to tangible assets                       $ 16,752        7.38 %          $       3,404      1.50 %                  N/A          N/A
    Total capital to risk weighted assets                       17,774       13.24 %                 10,739      8.00 %       $        13,424        10.00 %
    Tier 1 capital to risk weighted assets                      16,752       12.48 %                  5,370      4.00 %                 8,054         6.00 %
    Tier 1 capital to average assets                            16,752        7.38 %                  9,077      4.00 %                11,346         5.00 %
As of December 31, 2009:
    Tangible capital to tangible assets                       $ 17,075        8.21 %          $       3,119      1.50 %                  N/A          N/A
    Total capital to risk weighted assets                       17,735       12.45 %                 11,392      8.00 %       $        14,240        10.00 %
    Tier 1 capital to risk weighted assets                      17,075       11.99 %                  5,696      4.00 %                 8,544         6.00 %
    Tier 1 capital to average assets                            17,075        8.21 %                  8,317      4.00 %                10,396         5.00 %
As of December 31, 2008:
    Tangible capital to tangible assets                       $ 16,684        8.74 %          $       2,864      1.50 %                  N/A          N/A
    Total capital to risk weighted assets                       17,160       12.63 %                 10,865      8.00 %       $        13,582        10.00 %
    Tier 1 capital to risk weighted assets                      16,684       12.28 %                  5,433      4.00 %                 8,149         6.00 %
    Tier 1 capital to average assets                            16,684        8.74 %                  7,637      4.00 %                 9,546         5.00 %

The following is a reconciliation of the Bank’s equity capital under U.S. generally accepted accounting principles to Tangible and Tier 1 capital
and Total capital (as defined by the OTS) at March 31, 2010 (unaudited) and December 31, 2009 and 2008:

                                                                                         March 31,
                                                                                           2010                         December 31,
                                                                                                                2009                   2008
                                                                                     (unaudited)
            Equity capital                                                           $      17,007            $ 17,262             $ 16,774
                Disallowed deferred tax asset                                                 (102 )              (102 )                —
                Unrealized gains on securities, net                                           (153 )               (85 )                (90 )
                        Tangible and Tier 1 capital                                         16,752               17,075                 16,684
                    General allowance for loan losses                                        1,022                  660                    476
                        Total capital                                                $      17,774            $ 17,735             $ 17,160


                                                                      F-28
Table of Contents

                                                              SharePlus Federal Bank
                                                   Notes to Financial Statements—(Continued)
                                                              (Dollars in thousands)


Note 16. Fair Value Measurement
Effective January 1, 2008, the Bank adopted the provisions of the FASB guidance on fair value measurements for financial assets and financial
liabilities but delayed application of reporting the nonfinancial assets and nonfinancial liabilities at fair value until January 1, 2009. This
guidance defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands
disclosures about fair value measurements. Additional FASB guidance helps determine the fair value of a financial asset when the market for
that asset is not active clarifies the application of the fair value measurements for financial assets and financial liabilities in a market that is not
active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that
financial asset is not active.

The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the
principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The
price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction
costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for
marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market
participants are buyers and sellers in the principal market that are (1) independent, (2) knowledgeable, (3) able to transact and (4) willing to
transact.

The guidance requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost
approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable
assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single
present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity
of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that
market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market
participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable,
meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or
liability developed based on the best information available in the circumstances. In that regard, the guidance establishes a fair value hierarchy
for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to
unobservable inputs.

The fair value hierarchy is as follows:
            Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability
            to access at the measurement date.
            Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
            indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar
            assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as
            interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market
            data by correlation or other means.
            Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions
            about the assumptions that market participants would use in pricing the assets or liabilities.

                                                                          F-29
Table of Contents

                                                            SharePlus Federal Bank
                                                   Notes to Financial Statements—(Continued)
                                                              (Dollars in thousands)


The following table represents assets and liabilities reported on the balance sheet at their fair value as of March 31, 2010 (unaudited) and
December 31, 2009 and 2008 by level within the ASC 820 fair value measurement hierarchy:

                                                                                                      Fair Value Measurements at Reporting
                                                                                                                   Date Using
                                                                                               Quoted
                                                                                              Prices in              Significant
                                                                         Assets/           Active Markets              Other               Significant
                                                                       Liabilities          for Identical           Observable           Unobservable
                                                                       Measured                Assets                  Inputs                Inputs
                                                                      At Fair Value           (Level 1)               (Level 2)             (Level 3)
      March 31, 2010 (unaudited):
          Measured on a recurring basis:
               Assets:
                   Securities available for sale                  $         13,281     $              —           $     13,281         $          —
          Measured on a nonrecurring basis:
               Assets:
                   Impaired loans                                             2,368                   —           $       2,368                   —
      December 31, 2009:
          Measured on a recurring basis:
               Assets:
                   Securities available for sale                  $         13,492     $              —           $     13,492         $          —
          Measured on a nonrecurring basis:
               Assets:
                   Impaired loans                                               375                   —                     375                   —
      December 31, 2008:
          Measured on a recurring basis:
               Assets:
                   Securities available for sale                  $           8,048    $              —           $       8,048        $          —
          Measured on a nonrecurring basis:
               Assets:
                   Impaired loans                                               665                   —                     665                   —

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such
instruments pursuant to the valuation hierarchy, is set forth below.

Securities available for sale are classified within Level 2 of the valuation hierarchy. The Bank obtains fair value measurements for securities
from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads,
cash flows, the U.S Treasury yield curve, live trading levels, trade execution data, market consensus prepayment spreads, credit information
and the bond’s terms and conditions, among other things.

                                                                         F-30
Table of Contents

                                                           SharePlus Federal Bank
                                                Notes to Financial Statements—(Continued)
                                                           (Dollars in thousands)


Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis. The instruments are not measured at fair
value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of
impairment). Certain impaired loans are reported at the fair value of underlying collateral if repayment is expected solely from the collateral.
Collateral values are estimated using Level 2 inputs based on observable market data such as independent appraisals or level 3 inputs based on
customized discounting.

At March 31, 2010 (unaudited), December 31, 2009 and 2008, impaired loans (with allocated allowance for losses) had principal balances of
$3,238, $543 and $700, respectively, and allocated allowance for losses of $870, $168 and $35, respectively.

Note 17. Disclosure About the Fair Value of Financial Instruments
The estimated fair values of the Bank’s financial instruments at March 31, 2010 (unaudited) and December 31, 2009 and 2008 were as follows:

                                                                      March 31,
                                                                        2010                                               December 31,
                                                                                                           2009                                   2008
                                                                Carrying       Estimated        Carrying              Estimated        Carrying              Estimated
                                                                Amount         Fair Value       Amount                Fair Value       Amount                Fair Value
                                                                      (Unaudited)
Financial assets:
    Cash and cash equivalents                               $     35,542     $     35,542   $     11,717          $      11,717    $        5,731        $       5,731
    Securities available for sale                                 13,281           13,281         13,492                 13,492             8,048                8,048
    Fixed annuity investment                                       1,098            1,098          1,088                  1,088             1,039                1,039
    Restricted stock                                               1,654            1,654          1,655                  1,655             1,570                1,570
    Loans and loans held for sale                                167,189          167,682        171,467                172,330           164,932              165,201
    Accrued interest receivable                                      795              795            764                    764               717                  717
Financial liabilities:
    Deposit accounts                                             192,191          189,046        172,591                173,364           141,508              141,799
    Accrued interest payable                                          45               45             45                     45                88                   88
    FHLB advances                                                 15,998           16,218         15,995                 16,230            30,534               30,483
Off-balance sheet assets (liabilities):
     Commitments to extend credit                                     —               —               —                      —               —                      —

   Fair Values of Financial Instruments
The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced
liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for
the Bank’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present
value or other valuation

                                                                         F-31
Table of Contents

                                                            SharePlus Federal Bank
                                                 Notes to Financial Statements—(Continued)
                                                            (Dollars in thousands)


techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.
Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC 820 excludes certain financial
instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not
necessarily represent the underlying fair value of the Bank.

   Cash and short-term instruments
The carrying amounts of cash and short-term instruments approximate their fair value.

   Securities
See Note 16 to Financial Statements for methods and assumptions used to estimate fair values for securities.

The carrying value of Federal Home Loan Bank stock and other restricted equities approximate fair value based on the redemption provisions
of the Federal Home Loan Bank.

   Fixed annuity investment
The carrying amount approximates fair value.

   Loans and loans held for sale
For variable-rate loans that reprice frequently and have no significant changes in credit risk, fair values are based on carrying values. Fair
values for real estate and commercial loans are estimated using discounted cash flow analyses, using interest rates currently being offered for
loans with similar terms to borrowers of similar credit quality. Fair values for impaired loans are estimated using discounted cash flow analyses
or underlying collateral values, where applicable. Fair value of loans held for sale is based on commitments on hand from investors or
prevailing market rates.

   Deposits
The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is their
carrying amounts). The carrying amounts of variable-rate, fixed term money market accounts and variable-rate certificates of deposit (CD’s)
approximate their fair values at the reporting date. Fair values for fixed-rate CD’s are estimated using a discounted cash flow calculation that
applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

   Advances from Federal Home Loan Bank
The fair value of advances from the Federal Home Loan Bank maturing within 90 days approximates carrying value. Fair value of other
advances is based on the discounted value of contractual cash flows based on the Bank’s current incremental borrowing rate for similar
borrowing arrangements.

                                                                       F-32
Table of Contents

                                                           SharePlus Federal Bank
                                                Notes to Financial Statements—(Continued)
                                                           (Dollars in thousands)


   Accrued interest
The carrying amounts of accrued interest approximate their fair values.

   Off-balance sheet instruments
Commitments to extend credit and standby letters of credit have short maturities and therefore have no significant fair value.

Note 18. Subsequent Event - Plan of Conversion
On April 1, 2010, the Bank’s Board of Directors adopted a Plan of Conversion to convert from a federal mutual savings bank to a capital stock
corporation (Conversion). A new federally-chartered corporation will be formed as the holding company for the Bank.

Shares of the new holding company’s common stock will be offered in a subscription offering pursuant to non-transferable subscription rights
at a predetermined and uniform price in the following order of preference: (1) to the eligible account holders of record of SharePlus Federal
Bank (Bank) as of March 31, 2009; (2) to tax qualified employee stock benefit plans; (3) if applicable, to supplemental eligible account holders
of record as of the last day of the calendar quarter preceding OTS approval of the Conversion; and (4) any person other than an eligible account
holder or a supplemental eligible account holder, holding a qualifying deposit on the voting record date. Concurrently with the subscription
offering, shares not subscribed for in the subscription offering will be offered to the general public in a direct community offering with
preference given first to natural persons residing in the Texas counties of Dallas, Collin, Denton, Rockwall, Hunt, Kaufman, Ellis, Tarrant,
Grayson and Fannin, the California county of Orange and the Kentucky county of Jefferson; and thereafter to other members of the general
public.

Subsequent to the Conversion, voting rights will be held and exercised exclusively by the stockholders of the new holding company. Deposit
account holders will continue to be insured by the FDIC. A liquidation account will be established in an amount equal to the Bank’s total equity
as of the latest balance sheet date in the final prospectus used in the Conversion. Each eligible account holder or supplemental account holder
will be entitled to a proportionate share of this account in the event of a complete liquidation of the Bank, and only in such event. This share
will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record
and will cease to exist if the account is closed. The liquidation account will never be increased despite any increase after Conversion in the
related deposit balance.

Following completion of the Conversion, the Bank may not declare, pay a dividend on, or repurchase any of its capital stock of the Bank, if the
effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements. Any
purchase of the new holding company’s common stock will be conducted in accordance with applicable laws and regulations.

Conversion costs will be deferred and reduce the proceeds from the shares sold in the Conversion. If the Conversion is not completed, all costs
will be expensed. At March 31, 2010 (unaudited), deferred conversion costs amounted to $11.

The transaction is subject to certain conditions, including the required regulatory approvals and approval of the Plan of Conversion by the
Bank.

                                                                      F-33
Table of Contents




You should rely only on the information contained in this document or that to which we have referred you. No person has been
authorized to give any information or to make any representation other than as contained in this prospectus and, if given or made,
such other information or representation must not be relied upon as having been authorized by SP Bancorp, Inc. or SharePlus Federal
Bank. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby to any
person in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation
is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the
delivery of this prospectus nor any sale hereunder shall under any circumstances create any implication that there has been no change
in the affairs of SP Bancorp, Inc. or SharePlus Federal Bank since any of the dates as of which information is furnished herein or since
the date hereof.


                                           SP BANCORP, INC.
                                                 (Proposed Holding Company for
                                                     SharePlus Federal Bank)

                                                Up to 1,725,000 Shares of
                                                     Common Stock
                                                Par value $0.01 per share
                                     (Subject to Increase to up to 1,983,750 Shares)

                                                           PROSPECTUS


                                       Sandler O’Neill & Partners, L.P.
                                                            August ____, 2010


Until [expiration date] or 25 days after commencement of the syndicated community offering, if any, whichever is later, all dealers that
effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in
addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or
subscriptions.
Table of Contents

                                      PART II: INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.      Other Expenses of Issuance and Distribution

                                                                                                                                 Amount (1)
      *             Registrant’s Legal Fees and Expenses                                                                     $       375,000
      *             Registrant’s Accounting Fees and Expenses                                                                        225,000
      *             Conversion Agent and Data Processing Fees                                                                         20,000
      *             Marketing Agent Fees (1)                                                                                         243,000
      *             Marketing Agent Expenses (Including Legal Fees and Expenses)                                                     100,000
      *             Appraisal Fees and Expenses                                                                                       50,000
      *             Printing, Postage, Mailing and EDGAR Fees                                                                        200,000
      *             Filing Fees (OTS, Nasdaq, FINRA and SEC)                                                                          65,600
      *             Business Plan Fees and Expenses                                                                                   33,500
      *             Other                                                                                                             45,900
      *             Total                                                                                                    $     1,358,000



*     Estimated
(1)   SP Bancorp, Inc. has retained Sandler O’Neill & Partners, L.P. to assist in the sale of common stock on a best efforts basis in the
      offerings. Fees are estimated at the adjusted maximum of the offering range.

Item 14.      Indemnification of Directors and Officers
      Articles 10 and 11 of the Articles of Incorporation of SP Bancorp, Inc. (the ―Corporation‖) set forth circumstances under which directors,
officers, employees and agents of the Corporation may be insured or indemnified against liability which they incur in their capacities as such:

      ARTICLE 10. Indemnification, etc. of Directors and Officers.
       A. Indemnification. The Corporation shall indemnify (1) its current and former directors and officers, whether serving the Corporation
or at its request any other entity, to the fullest extent required or permitted by the MGCL now or hereafter in force, including the advancement
of expenses under the procedures and to the fullest extent permitted by law, and (2) other employees and agents to such extent as shall be
authorized by the Board of Directors and permitted by law; provided, however, that, except as provided in Section B of this Article 10 with
respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.

      B. Procedure. If a claim under Section A of this Article 10 is not paid in full by the Corporation within sixty (60) days after a written
claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period
shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the
claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall also be entitled to be reimbursed the expense of prosecuting or defending such suit. It shall
be a defense to any action for advancement of expenses that the Corporation has not received both (i) an undertaking as required by law to
repay such advances in the event it shall ultimately be determined that the standard of conduct has not been met and (ii) a written affirmation
by the indemnitee of his good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met. In (i) any
suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to
an advancement of expenses) it shall be a defense that, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable

                                                                       II-1
Table of Contents

standard for indemnification set forth in the MGCL. Neither the failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the MGCL, nor an actual
determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not
met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in
the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under
this Article 10 or otherwise shall be on the Corporation.

      C. Non-Exclusivity. The rights to indemnification and to the advancement of expenses conferred in this Article 10 shall not be exclusive
of any other right that any Person may have or hereafter acquire under any statute, these Articles, the Corporation’s Bylaws, any agreement,
any vote of stockholders or the Board of Directors, or otherwise.

     D. Insurance. The Corporation may maintain insurance, at its expense, to insure itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such Person against such expense, liability or loss under the MGCL.

      E. Miscellaneous. The Corporation shall not be liable for any payment under this Article 10 in connection with a claim made by any
indemnitee to the extent such indemnitee has otherwise actually received payment under any insurance policy, agreement, or otherwise, of the
amounts otherwise indemnifiable hereunder. The rights to indemnification and to the advancement of expenses conferred in Sections A and B
of this Article 10 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall
inure to the benefit of the indemnitee’s heirs, executors and administrators.

      F. Limitations Imposed by Federal Law. Notwithstanding any other provision set forth in this Article 10, in no event shall any
payments made by the Corporation pursuant to this Article 10 exceed the amount permissible under applicable federal law, including, without
limitation, Section 18(k) of the Federal Deposit Insurance Act and the regulations promulgated thereunder.

      Any repeal or modification of this Article 10 shall not in any way diminish any rights to indemnification or advancement of expenses of
such director or officer or the obligations of the Corporation arising hereunder with respect to events occurring, or claims made, while this
Article 10 is in force.

      ARTICLE 11. Limitation of Liability. An officer or director of the Corporation, as such, shall not be liable to the Corporation or its
stockholders for money damages, except (A) to the extent that it is proved that the Person actually received an improper benefit or profit in
money, property or services, for the amount of the benefit or profit in money, property or services actually received; or (B) to the extent that a
judgment or other final adjudication adverse to the Person is entered in a proceeding based on a finding in the proceeding that the Person’s
action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding;
or (C) to the extent otherwise provided by the MGCL. If the MGCL is amended to further eliminate or limit the personal liability of officers
and directors, then the liability of officers and directors of the Corporation shall be eliminated or limited to the fullest extent permitted by the
MGCL, as so amended.

      Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or
protection of a director or officer of the Corporation existing at the time of such repeal or modification.

Item 15.      Recent Sales of Unregistered Securities
      Not Applicable.

                                                                        II-2
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Item 16.       Exhibits and Financial Statement Schedules:
       The exhibits and financial statement schedules filed as part of this registration statement are as follows:

     (a) List of Exhibits

 1.1        Engagement Letter between SharePlus Federal Bank and Sandler O’Neill & Partners, L.P.
 1.2        Form of Agency Agreement between SharePlus Federal Bank and SP Bancorp, Inc., and Sandler O’Neill & Partners, L.P.
 2          Plan of Conversion
 3.1        Articles of Incorporation of SP Bancorp, Inc.
 3.2        Bylaws of SP Bancorp, Inc.
 4          Form of Common Stock Certificate of SP Bancorp, Inc.
 5          Opinion of Luse Gorman Pomerenk & Schick, P.C. regarding legality of securities being registered
 8          Form of Federal Tax Opinion of Luse Gorman Pomerenk & Schick, P.C.
10.1        2009 Incentive Compensation Plan
10.2        2008 Nonqualified Deferred Compensation Plan
10.3        Phantom Stock Plan
 21         Subsidiaries of Registrant
23.1        Consent of Luse Gorman Pomerenk & Schick, P.C. (contained in Opinions included as Exhibits 5 and 8)
23.2        Consent of RSM McGladrey, Inc.
23.3        Consent of RP Financial, LC.
 24         Power of Attorney (set forth on signature page)
99.1        Appraisal Agreement between SharePlus Federal Bank and RP Financial, LC.
99.2        Letter of RP Financial, LC. with respect to Subscription Rights
99.3        Appraisal Report of RP Financial, LC.**
99.4        Marketing Materials
99.5        Stock Order and Certification Form
99.6        Business Plan Agreement with Feldman Financial Advisors, Inc.
99.7        Conversion Agent Agreement between Sandler O’Neill & Partners, L.P. and SharePlus Federal Bank

*       To be filed supplementally or by amendment.
**      Supporting financial schedules filed in paper format only pursuant to Rule 202 of Regulation S-T. Available for inspection during
        business hours at the principal offices of the SEC in Washington, D.C.

     (b) Financial Statement Schedules
      No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial
statements or related notes.

Item 17.       Undertakings
       The undersigned Registrant hereby undertakes:

       (1) To file, during any period in which it offers or 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;
            (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 the total
II-3
Table of Contents

      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 percent change in the maximum aggregate offering price set forth
      in the ―Calculation of Registration Fee‖ table in the effective registration statement;
            (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.

    (2) That, for the purpose of determining any liability under the Securities Act of 1933, 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.

     (3) 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.

      (4) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final adjudication of such issue.

       (5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:

      The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
           (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to
      Rule 424 (§230.424 of this chapter);
            (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to
      by the undersigned registrant;
            (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
      registrant or its securities provided by or on behalf of the undersigned registrant; and
            (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

       (6) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.

                                                                         II-4
Table of Contents

      (7) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a
form of prospectus 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.

       (8) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

                                                                      II-5
Table of Contents

                                                                 SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Plano, State of Texas on June 21, 2010.

                                                                                        SP BANCORP, INC.

                                                                                        By:            /S/    J EFFREY L. W EAVER
                                                                                                                  Jeffrey L. Weaver
                                                                                                        President and Chief Executive Officer
                                                                                                          (Duly Authorized Representative)


                                                           POWER OF ATTORNEY

       We, the undersigned directors and officers of SP Bancorp, Inc. (the ―Company‖) hereby severally constitute and appoint Jeffrey L.
Weaver as our true and lawful attorney and agent, to do any and all things in our names in the capacities indicated below which said Jeffrey L.
Weaver may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the registration statement on Form S-1 relating to the offering of
the Company’s common stock, including specifically, but not limited to, power and authority to sign for us in our names in the capacities
indicated below the registration statement and any and all amendments (including post-effective amendments) thereto; and we hereby approve,
ratify and confirm all that said Jeffrey L. Weaver shall do or cause to be done by virtue thereof.

     Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

                        Signatures                                                            Title                                             Date


         /S/     J EFFREY L. W EAVER                                    President, Chief Executive Officer and                                  June
                     Jeffrey L. Weaver                                  Director (Principal Executive Officer)                                   21,
                                                                                                                                                2010

          /S/       S UZANNE C. S ALLS                                  Senior Vice President and Chief Financial                               June
                      Suzanne C. Salls                                  Officer (Principal Financial and Accounting                              21,
                                                                        Officer)                                                                2010

           /S/      P AUL Z MIGROSKY                                    Chairman of the Board                                                   June
                      Paul Zmigrosky                                                                                                             21,
                                                                                                                                                2010

          /S/       R ICHARD H OLLAND                                   Vice Chairman of the Board                                              June
                      Richard Holland                                                                                                            21,
                                                                                                                                                2010

             /S/      D AVID R ADER                                     Director                                                                June
                       David Rader                                                                                                               21,
                                                                                                                                                2010

            /S/      P. S TAN K EITH                                    Director                                                                June
                       P. Stan Keith                                                                                                             21,
                                                                                                                                                2010

         /S/     C HRISTOPHER C OZBY                                    Director                                                                June
                     Christopher Cozby                                                                                                           21,
                                                                                                                                                2010

           /S/       C ARL F ORSYTHE                                    Director                                                                June
                       Carl Forsythe                                                                                                             21,
                                                                                                                                                2010
/S/   D AVID S TEPHENS   Director   June
       David Stephens                21,
                                    2010

/S/   J EFF W ILLIAMS    Director   June
        Jeff Williams                21,
                                    2010
Table of Contents

                                                                  EXHIBIT INDEX

     1.1        Engagement Letter between SharePlus Federal Bank and Sandler O’Neill & Partners, L.P.
     1.2        Form of Agency Agreement between SharePlus Federal Bank and SP Bancorp, Inc., and Sandler O’Neill & Partners, L.P.
     2          Plan of Conversion
     3.1        Articles of Incorporation of SP Bancorp, Inc.
     3.2        Bylaws of SP Bancorp, Inc.
  4             Form of Common Stock Certificate of SP Bancorp, Inc.
  5             Opinion of Luse Gorman Pomerenk & Schick, P.C. regarding legality of securities being registered
  8             Form of Federal Tax Opinion of Luse Gorman Pomerenk & Schick, P.C.
 10.1           2009 Incentive Compensation Plan
 10.2           2008 Nonqualified Deferred Compensation Plan
 10.3           Phantom Stock Plan
 21             Subsidiaries of Registrant
 23.1           Consent of Luse Gorman Pomerenk & Schick, P.C. (contained in Opinions included as Exhibits 5 and 8)
 23.2           Consent of RSM McGladrey, Inc.
 23.3           Consent of RP Financial, LC.
 24             Power of Attorney (set forth on signature page)
 99.1           Appraisal Agreement between SharePlus Federal Bank and RP Financial, LC.
 99.2           Letter of RP Financial, LC. with respect to Subscription Rights
 99.3           Appraisal Report of RP Financial, LC.**
 99.4           Marketing Materials
 99.5           Stock Order and Certification Form
 99.6           Business Plan Agreement with Feldman Financial Advisors, Inc.
 99.7           Conversion Agent Agreement between Sandler O’Neill & Partners, L.P. and SharePlus Federal Bank

*          To be filed supplementally or by amendment.
**         Supporting financial schedules filed in paper format only pursuant to Rule 202 of Regulation S-T. Available for inspection during
           business hours at the principal offices of the SEC in Washington, D.C.
Table of Contents

                    As filed with the Securities and Exchange Commission on July 2, 2010
                                                                                           Registration No. 333-




                             SECURITIES AND EXCHANGE COMMISSION
                                      Washington, D.C. 20549




                                            EXHIBITS
                                               TO
                                     REGISTRATION STATEMENT
                                               ON
                                            FORM S-1




                                             SP Bancorp, Inc.

                                               Plano, Texas
                                                                                                                                      Exhibit 1.1

February 10, 2010

Board of Directors
SharePlus Federal Bank
5224 West Plano Parkway
Plano, Texas 75093

Attention:       Mr. Jeffrey L. Weaver
                 President & Chief Executive Officer
Ladies and Gentlemen:

       Sandler O’Neill & Partners, L.P. (―Sandler O’Neill‖) is pleased to act as an independent financial advisor to SharePlus Federal Bank (the
―Bank‖) in connection with the Bank’s proposed conversion from mutual to stock form (the ―Conversion‖), including the offer and sale of
certain shares of the common stock of the proposed new holding company for the Bank (the ―Holding Company‖) to the Bank’s eligible
account holders in a Subscription Offering and, under certain circumstances, to members of the Bank’s community in a Direct Community
Offering and to the general public in a Syndicated Community Offering (collectively, the ―Offering‖). For purposes of this letter, the term
―Actual Purchase Price‖ shall mean the price at which the shares of the Holding Company’s common stock are sold in the Conversion. This
letter agreement (the ―Agreement‖) is to confirm the terms and conditions of our engagement.

ADVISORY SERVICES
      Sandler O’Neill will act as a consultant and advisor to the Bank and the Holding Company and will work with the Bank’s management,
counsel, accountants and other advisors in connection with the Conversion and the Offering. We anticipate that our services will include the
following, each as may be necessary and as the Bank may reasonably request:
      1.     Consulting as to the securities marketing implications of any aspect of the Plan of Conversion (the ―Plan‖) or related corporate
             documents;
                                                                                                                             Board of Directors
                                                                                                                        SharePlus Federal Bank
                                                                                                                             February 10, 2010
                                                                                                                                        Page 2

      2.    Reviewing with the Board of Directors the independent appraiser’s appraisal of the common stock;
      3.    Reviewing all offering documents, including the Prospectus, stock order forms and related offering materials (it being understood
            that preparation and filing of such documents will be the responsibility of the Bank and the Holding Company and their counsel);
      4.    Assisting in the design and implementation of a marketing strategy for the Offering;
      5.    Assisting in obtaining all requisite regulatory approvals;
      6.    Assisting Bank management in scheduling and preparing for meetings with potential investors and broker-dealers; and
      7.    Providing such other general advice and assistance as may be requested to promote the successful completion of the Conversion.

SUBSCRIPTION AND DIRECT COMMUNITY OFFERING FEES
      If the Conversion is consummated, the Bank agrees to pay Sandler O’Neill for its services hereunder a fee of one and one-half percent
(1.50%) of the aggregate Actual Purchase Price of the shares of common stock sold in the Subscription Offering and Direct Community
Offering, excluding in each case shares purchased by (i) any employee benefit plan of the Holding Company or the Bank established for the
benefit of their respective directors, officers and employees, (ii) any charitable foundation established by the Holding Company or the Bank (or
any shares contributed to such a charitable foundation), and (iii) any director, officer or employee of the Holding Company or the Bank or
members of their immediate families; provided, however , that the aggregate fee set forth above shall not be less than $150,000.

      All fees payable to Sandler O’Neill hereunder shall be payable in cash at the time of the closing of the Conversion. In recognition of the
long lead times involved in the conversion process, the Bank agrees to make an advance payment to Sandler O’Neill in the amount of $25,000,
payable upon execution of this Agreement, which shall be credited against any fees or reimbursement of expenses payable hereunder. In the
event that the advance payment exceeds the amount due in payment of fees and reimbursement of expenses hereunder, the excess shall be
refunded to the Company.
                                                                                                                              Board of Directors
                                                                                                                         SharePlus Federal Bank
                                                                                                                              February 10, 2010
                                                                                                                                         Page 3

      If (i) Sandler O’Neill’s engagement hereunder is terminated for any of the reasons provided for under the second paragraph of the section
of this Agreement captioned ―Definitive Agreement,‖ or (ii) the Conversion is terminated by the Bank, no fees shall be payable by the Bank to
Sandler O’Neill hereunder; however, the Bank shall reimburse Sandler O’Neill for its reasonable out-of-pocket expenses incurred in connection
with its engagement hereunder.

SYNDICATED COMMUNITY OFFERING
       If any shares of Common Stock remain available after the expiration of the Subscription Offering and Direct Community Offering, at the
request of the Company and subject to the continued satisfaction of the conditions set forth in the second paragraph under the caption
―Definitive Agreement‖ below, Sandler O’Neill will assist the Company in offering the stock for sale in a Syndicated Community Offering on
a best efforts basis, subject to the terms and conditions set forth in a selected dealers agreement. In consultation with the Company, Sandler
O’Neill may seek to form a syndicate of registered dealers to assist in the Syndicated Community Offering. With respect to any shares of the
Common Stock sold by Sandler O’Neill or any other FINRA member firm in the Syndicated Community Offering, the Company agrees to pay:
(a) the sales commission payable to such firms under the selected dealer agreement, and (b) a management fee to Sandler O’Neill. Sandler
O’Neill will endeavor to limit the aggregate fees to be paid by the Company under any such selected dealers agreements to an amount
competitive with gross underwriting discounts charged at such time for underwritings of comparable amounts of stock sold at a comparable
price per share in a similar market environment, which shall not exceed 6.5% of the aggregate Actual Purchase Price of the shares sold in the
Syndicated Community Offering. Sandler O’Neill will endeavor to distribute the Common Stock among dealers in a fashion that best meets the
distribution objectives of the Company and the requirements of the Plan, which may result in limiting the allocation of stock to certain selected
dealers. It is understood that in no event shall Sandler O’Neill or any other broker-dealer be obligated to act as a selected dealer or to take or
purchase any shares of the Common Stock in the Offering.

COSTS AND EXPENSES
      In addition to any fees that may be payable to Sandler O’Neill hereunder and the expenses to be borne by the Bank pursuant to the
following paragraph, the Bank agrees to reimburse Sandler O’Neill, upon request made from time to time, for its reasonable out-of-pocket
expenses incurred in connection with its engagement hereunder, regardless of whether the Conversion is consummated, including, without
limitation, legal fees and expenses, advertising, promotional, and travel expenses, up to a maximum of $100,000 (or $125,000 if there is a
Syndicated Community Offering); provided, however , that Sandler O’Neill shall document such expenses to the reasonable satisfaction of the
Bank. The provisions of this paragraph are not intended to apply to or in any way impair the indemnification provisions of this letter.
                                                                                                                                Board of Directors
                                                                                                                           SharePlus Federal Bank
                                                                                                                                February 10, 2010
                                                                                                                                           Page 4

      As is customary, the Bank will bear all other expenses incurred in connection with the Conversion and the Offerings, including, without
limitation, (i) the cost of obtaining all securities and bank regulatory approvals, including any required FINRA filing fees; (ii) the cost of
printing and distributing the offering materials; (iii) the costs of blue sky qualification (including fees and expenses of blue sky counsel) of the
shares in the various states; (iv) listing fees; and (v) all fees and disbursements of the Bank’s and the Holding Company’s counsel, accountants,
conversion agent and other advisors. In the event Sandler O’Neill incurs any such fees and expenses on behalf of the Bank or the Holding
Company, the Bank will reimburse Sandler O’Neill for such fees and expenses whether or not the Conversion is consummated; provided,
however , that Sandler O’Neill shall not incur any substantial expenses on behalf of the Bank or the Holding Company pursuant to this
paragraph without the prior approval of the Bank.

POST-CONVERSION GENERAL ADVISORY SERVICES
      If the Conversion is consummated, Sandler O’Neill agrees to act as an independent financial advisor to the Holding Company, the Bank
and their subsidiaries (referred to collectively in this paragraph as the ―Company‖) in connection with the Company’s general strategic
planning (―General Advisory Services‖). In connection with such General Advisory Services, we would expect to work with the Company’s
management, its counsel, accountants and other advisors to assess the Company’s strategic alternatives and help implement a tactical plan to
enhance the value of the Company. We anticipate that our activities would include, as appropriate, those activities outlined in Exhibit A hereto.
Sandler O’Neill shall provide such services at the Company’s request for a period of one year following the completion of the Conversion;
provided, however , that the Company shall reimburse Sandler O’Neill for its reasonable out-of-pocket expenses incurred in connection with
providing such services. Thereafter, if both parties wish to continue the relationship, the parties will enter into a separate advisory services
agreement on terms and conditions to be negotiated at such time. Notwithstanding the above, the Company is under no obligation to receive or
request such services.

DUE DILIGENCE REVIEW
      Sandler O’Neill’s obligation to perform the services contemplated by this letter shall be subject to the satisfactory completion of such
investigation and inquiries relating to the Bank and the Holding Company, and their respective directors, officers, agents and employees, as
Sandler O’Neill and its counsel in their sole discretion may deem appropriate under the circumstances. In this regard, the Bank agrees that, at
its expense, it will make available to Sandler O’Neill all information which
                                                                                                                               Board of Directors
                                                                                                                          SharePlus Federal Bank
                                                                                                                               February 10, 2010
                                                                                                                                          Page 5

Sandler O’Neill requests, and will allow Sandler O’Neill the opportunity to discuss with the Bank’s and the Holding Company’s management
the financial condition, business and operations of the Bank and the Holding Company. The Bank and the Holding Company acknowledge that
Sandler O’Neill will rely upon the accuracy and completeness of all information received from the Bank and the Holding Company and their
directors, trustees, officers, employees, agents, independent accountants and counsel.

BLUE SKY MATTERS
      The Bank agrees that if Sandler O’Neill’s counsel does not serve as counsel with respect to blue sky matters in connection with the
Offerings, the Bank will cause the counsel performing such services to prepare a Blue Sky Memorandum related to the Offerings including
Sandler O’Neill’s participation therein and shall furnish Sandler O’Neill a copy thereof addressed to Sandler O’Neill or upon which such
counsel shall state Sandler O’Neill may rely.

CONFIDENTIALITY
      Other than as required by law or regulation, Sandler O’Neill agrees that it will use its best efforts not to disclose any Confidential
Information relating to the Bank obtained in connection with its engagement hereunder (whether or not the Conversion is consummated). As
used in this paragraph, the term ―Confidential Information‖ shall not include information which (i) is or becomes generally available to the
public other than as a result of a disclosure by Sandler O’Neill, (ii) was available to Sandler O’Neill on a non-confidential basis prior to its
disclosure to Sandler O’Neill by the Bank, or (iii) becomes available to Sandler O’Neill on a non-confidential basis from a person other than
the Bank who is not otherwise known to Sandler O’Neill to be bound not to disclose such information pursuant to a contractual, legal or
fiduciary obligation.

INDEMNIFICATION
     Since Sandler O’Neill will be acting on behalf of the Bank and the Holding Company in connection with the Conversion, the Holding
Company and the Bank agree to indemnify and hold Sandler O’Neill and its affiliates and their respective partners, directors, officers,
employees, agents and controlling persons within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities
Exchange Act of 1934 (Sandler O’Neill and each such person being an ―Indemnified Party‖) harmless from and against any and all losses,
claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under applicable federal or state law, or
otherwise, related to or arising out of the Conversion or the engagement of Sandler O’Neill pursuant
                                                                                                                                Board of Directors
                                                                                                                           SharePlus Federal Bank
                                                                                                                                February 10, 2010
                                                                                                                                           Page 6

to, or the performance by Sandler O’Neill of the services contemplated by, this letter, and will reimburse any Indemnified Party for all
expenses (including reasonable legal fees and expenses) as they are incurred, including expenses incurred in connection with the investigation
of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such
Indemnified Party is a party; provided, however , that the Bank and the Holding Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense (i) arises out of or is based upon any untrue statement of a material fact or the omission of a
material fact required to be stated therein or necessary to make not misleading any statements contained in any final prospectus, or any
amendment or supplement thereto made in reliance on and in conformity with written information furnished to the Bank by Sandler O’Neill
expressly for use therein, or (ii) is primarily attributable to the gross negligence, willful misconduct or bad faith of Sandler O’Neill. If the
foregoing indemnification is unavailable for any reason, the Bank and the Holding Company agree to contribute to such losses, claims,
damages, liabilities and expenses in the proportion that its financial interest in the Conversion bears to that of Sandler O’Neill.

DEFINITIVE AGREEMENT
      Sandler O’Neill and the Bank agree that (a) except as set forth in clause (b), the foregoing represents the general intention of the Bank
and Sandler O’Neill with respect to the services to be provided by Sandler O’Neill in connection with the Offerings, which will serve as a basis
for Sandler O’Neill commencing activities, and (b) the only legal and binding obligations of the Bank, the Holding Company and Sandler
O’Neill with respect to the subject matter hereof shall be (1) the Bank’s obligation to reimburse costs and expenses pursuant to the section
captioned ―Costs and Expenses,‖ (2) those set forth under the captions ―Confidentiality‖ and ―Indemnification,‖ and (3) as set forth in a duly
negotiated and executed definitive Agency Agreement to be entered into prior to the commencement of the Subscription Offering relating to
the services of Sandler O’Neill in connection with the Offerings. Such Agency Agreement shall be in form and content satisfactory to Sandler
O’Neill, the Bank and the Holding Company and their respective counsel and shall contain standard indemnification provisions consistent
herewith.

      Sandler O’Neill’s execution of such Agency Agreement shall also be subject to (i) Sandler O’Neill’s satisfaction with its investigation of
the Bank’s business, financial condition and results of operations, (ii) preparation of offering materials that are satisfactory to Sandler O’Neill
and its counsel, (iii) compliance with all relevant legal and regulatory requirements to the reasonable satisfaction of Sandler O’Neill’s counsel,
(iv) agreement that the price established by the independent appraiser is reasonable and (v) market conditions at the time of the proposed
offering. Sandler O’Neill may terminate this Agreement if such Agency Agreement is not entered into prior to December 31, 2010.
                                                                                                                               Board of Directors
                                                                                                                          SharePlus Federal Bank
                                                                                                                               February 10, 2010
                                                                                                                                          Page 7

ELIMINATION OF HOLDING COMPANY
      If the Board of Directors of the Bank, for any reason, elects not to proceed with the formation of the Holding Company but determines to
proceed with the Conversion and substitute the common stock of the Bank for the common stock of the Holding Company, all of the provisions
of this letter relating to the common stock of the Holding Company will be deemed to pertain to the common stock of the Bank on the same
terms and conditions that such provisions pertain to the common stock of the Holding Company and all of the references in this letter to the
Holding Company shall be deemed to refer to the Bank or shall have no effect, as the context of the reference requires.

       Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Sandler O’Neill the duplicate copy of this
letter enclosed herewith.

                                                                                       Very truly yours,

                                                                                       Sandler O’Neill & Partners, L.P.

                                                                                       By: Sandler O’Neill & Partners Corp.,
                                                                                           the sole general partner

                                                                                       By: /s/ Catherine A. Lawton
                                                                                           Catherine A. Lawton
                                                                                           An Officer of the Corporation

Accepted and agreed to as of
the date first above written:

SharePlus Federal Bank

By:   /s/ Jeffrey L. Weaver
Name: Jeffrey L. Weaver
Its:  President & Chief Executive Officer
                                                                EXHIBIT A

                                                   GENERAL ADVISORY SERVICES



1.   A review and analysis of the Company’s current business and financial condition, including its operating strategies, balance sheet
     composition, historical operating performance, branch structure and market share, and the Company’s competitive position relative to
     selected peer groups;
2.   Creation of a base case financial model to serve as a benchmark for analyzing alternative strategies and market environments;
3.   An analysis of the impact on the franchise value of altering the Company’s dividend policy, implementing a stock repurchase program,
     or changing the asset mix or other operating activities;
4.   An analysis of the Company’s acquisition resources, objectives and capacity to compete for acquisition opportunities;
5.   A summary of recent merger and acquisition trends in the financial services industry, including tactics employed by others and typical
     terms and values involved;
6.   A review of other strategic alternatives which could provide long-term benefits and enhanced value to the Company;
7.   A review with the Board of Directors of the Company of Sandler O’Neill’s findings, with periodic updates as may be requested;
8.   Ongoing general advice and counsel to management and the Board of Directors of the Company with respect to strategic and tactical
     issues; and
9.   Rendering such other financial advisory and investment banking services as may from time to time be agreed upon by Sandler O’Neill
     and the Company.
                                                                                                                                   Exhibit 1.2

                                                             Up to 1,725,000 Shares
                                                  (subject to increase up to 1,983,750 shares)

                                                               SP Bancorp, Inc.
                                                           (a Maryland corporation)

                                                                Common Stock
                                                          (par value $0.01 per share)

                                                          AGENCY AGREEMENT

                                                                           , 2010

S ANDLER O’N EILL & P ARTNERS , L.P.
919 Third Avenue, 6 th Floor
New York, New York 10022

Ladies and Gentlemen:

SP Bancorp, Inc., a Maryland corporation (the ―Company‖) and SharePlus Federal Bank, a federally chartered stock savings bank (the ―Bank‖),
hereby confirm their agreement with Sandler O’Neill & Partners, L.P. (―Sandler O’Neill‖ or the ―Agent‖) with respect to the offer and sale by
the Company of up to 1,725,000 shares of the Company’s common stock (subject to increase up to 1,983,750 shares in the event of an increase
in the pro forma market value of the Company’s common stock), par value $0.01 per share (the ―Common Stock‖). The shares of Common
Stock to be sold by the Company in the Conversion (as defined below) are hereinafter called the ―Securities.‖

      The Securities are being offered for sale in accordance with the Plan of Conversion (the ―Plan‖) adopted by the Board of Directors of the
Bank pursuant to which the Bank intends to convert from a federally-chartered mutual savings bank to a federally-chartered stock savings bank
and issue all of its stock to the Company. Pursuant to the Plan, the Company will offer to certain depositors of the Bank and to the Bank’s tax
qualified employee benefit plans, including the Bank’s employee stock ownership plan (the ―ESOP‖) and the Bank’s 401(k) Plan (collectively,
the ―Employee Plans‖) rights to subscribe for the Securities in a subscription offering (the ―Subscription Offering‖). To the extent Securities
are not subscribed for in the Subscription Offering, such Securities may be offered to certain members of the general public in a community
offering (the ―Community Offering‖), with preference given to natural persons residing in the Texas counties of Dallas, Collin, Denton,
Rockwall, Hunt, Kaufman, Ellis, Tarrant, Grayson, and Fannin, the California county of Orange and the Kentucky county of Jefferson, and
finally to other members of the general public. The Community Offering, which together with the Subscription Offering, as each may be
extended or reopened from time to time, are herein referred to as the ―Subscription and Community Offering,‖ is expected to be commenced
concurrently with the Subscription Offering. Any Securities not subscribed for in the Subscription and Community Offering may be offered,
subject to Section 2 hereof, in a syndicated community offering (the ―Syndicated Community Offering‖). The Subscription and Community
Offering and the Syndicated Community Offering are hereinafter referred to collectively as the ―Offerings,‖ and the conversion of the Bank
from the mutual to stock form, the acquisition of the capital stock of the Bank by the Company and the Offerings are hereinafter referred to
collectively as the ―Conversion.‖ It is acknowledged that the number of Securities to
be sold in the Conversion may be increased or decreased as described in the Prospectus (as hereinafter defined). If the number of Securities is
increased or decreased in accordance with the Plan, the term ―Securities‖ shall mean such greater or lesser number, where applicable.

      The Company has filed with the Securities and Exchange Commission (the ―Commission‖) a registration statement on Form S-1 (No.
333-            ), including a related prospectus, for the registration and sale of the Securities under the Securities Act of 1933, as amended (the
―Securities Act‖), has filed such amendments thereto, if any, and such amended prospectuses as may have been required to the date hereof by
the Commission in order to declare such registration statement effective, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such registration statement (as amended to date, if applicable, and as
from time to time amended or supplemented hereafter) and the prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the information, if any, deemed to be a part thereof pursuant to the rules
and regulations of the Commission under the Securities Act, as from time to time amended or supplemented pursuant to the Securities Act or
otherwise (the ―Securities Act Regulations‖)), are hereinafter referred to as the ―Registration Statement‖ and the ―Prospectus,‖ respectively,
except that if any revised prospectus shall be used by the Company in connection with the Subscription and Community Offering or the
Syndicated Community Offering which differs from the Prospectus on file at the Commission at the time the Registration Statement becomes
effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the Securities Act
Regulations), the term ―Prospectus‖ shall refer to such revised prospectus from and after the time it is first provided to the Agent for such use.

      Concurrently with the execution of this Agreement, the Company is delivering to the Agent copies of the Prospectus of the Company to
be used in the Subscription and Community Offering. Such prospectus contains information with respect to the Company, the Bank and the
Common Stock.

     SECTION 1. R EPRESENTATIONS AND W ARRANTIES .

     (a) The Company and the Bank jointly and severally represent and warrant to the Agent as of the date hereof as follows:
            (i) The Company qualifies as a ―smaller reporting company‖ under Securities Exchange Act of 1934 Rule 12b-2 and is entitled to
     file the Registration Statement as such. The Registration Statement has been declared effective by the Commission, no stop order has
     been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Company and the Bank,
     threatened by the Commission. At the time the Registration Statement became effective, at the Applicable Time (as defined in
     Section 1(a)(iii)(1) hereof), and at the Closing Time referred to in Section 2 hereof, the Registration Statement complied and will comply
     in all material respects with the requirements of the Securities Act and the Securities Act Regulations and did not and will not contain an
     untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein
     not misleading. The Prospectus as of the date hereof does not, and at the Closing Time referred to in Section 2 hereof will not, include an
     untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the
     circumstances
under which they were made, not misleading; provided, however , that the representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with
information with respect to the Agent furnished to the Company in writing by the Agent expressly for use in the Registration Statement or
Prospectus (which the Company and the Bank acknowledge appears only in the second sentence of the section entitled
―Summary—Market for Common Stock‖ and the third sentence of the section entitled ―Market for the Common Stock‖ in the Prospectus)
(the ―Agent Information‖).
      (ii) At the time of filing the Registration Statement relating to the offering of the Securities and as of the date hereof, the Company
was not, and is not, an ineligible issuer, as defined in Rule 405. At the time of the filing of the Registration Statement and at the time of
the use of any issuer free writing prospectus, as defined in Rule 433(h), the Company met the conditions required by Rules 164 and 433
for the use of a free writing prospectus. If required to be filed, the Company has filed any issuer free writing prospectus related to the
offered Securities at the time it is required to be filed under Rule 433 and, if not required to be filed, will retain such free writing
prospectus in the Company’s records pursuant to Rule 433(g) and if any issuer free writing prospectus is used after the date hereof in
connection with the offering of the Securities, the Company will file or retain such free writing prospectus as required by Rule 433.
       (iii) As of the Applicable Time, neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the
Applicable Time and the Statutory Prospectus, all considered together (collectively, the ―General Disclosure Package‖), nor (ii) any
individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or
omissions from any Prospectus included in the Registration Statement relating to the offered Securities or any Issuer-Represented Free
Writing Prospectus based upon and in conformity with the Agent Information. As used in this paragraph and elsewhere in this
Agreement:
           1. ―Applicable Time‖ means each and every date when a potential purchaser submitted a subscription or otherwise committed
     to purchase Securities.
           2. ―Statutory Prospectus‖, as of any time, means the Prospectus relating to the offered Securities that is included in the
     Registration Statement relating to the offered Securities immediately prior to that time, including any document incorporated by
     reference therein.
           3. ―Issuer-Represented Free Writing Prospectus‖ means any ―issuer free writing prospectus,‖ as defined in Rule 433(h),
     relating to the offered Securities. The term does not include any writing exempted from the definition of prospectus pursuant to
     clause (a) of Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule 173.
           4. ―Issuer-Represented General Free Writing Prospectus‖ means any Issuer-Represented Free Writing Prospectus that is
     intended for general distribution to prospective investors.
           5. ―Issuer-Represented Limited-Use Free Writing Prospectus‖ means any Issuer-Represented Free Writing Prospectus that is
     not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also
     includes any ― bona fide electronic road show,‖ as defined in Rule 433, that is made available without restriction pursuant to
     Rule 433(d)(8)(ii) or otherwise, even though not required to be filed with the Commission.
       (iv) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion
of the Offerings and sale of the offered Securities or until any earlier date that the Company notified or notifies the Agent (as described in
the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement relating to the offered Securities, including any document incorporated by reference therein that
has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement relating to the offered Securities or included or would include an
untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the
Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented and the
Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any
Issuer-Represented Free Writing Prospectus based upon and in conformity with the Agent Information.
      (v) The Company has filed with the OTS the Company’s application for approval of its acquisition of the Bank (the ―Holding
Company Application‖) on Form H-(e)1-S promulgated under the savings and loan holding company provisions of the Home Owners’
Loan Act, as amended (the ―HOLA‖) and the regulations promulgated thereunder. The Company has received written notice from the
OTS of its approval of the acquisition of the Bank, such approval remains in full force and effect and no order has been issued by the
OTS suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Company or the
Bank, threatened by the OTS. At the date of such approval and at the Closing Time referred to in Section 2 hereof, the Holding Company
Application complied and will comply in all material respects with the applicable provisions of HOLA and the regulations promulgated
thereunder and the Holding Company Application is truthful and accurate in all material respects.
      (vi) Pursuant to the rules and regulations of the OTS (the ―OTS Regulations‖), the Bank has filed with the OTS an Application for
Approval of Conversion on Form AC, and has filed such amendments thereto and supplementary materials as may have been required to
the date hereof (such application, as amended to date, if applicable, and as from time to time amended or supplemented hereafter, is
hereinafter referred to as the ―Conversion Application‖). The Offerings and the Plan have been duly adopted by the Boards of Directors
of the Company and the Bank and such adoption has not since been rescinded or revoked. The Conversion Application has been approved
by the OTS. The Prospectus and the proxy statement for the solicitation of proxies from the Bank’s members for the special meeting to
approve the Plan (the ―Members’ Proxy Statement‖), all included as part of the Conversion Application, have been approved for use by
the OTS, such approval remains in full force and effect and no order has been issued by the OTS suspending or revoking such approval
and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the OTS. At the date of
such approval and at the Closing Time referred to in Section 2 hereof, the Conversion Application complied and will comply in all
material respects with the applicable provisions of the OTS Regulations.
      (vii) At the time of their use, the Members’ Proxy Statement and any other proxy solicitation materials will comply in all material
respects with the applicable provisions of the OTS Regulations and the applicable rules and regulations of the Commission under the
Securities Exchange Act of 1934, as amended (the ―Exchange Act‖), as from time to time amended or supplemented pursuant to the
Exchange Act or otherwise (the ―Exchange Act Regulations‖) (the Securities Act Regulations and the Exchange Act Regulations are
collectively referred to herein as the ―Commission Regulations‖), and will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. The Company and the Bank will promptly file the Prospectus and any supplemental sales literature with the Commission and
the OTS. The Prospectus and all supplemental sales literature, as of the date the Registration Statement became effective and at the
Closing Time referred to in Section 2 hereof, complied and will comply in all material respects with the applicable requirements of the
OTS Regulations and the Securities Act Regulations and, at or prior to the time of their first use, will have received all required
authorizations of the OTS and Commission for use in final form.
     (viii) None of the Commission, the OTS, or any ―Blue Sky‖ authority has, by order or otherwise, prevented or suspended the use of
the Members’ Proxy Statement, the Prospectus or any supplemental sales literature authorized by the Company or the Bank for use in
connection with the Offerings, and no proceedings for such purposes are pending or threatened.
     (ix) At the Closing Time referred to in Section 2 hereof, the Company and the Bank will have completed the conditions precedent to
the Conversion in accordance with the Plan, the applicable OTS Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and provisions precedent to the Conversion imposed upon the Company or
the Bank by the OTS, or any other regulatory authority, other than those which the regulatory authority
permits to be completed after the Conversion. The Conversion, the Offerings and other transactions contemplated hereby do not and will
not require any material consent, approval, authorization or permit or filing with any other governmental agency or regulatory authority,
except as disclosed in the Prospectus.
      (x) RP Financial, LC. (the ―Appraiser‖), which prepared the valuation of the Bank as part of the Conversion, has advised the
Company and the Bank in writing that it satisfies all requirements for an appraiser set forth in the OTS Regulations and any
interpretations or guidelines issued by the OTS or its staff with respect thereto.
     (xi) McGladrey & Pullen, L.L.P., the accountants who audited and reported on the financial statements of the Bank included in the
Registration Statement have advised the Company and the Bank in writing that they are independent public accountants within the
meaning of Rule 101 of the American Institute of Certified Public Accountants (the ―AICPA‖), that they are registered with the Public
Company Accounting Oversight Board (the ―PCAOB‖), and such accountants are, with respect to the Company and the Bank,
independent certified public accountants as required by the Securities Act, the Securities Act Regulations and OTS Regulations and such
accountants are not in violation of the auditors independence requirements of the Sarbanes-Oxley Act of 2002 (the ―Sarbanes-Oxley
Act‖).
       (xii) The Bank has no subsidiaries. Neither the Company nor the Bank, directly or indirectly, controls any other corporation, limited
liability company, partnership, joint venture, association, trust or other business organization. Upon completion of the Conversion, the
only direct subsidiary of the Company will be the Bank.
       (xiii) The financial statements and the related notes thereto included in the Registration Statement and the Prospectus present fairly
the financial position of the Company and the Bank at the dates indicated and the results of operations, retained earnings, equity capital
and cash flows for the periods specified, and comply as to form with the applicable accounting requirements of the Securities Act
Regulations and the OTS Regulations; except as otherwise stated in the Registration Statement and Prospectus, said financial statements
have been prepared in conformity with generally accepted accounting principles applied on a consistent basis. The other financial,
statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited financial statements included in the Prospectus, and as to the pro forma adjustments, the
adjustments made therein have been consistently applied on the basis described therein.
      (xiv) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein: (A) there has been no material adverse change in the financial condition, results of operations, business affairs or
prospects of the Company and the Bank, whether or not arising in the ordinary course of business, (B) except for transactions specifically
referred to or contemplated in the Registration Statement and Prospectus, there have been no transactions entered into by the Company or
the Bank, other than those in the ordinary course of business, which are material with respect to the Company and the Bank, (C) the
capitalization, liabilities, assets, properties and business of the Company and the Bank conform in all material respects to the descriptions
contained in the Prospectus and
neither the Company nor the Bank has any material liabilities of any kind, contingent or otherwise, except as disclosed in the Registration
Statement or the Prospectus and (D) neither the Company nor the Bank has issued any securities or incurred any liability or obligation,
direct or contingent, or borrowed money, except borrowings in the ordinary course of business consistent with past practice from the
same or similar sources and in similar amounts as indicated in the Prospectus.
      (xv) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State
of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby; and the
Company is duly qualified to transact business and is in good standing in the State of Texas and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the financial condition, results of operations, business affairs or prospects of the
Company and the Bank, considered as one enterprise (a ―Material Adverse Effect‖).
      (xvi) Upon consummation of the Conversion, the authorized, issued and outstanding capital stock of the Company will be within
the range as set forth in the Prospectus under ―Capitalization‖ (except for subsequent issuances, if any, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus); except as set forth elsewhere in this Agreement, no shares of
Common Stock have been or will be issued and outstanding prior to the Closing Time referred to in Section 2 hereof; at the time of the
Conversion, the Securities will have been duly authorized for issuance and, when issued and delivered by the Company pursuant to the
Plan against payment of the consideration calculated as set forth in the Plan and stated on the cover page of the Prospectus, will be duly
and validly issued and fully paid and nonassessable; the terms and provisions of the Common Stock and the other capital stock of the
Company conform to all statements relating thereto contained in the Prospectus; the certificates representing the shares of Common Stock
will conform to the requirements of applicable law and regulations.
      (xvii) The Bank has been duly organized and is validly existing as a federally-chartered savings association in stock form with full
corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement and the transactions contemplated hereby. Upon consummation of the
Conversion, the Bank will continue to be a federally chartered savings association in stock form. The Company and the Bank have
obtained all licenses, permits and other governmental authorizations currently required for the conduct of their respective businesses or
required for the conduct of their respective businesses as contemplated by the Holding Company Application and the Conversion
Application, except where the failure to obtain such licenses, permits or other governmental authorizations would not have a Material
Adverse Effect on the financial condition, results of operations or business affairs of the Company and the Bank, considered as one
enterprise. All such licenses, permits and other governmental authorizations are in full force and effect and the Company and the Bank
are in all material respects in compliance therewith. Neither the Company nor the Bank has received notice of any proceeding or action
relating to the revocation or modification of any such license, permit or other governmental authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, might have a Material Adverse Effect on the financial condition,
results of operations or business affairs of the Company and the Bank, considered as one enterprise. The Bank is duly qualified to transact
business and is in good standing under the laws of the United States and in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not
have a Material Adverse Effect on the financial condition, results of operations or business affairs of the Company and the Bank,
considered as one enterprise.
      (xviii) The Bank is a member in good standing of the Federal Home Loan Bank of Dallas; the deposit accounts of the Bank are
insured by the FDIC up to the applicable limits and upon consummation of the Conversion, the liquidation account for the benefit of
eligible account holders and supplemental eligible account holders will be duly established in accordance with the requirements of the
OTS Regulations. The Bank is a ―qualified thrift lender‖ within the meaning of 12 U.S.C. Section 1467a(m).
       (xix) The authorized capital stock of the Company consists of                     shares of common stock, par value $0.01 per share
(the ―Company Common Stock‖) and                        shares of preferred stock, par value $0.01 per share (the ―Company Preferred Stock‖)
of which no shares of Company Common Stock and no shares of Company Preferred Stock are issued and outstanding as of the date
hereof. The authorized capital stock of the Bank will consist of 1,000 shares of common stock, par value $.01 per share (the ―Bank
Common Stock‖) and                     shares of preferred stock (the ―Bank Preferred Stock‖), par value $.01 per share. No shares of
Company Common Stock or Bank Common Stock, and no shares of Company Preferred Stock or Bank Preferred Stock will be issued
prior to the Closing Time referred to in Section 2 hereof. The issued and outstanding shares of Company Common Stock and Bank
Common Stock have been duly authorized and validly issued and are fully paid and nonassessable and have been issued in compliance
with all federal and state securities laws. The shares of Bank Common Stock to be issued to the Company will have been duly authorized
for issuance and, when issued and delivered by the Bank pursuant to the Plan against payment of the consideration described in the Plan
and in the Prospectus, will be duly and validly issued and fully paid and nonassessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; and the certificates representing the shares of the Bank Common Stock will conform with the requirements of applicable
laws and regulations. The issuance of the Bank Common Stock is not subject to preemptive or similar rights.
      (xx) The Company and the Bank have taken all corporate action necessary for them to execute, deliver and perform this Agreement
and the transactions contemplated hereby, and this Agreement has been duly executed and delivered by, and is the valid and binding
agreement of, the Company and the Bank, enforceable against each of them in accordance with its terms, except as may be limited by
bankruptcy, insolvency or similar laws and the availability of equitable remedies.
      (xxi) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus and prior
to the Closing Time, except as otherwise may be indicated or contemplated therein, neither the Company nor the Bank will have
(A) except as otherwise set forth herein issued any securities or incurred any liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business from the same or similar sources and in similar amounts as indicated in the
Prospectus, or (B) entered into any transaction or series of transactions which is material in light of the business of the Company and the
Bank.
      (xxii) No approval of any regulatory or supervisory or other public authority is required of the Company or the Bank in connection
with the execution and delivery of this Agreement or the issuance of the Securities that has not been obtained and a copy of which has
been delivered to the Agent, except as may be required under the securities laws of various jurisdictions.
       (xxiii) Neither the Company nor the Bank is in violation of its respective charter or bylaws; and neither the Company nor the Bank
is in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or the Bank is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or the Bank is subject, except for such defaults that would not, individually or in the aggregate, have a
Material Adverse Effect on the financial condition, results of operations, business affairs or prospects of the Company or the Bank,
considered as one enterprise; and there are no contracts or documents of the Company or the Bank that are required to be filed as exhibits
to the Registration Statement or the Conversion Application that have not been so filed.
       (xxiv) The Conversion, the execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated herein, have been duly authorized by all necessary corporate action on the part of the Company and the Bank, do not and
will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Bank pursuant to any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or the Bank is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or the Bank is subject, except for such conflicts, breaches or defaults that would not, individually or in
the aggregate, have a Material Adverse Effect on the financial condition, results of operations, business affairs or prospects of the
Company and the Bank, considered as one enterprise; nor will such action result in any violation of the provisions of the respective
certificate of incorporation or charter or bylaws of the Company or the Bank, or any applicable law, administrative regulation or
administrative or court decree.
     (xxv) No labor dispute with the employees of the Company or the Bank exists or, to the knowledge of the Company or the Bank, is
imminent or threatened; and the Company and the Bank are not aware of any existing or threatened labor disturbance by the employees of
any of its principal suppliers or contractors that might be expected to
result in any Material Adverse Effect on the financial condition, results of operations, business affairs or prospects of the Company and
the Bank, considered as one enterprise.
      (xxvi) Each of the Company and the Bank has good and marketable title to all properties and assets for which ownership is material
to the business of the Company or the Bank and to those properties and assets described in the Prospectus as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except such as are described in the Prospectus or are not material in relation to
the business of the Company or the Bank, considered as one enterprise; and all of the leases and subleases material to the business of the
Company or the Bank under which the Company or the Bank hold properties, including those described in the Prospectus, are valid and
binding agreements of the Company or the Bank, enforceable in accordance with their terms, except as may be limited by bankruptcy,
insolvency or similar laws and availability of equitable remedies.
       (xxvii) Neither the Company nor the Bank is in violation of any order or directive from the OTS, the Commission or any regulatory
authority to make any material change in the method of conducting its respective businesses; the Company and the Bank have conducted
and are conducting their business so as to comply in all material respects with all applicable statutes, regulations and administrative and
court decrees (including, without limitation, all regulations, decisions, directives and orders of the OTS, the FDIC and the Commission).
Except as disclosed in the Prospectus, neither the Company nor the Bank is subject or is party to, or has received any notice or advice that
any of them may become subject or party to, any investigation with respect to any cease-and-desist order, agreement, consent agreement,
memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, or is a party to any commitment
letter or similar undertaking to, or is subject to any directive by, or has been a recipient of any supervisory letter from, or has adopted any
board resolutions at the request of, any Regulatory Agency (as defined below) that currently restricts in any material respect the conduct
of their business or that in any material manner relates to their capital adequacy, their credit policies, their management or their business
(each, a ―Regulatory Agreement‖), nor has the Company or the Bank been advised by any Regulatory Agency that it is considering
issuing or requesting any such Regulatory Agreement; and, except as disclosed in the Prospectus, there is no unresolved violation,
criticism or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of the Company or
the Bank that, in the reasonable judgment of the Company or the Bank, is expected to result in a Material Adverse Effect on the financial
condition, results of operations, business affairs or prospects of the Company and the Bank, considered as one enterprise, or that might
materially and adversely affect the properties or assets thereof or that might materially and adversely affect the consummation of the
Conversion or the performance of this Agreement. As used herein, the term ―Regulatory Agency‖ means any federal or state agency
charged with the supervision or regulation of depositary institutions or holding companies of depositary institutions, or engaged in the
insurance of depositary institution deposits, or any court, administrative agency or commission or other governmental agency, authority
or instrumentality having supervisory or regulatory authority with respect to the Company or the Bank.
      (xxviii) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Bank, threatened, against or affecting the Company or the Bank that is required to
be disclosed in the Registration Statement (other than as disclosed therein), or that might result in any Material Adverse Effect on the
financial condition, results of operations, business affairs or prospects of the Company and the Bank, considered as one enterprise, or that
might materially and adversely affect the properties or assets thereof, the performance of this Agreement or the consummation of the
Conversion; all pending legal or governmental proceedings to which the Company or the Bank is a party or of which any of their
respective property or assets is the subject that are not described in the Registration Statement, including ordinary routine litigation
incidental to the business, are considered in the aggregate not material; and there are no material contracts or documents of the Company
or the Bank that are required to be filed as exhibits to the Registration Statement or Conversion Application that have not been so filed.
      (xxix) The Company and the Bank have obtained (i) an opinion of its counsel, Luse Gorman Pomerenk & Schick, P.C., with respect
to the legality of the Securities to be issued, and the federal income tax consequences of the Conversion and (ii) the opinion of
McGladrey & Pullen, L.L.P. with respect to the state tax consequences of the Conversion, copies of which are filed as exhibits to the
Registration Statement; all material aspects of the aforesaid opinions are accurately summarized in the Prospectus; the facts and
representations upon which such opinions are based are truthful, accurate and complete in all material respects; and neither the Company
nor the Bank has taken or will take any action inconsistent therewith.
      (xxx) The Company is not and, upon completion of the Conversion and the Offerings and sale of the Common Stock and the
application of the net proceeds therefrom, will not be, required to be registered under the Investment Company Act of 1940, as amended.
      (xxxi) All of the loans represented as assets on the most recent financial statements or selected financial information of the Bank
included in the Prospectus meet or are exempt from all requirements of federal, state or local law pertaining to lending, including, without
limitation, truth in lending (including the requirements of Regulations Z and 12 C.F.R. Part 226 and Section 563.99), real estate
settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a Material Adverse Effect on the financial condition, results of operations, business
affairs or prospects of the Company and the Bank.
     (xxxii) To the knowledge of the Company and the Bank, with the exception of the intended loan to the Bank’s ESOP by the
Company or a subsidiary formed for that purpose to enable the ESOP to purchase securities in an amount up to 8% of the Company
Common Stock that will be outstanding following the Conversion, neither the Company nor the Bank or their employees has made any
payment of funds of the Company or the Bank as a loan for the purchase of the Common Stock or made any other payment of funds
prohibited by law, and no funds have been set aside to be used for any payment prohibited by law.
      (xxxiii) Each of the Company and the Bank maintains a system of internal accounting controls sufficient to provide reasonable
assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are
recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization;
and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
      (xxxiv) The Company and the Bank are in compliance in all material respects with the applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transaction Reporting Act of 1970, as amended, and the rules and regulations
thereunder. The Bank has established compliance programs and is in compliance in all material respects with the requirements of the
USA PATRIOT Act and all applicable regulations promulgated thereunder, and, except as disclosed in the Prospectus, there is no charge,
investigation, action, suit or proceeding before any court, regulatory authority or governmental agency or body pending or, to the best
knowledge of the Company and the Bank, threatened regarding the Bank’s compliance with the USA PATRIOT Act or any regulations
promulgated thereunder.
       (xxxv) Neither the Company nor the Bank nor any properties owned or operated by the Company or the Bank is in material
violation of or liable under any Environmental Law (as defined below). There are no actions, suits or proceedings, or demands, claims,
notices or investigations (including, without limitation, notices, demand letters or requests for information from any environmental
agency) instituted or pending, or to the knowledge of the Company or the Bank threatened, relating to the liability of any property owned
or operated by the Company or the Bank, under any Environmental Law, except for such actions, suits or proceedings, or demands,
claims, notices or investigations that, individually or in the aggregate, would not have a Material Adverse Effect on the financial
condition, results of operations or business affairs of the Company and the Bank, considered as one enterprise. For purposes of this
subsection, the term ―Environmental Law‖ means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating
to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use,
storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance
presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or
by quantity, including any material containing any such substance as a component.
     (xxxvi) The Company and the Bank have filed all federal, state and local income and franchise tax returns required to be filed and
have made timely payments of all taxes shown as due and payable in respect of such returns, and no deficiency has been asserted with
respect thereto by any taxing authority. The Company and the Bank have
     no knowledge of any tax deficiency that has been asserted or could be asserted against the Company or the Bank.
          (xxxvii) The Company and the Bank have received all approvals required to consummate the Conversion, and to have the Securities
     quoted on the Nasdaq Capital Market effective as of the Closing Time referred to in Section 2 hereof.
           (xxxviii) At or prior to the Closing, the Company will have registered the Securities under Section 12(b) of the Exchange Act.
          (xxxix) There are no affiliations or associations (as such terms are defined by the Financial Industry Regulatory Authority
     (―FINRA‖)) between any member of the FINRA and any of the Company’s or the Bank’s officers or directors.
           (xl) Each of the Company and the Bank carries, or is covered by, insurance in such amounts and covering such risks as is adequate
     for the conduct of their respective businesses and the value for their respective properties as is customary for companies engaged in
     similar industries.
           (xli) The Company and the Bank have not relied on the Agent or its counsel for any legal, tax or accounting advice in connection
     with the Conversion.
          (xlii) The records of eligible account holders, supplemental eligible account holders, and other depositors or borrower members are
     accurate and complete in all material respects.
            (xliii) The Company and the Bank are in compliance in all material respects with all presently applicable provisions of the
     Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder
     (―ERISA‖); no ―reportable event‖ (as defined in ERISA) has occurred with respect to any ―pension plan‖ (as defined in ERISA) for
     which the Company or the Bank, respectively, would have any liability; each of the Company and the Bank has not incurred and does not
     expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any ―pension plan‖ or
     (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations
     thereunder (the ―Code‖); and each ―pension plan‖ for which the Company and the Bank would have any liability that is intended to be
     qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by
     failure to act, that would cause the loss of such qualification.

     (b) Any certificate signed by any officer of the Company or the Bank and delivered to either of the Agent or counsel for the Agent shall
be deemed a representation and warranty by the Company or the Bank to the Agent as to the matters covered thereby.

      SECTION 2. A PPOINTMENT OF S ANDLER O’N EILL ; S ALE AND D ELIVERY OF THE S ECURITIES ; C LOSING . On the basis of the
representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby appoints Sandler
O’Neill as its exclusive Agent to consult with and advise the Company, and to assist the Company with the solicitation of subscriptions and
purchase orders for Securities, in connection
with the Company’s sale of Common Stock in the Offerings. On the basis of the representations and warranties herein contained, and subject to
the terms and conditions herein set forth, Sandler O’Neill accepts such appointment and agrees to use its best efforts to assist the Company with
the solicitation of subscriptions and purchase orders for Securities in accordance with this Agreement; provided, however , that the Agent shall
not be obligated to take any action that is inconsistent with any applicable laws, regulations, decisions or orders. The services to be rendered by
Sandler O’Neill pursuant to this appointment include the following: (i) consulting as to the securities marketing implications of any aspect of
the Plan or related corporate documents; (ii) reviewing with the Board of Directors financial and securities marketing implications of the
Appraiser’s appraisal of the Common Stock; (iii) reviewing all offering documents, including the Prospectus, stock order form and related
offering materials (it being understood that preparation and filing of such documents is the sole responsibility of the Company and the Bank
and their counsel); (iv) assisting in the design and implementation of a marketing strategy for the Offerings; (v) assisting Bank and Company
management in scheduling and preparing for meetings with potential investors and broker-dealers; and (vi) providing such other general advice
and assistance as may be requested to promote the successful completion of the Offerings.

      The appointment of the Agent hereunder shall terminate upon the earlier to occur of (a) forty-five (45) days after the last day of the
Subscription and Community Offering, unless the Company and the Agent agree in writing to extend such period and the OTS agrees to extend
the period of time in which the Securities may be sold, or (b) the receipt and acceptance of subscriptions and purchase orders for all of the
Securities, or (c) the completion of the Syndicated Community Offering.

      If any of the Securities remain available after the expiration of the Subscription and Community Offering, at the request of the Company
and the Bank, Sandler O’Neill will seek to form a syndicate of registered brokers or dealers (―Selected Dealers‖) to assist in the solicitation of
purchase orders of such Securities on a best efforts basis, subject to the terms and conditions set forth in a master selling agreement (the
―Selected Dealers’ Agreement‖), substantially in the form set forth in Exhibit D to this Agreement. Sandler O’Neill will endeavor to limit the
aggregate fees to be paid by the Company and the Bank under any such Selected Dealers’ Agreement to an amount competitive with gross
underwriting discounts charged at such time for underwritings of comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however , that the aggregate fees payable to Sandler O’Neill and Selected Dealers shall not exceed 6.5% of the
aggregate Actual Purchase Price of the Securities sold by such Selected Dealers. Sandler O’Neill will endeavor to distribute the Securities
among the Selected Dealers in a fashion that best meets the distribution objectives of the Company and the Bank and the requirements of the
Plan, which may result in limiting the allocation of stock to certain Selected Dealers. It is understood that in no event shall Sandler O’Neill be
obligated to act as a Selected Dealer or to take or purchase any Securities.

      In the event the Company is unable to sell at least the total minimum of the Securities, as set forth on the cover page of the Prospectus,
within the period herein provided, this Agreement shall terminate and the Company shall refund to any persons who have subscribed for any of
the Securities the full amount that it may have received from them, together with interest as provided in the Prospectus, and no party to this
Agreement shall have any obligation to the others hereunder, except for the obligations of the Company and the Bank as set forth in Sections 4,
6(a) and 7 hereof and the obligations of the Agent as provided in Sections 6(b) and 7 hereof.
Appropriate arrangements for placing the funds received from subscriptions for Securities or other offers to purchase Securities in special
interest-bearing accounts with the Bank until all Securities are sold and paid for were made prior to the commencement of the Subscription
Offering, with provision for refund to the purchasers as set forth above, or for delivery to the Company if all Securities are sold.

       If at least the total minimum of Securities, as set forth on the cover page of the Prospectus, are sold, the Company agrees to issue or have
issued the Securities sold and to release for delivery certificates for such Securities at the Closing Time against payment therefor by release of
funds from the special interest-bearing accounts referred to above. The closing shall be held at the offices of Luse Gorman Pomerenk & Schick,
P.C., at 10:00 a.m., Eastern Standard Time, or at such other place and time as shall be agreed upon by the parties hereto, on a business day to be
agreed upon by the parties hereto. The Company shall notify the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through Selected Dealers shall be made available to the Agent for
inspection at least 24 hours prior to the Closing Time at such office as the Agent shall designate. The hour and date upon which the Company
shall release for delivery all of the Securities, in accordance with the terms hereof, is herein called the ―Closing Time.‖

      The Company will pay any stock issue and transfer taxes that may be payable with respect to the sale of the Securities.

      In addition to the reimbursement of the expenses specified in Section 4 hereof, the Agent will receive the following compensation for its
services hereunder:

      (a) One and one-half percent (1.5%) of the aggregate purchase price of the Securities sold in the Subscription and Community Offering,
in each case only if the Conversion is consummated, excluding in each case shares (i) purchased by any employee stock ownership plan or
other tax-qualified plans (except individual retirement accounts) of the Company or the Bank established for the benefit of their respective
directors, officers and employees, and (ii) purchased by any director, officer or employee of the Company or the Bank or members of their
immediate families (which term shall mean parents, grandparents, spouse, siblings, children and grandchildren); provided, however, that the
aggregate fee payable to the Agent shall not be less than $150,000.

      (b) With respect to any Securities sold by a FINRA member firm (other than Sandler O’Neill) under the Selected Dealers’ Agreement in
the Syndicated Community Offering, (i) the compensation payable to Selected Dealers under any Selected Dealers’ Agreement; and (ii) a
management fee to Sandler O’Neill of 1.5% of the aggregate purchase price of the Securities sold in the Syndicated Community Offering. Any
fees payable to Sandler O’Neill for Securities sold under any such agreement shall be limited to an aggregate of 6.5% of the purchase price of
the Securities sold by Sandler O’Neill and other FINRA member firms under the Selected Dealers’ Agreement.

     If this Agreement is terminated by the Agent in accordance with the provisions of Section 9(a) hereof or the Conversion is terminated by
the Company, no fee shall be payable by the Company to Sandler O’Neill; provided, however, that the Company shall reimburse the Agent for
all of its reasonable out-of-pocket expenses up to $100,000 (or $125,000 if there is a Syndicated Community Offering) incurred prior to
termination, including the reasonable fees and disbursements of counsel for the Agent in accordance with the provisions of Section 4 hereof. In
addition, the Company shall be obligated to pay the fees and expenses as contemplated by the provisions of Section 4 hereof in the event of any
such termination.

     All fees payable to the Agent hereunder shall be payable in immediately available funds at Closing Time, or upon the termination of this
Agreement, as the case may be. In recognition of the long lead times involved in the conversion process, the Bank has made an advance
payment to the Agent in the aggregate amount of $25,000, which shall be credited against any fees or reimbursement of expenses payable
hereunder and any unearned portion thereof shall be refunded.

      In addition to the appointment described above, the Agent has been appointed as records management agent in connection with the
Offering, the terms of which are set forth in the letter agreement, dated February 10, 2010, between the Bank and the Agent (a copy of which is
attached hereto as Exhibit A) (the ―Records Agent Letter Agreement‖).

     SECTION 3. C OVENANTS OF THE C OMPANY AND THE B ANK . The Company and the Bank covenant with the Agent as follows:

      (a) The Company and the Bank will prepare and file such amendments or supplements to the Registration Statement, the Prospectus, the
Conversion Application and the Members’ Proxy Statement as may hereafter be required by the Commission Regulations or the OTS
Regulations or as may hereafter be requested by the Agent. Following completion of the Subscription and Community Offering, in the event of
a Syndicated Community Offering, the Company and the Bank will (i) promptly prepare and file with the Commission a post-effective
amendment to the Registration Statement relating to the results of the Subscription and Community Offering, any additional information with
respect to the proposed plan of distribution and any revised pricing information or (ii) if no such post-effective amendment is required, will file
with the Commission a prospectus or prospectus supplement containing information relating to the results of the Subscription and Community
Offering and pricing information pursuant to Rule 424 of the Securities Act Regulations, in either case in a form acceptable to the Agent. The
Company and the Bank will notify the Agent immediately, and confirm the notice in writing, (i) of the effectiveness of any post-effective
amendment of the Registration Statement, the filing of any supplement to the Prospectus and the filing of any amendment to the Conversion
Application, (ii) of the receipt of any comments from the OTS or the Commission with respect to the transactions contemplated by this
Agreement or the Plan, (iii) of any request by the Commission or the OTS for any amendment to the Registration Statement or the Conversion
Application or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the OTS of any order
suspending the Offerings or the use of the Prospectus or the initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose,
and (vi) of the receipt of any notice with respect to the suspension of any qualification of the Securities for offering or sale in any jurisdiction.
The Company and the Bank will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
      (b) The Company represents and agrees that, unless it obtains the prior consent of the Agent and the Agent represents and agrees that,
unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the offered Securities that would
constitute an ―issuer free writing prospectus,‖ as defined in Rule 433, or that would constitute a ―free writing prospectus,‖ as defined in
Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Agent is
hereinafter referred to as a ―Permitted Free Writing Prospectus.‖ The Company represents that it has and will comply with the requirements of
Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record
keeping. The Company need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant
to Clause (a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173.

      (c) The Company and the Bank will give the Agent notice of its intention to file or prepare any amendment to the Conversion Application
or Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised
prospectus that the Company proposes for use in connection with the Syndicated Community Offering of the Securities that differs from the
prospectus on file at the Commission at the time the Registration Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the Securities Act Regulations), will furnish the Agent with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for the Agent may object.

       (d) The Company and the Bank will deliver to the Agent as many signed copies and as many conformed copies of the Holding Company
Application, the Conversion Application and the Registration Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein) as the Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.

       (e) During the period when the Prospectus is required to be delivered, the Company and the Bank will comply, at their own expense, with
all requirements imposed upon them by the OTS, by the applicable OTS Regulations, as from time to time in force, and by the Nasdaq,
Securities Act, the Securities Act Regulations, the Exchange Act, and the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Regulation M under the Exchange Act, so far as necessary to permit the continuance of sales or dealing in shares
of Common Stock during such period in accordance with the provisions hereof and the Prospectus.

      (f) If any event or circumstance shall occur as a result of which it is necessary, in the reasonable opinion of counsel for the Agent, to
amend or supplement the Registration Statement or Prospectus in order to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company and the Bank will forthwith amend or supplement the Registration Statement or
Prospectus (in form and substance satisfactory to counsel for the Agent) so that, as so amended or supplemented, the Registration Statement or
Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading, and the Company and the Bank will
furnish to the Agent a reasonable number of copies of such amendment or supplement. For
the purpose of this subsection, the Company and the Bank will each furnish such information with respect to itself as the Agent may from time
to time reasonably request.

      (g) The Company and the Bank will take all necessary action, in cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and other jurisdictions as the OTS Regulations may require and as the
Agent and the Company have agreed; provided, however , that neither the Company nor the Bank shall be obligated to file any general consent
to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the
Securities have been so qualified, the Company and the Bank will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement.

      (h) The Company authorizes Sandler O’Neill and any Selected Dealer to act as agent of the Company in distributing the Prospectus to
persons entitled to receive subscription rights and other persons to be offered Securities having record addresses in the states or jurisdictions set
forth in the Blue Sky Survey (as hereinafter defined).

      (i) The Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of
the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the Securities Act Regulations)
covering a twelve month period beginning not later than the first day of the Company’s fiscal quarter next following the ―effective date‖ (as
defined in said Rule 158) of the Registration Statement.

      (j) During the period ending on the third anniversary of the expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as soon as practicable after the end of each such fiscal year an annual
report (including statements of financial condition and statements of income, stockholders’ equity and cash flows, certified by independent
public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement), summary financial information of the Company and the Bank for such
quarter in reasonable detail. In addition, such annual report and quarterly summary financial information shall be made public through the
issuance of appropriate press releases at the same time or prior to the time of the furnishing thereof to stockholders of the Company.

      (k) During the period ending on the third anniversary of the expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as publicly available, a copy of each report or other document
of the Company furnished generally to stockholders of the Company or furnished to or filed with the Commission under the Exchange Act or
any national securities exchange or system on which any class of securities of the Company is listed, and (ii) from time to time, such other
information concerning the Company as the Agent may reasonably request. For purposes of this paragraph, any document filed electronically
with the Commission shall be deemed furnished to the Agent.

     (l) The Company and the Bank will conduct the Conversion, in all material respects, in accordance with the Plan, the OTS Regulations,
the Commission Regulations and all other
applicable regulations, decisions and orders, including all applicable terms, requirements and conditions precedent to the Conversion imposed
upon the Company or the Bank by the OTS and the Commission.

     (m) The Company and the Bank will comply, at their own expense, with all requirements imposed by the Commission, the OTS, and
Nasdaq or pursuant to the applicable Commission Regulations, OTS Regulations, and Nasdaq regulations as from time to time in force.

      (n) The Company will promptly inform the Agent upon its receipt of service with respect to any material litigation or administrative
action instituted with respect to the Conversion or the Offerings.

      (o) Each of the Company and the Bank will use the net proceeds received by it from the sale of the Securities in the manner specified in
the Prospectus under ―Use of Proceeds.‖

      (p) The Company will report the use of proceeds from the Offerings on its first periodic report filed pursuant to Sections 13(a) and 15(d)
of the Exchange Act and on any subsequent periodic reports as may be required pursuant to Rule 463 of the Securities Act Regulations.

      (q) The Company will maintain the effectiveness of the Exchange Act Registration Statement for not less than three years and will
comply in all material respects with its filing obligations under the Exchange Act. For three years, the Company will use its best efforts to
effect and maintain the listing of the Common Stock on the Nasdaq Capital Market and, once listed on the Nasdaq Capital Market, the
Company will comply with all applicable corporate governance standards required by the Nasdaq Capital Market. The Company will file with
the Nasdaq Capital Market all documents and notices required by the Nasdaq Capital Market of companies that have issued securities that are
traded in the over-the-counter market and quotations for which are reported by the Nasdaq Capital Market.

     (r) The Company and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with the Financial Industry Regulatory Authority’s Conduct Rule 2790.

      (s) Other than in connection with any employee benefit plan or arrangement described in the Prospectus, the Company will not, without
the prior written consent of the Agent, sell or issue, contract to sell or otherwise dispose of, any shares of Common Stock other than the
Securities for a period of 180 days following the Closing Time.

      (t) During the period beginning on the date hereof and ending on the later of the third anniversary of the Closing Time or the date on
which the Agent receives full payment in satisfaction of any claim for indemnification or contribution to which it may be entitled pursuant to
Sections 6 or 7 hereof, respectively, made prior to the third anniversary of the Closing Time, neither the Company nor the Bank shall, without
the prior written consent of the Agent, take or permit to be taken any action that could result in the Company Common Stock or the Bank
Common Stock becoming subject to any security interest, mortgage, pledge, lien or encumbrance, with the exception of the intended loan to the
Bank’s ESOP by the Company or a
subsidiary thereof to enable the ESOP to purchase securities in an amount up to 8% of the Company Common Stock that will be outstanding
following the Conversion.

     (u) The Company and the Bank will comply with the conditions imposed by or agreed to with the OTS in connection with its approval of
the Holding Company Application and the Conversion Application.

     (v) During the period ending on the first anniversary of the Closing Time, the Bank will comply with all applicable law and regulation
necessary for the Bank to continue to be a ―qualified thrift lender‖ within the meaning of 12 U.S.C. Section 1467a(m).

     (w) The Company shall not deliver the Securities until the Company and the Bank have satisfied each condition set forth in Section 5
hereof, unless such condition is waived by the Agent.

      (x) The Bank will furnish to the Agent as early as practicable prior to the Closing Date, but no later than two (2) full business days prior
thereto, a copy of the latest available unaudited interim financial statements of the Bank, which have been read by McGladrey & Pullen, L.L.P.,
as stated in their letters to be furnished pursuant to subsections (e) and (f) of Section 5 hereof.

      (y) During the period in which the Prospectus is required to be delivered, each of the Company and the Bank will conduct its business in
compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all
decisions, directives and orders of the Commission, the OTS and the Nasdaq Capital Market.

      (z) The Bank will not amend the Plan in any manner that would affect the sale of the Securities or the terms of this Agreement without
the consent of the Agent.

     (aa) The Company and the Bank will not, prior to the Closing Time, incur any liability or obligation, direct or contingent, or enter into
any material transaction, other than in the ordinary course of business consistent with past practice, except as contemplated by the Prospectus.

      (bb) The Company and the Bank will use all reasonable efforts to comply with, or cause to be complied with, the conditions precedent to
the several obligations of the Agent specified in Section 5 hereof.

      (cc) The Company and the Bank will provide the Agent with any information necessary to carry out the allocation of the Securities in the
event of an oversubscription, and such information will be accurate and reliable in all material respects.

      (dd) The Company and the Bank will notify the Agent when funds have been received for the minimum number of Securities set forth in
the Prospectus.

      (ee) The Company and the Bank will (i) use their best efforts to complete the conditions precedent to the Offerings and the Conversion in
accordance with the Plan, the applicable OTS Regulations and all other applicable laws, regulations, decisions and orders, including all
material terms, conditions, requirements and provisions precedent to the Conversion and the Offerings imposed upon the Company or the Bank
by the Commission, the
OTS or any other regulatory authority or Blue Sky authority, and to comply with those which the regulatory authority permits to be completed
after the Conversion and the Offerings; and (ii) conduct the Conversion and the Offerings in the manner described in the Prospectus and in
accordance with the Plan, the OTS Regulations and all other applicable material laws, regulations, decisions and orders, including in
compliance with all terms, conditions, requirements and provisions precedent to the Conversion and the Offerings imposed upon the Company
and the Bank by the Commission, the OTS, the FDIC or any other regulatory or Blue Sky authority.

      (ff) The Bank will maintain appropriate arrangements for depositing all funds received from persons mailing or delivering subscriptions
for or orders to purchase Securities in the Offering with the Bank on an interest-bearing basis until the Closing Date and satisfaction of all
conditions precedent to the release of the Company’s or the Bank’s obligation to refund payments received from persons subscribing for or
ordering Shares in the Offering in accordance with the Plan and as described in the Prospectus or until refunds of such funds have been made to
the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The Bank
will maintain such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum
extent allowable) and to enable the Bank to make the appropriate refunds of such funds in the event that such refunds are required to be made
in accordance with the Plan and as described in the Prospectus.

      (gg) The Company will comply with the applicable provisions of the Sarbanes-Oxley Act, the rules and regulations of the Commission
thereunder, and the Nasdaq corporate governance rules applicable to it, and will use its best efforts to comply with those provisions of the
Sarbanes-Oxley Act and the Nasdaq corporate governance rules that will become effective in the future upon their effectiveness.

      SECTION 4. P AYMENT OF E XPENSES . The Company and the Bank jointly and severally agree to pay all expenses incident to the
performance of their obligations under this Agreement, including but not limited to (i) the cost of obtaining all securities and bank regulatory
approvals, (ii) the preparation, printing and filing of the Registration Statement and the Conversion Application as originally filed and of each
amendment thereto, (iii) the preparation, issuance and delivery of the certificates for the Securities purchased in the Offerings, (iv) the fees and
disbursements of the Company’s and the Bank’s counsel, conversion agent, accountants, appraiser and other advisors, (v) the qualification of
the Securities under the securities laws in accordance with the provisions of Section 3(g) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the preparation of the Blue Sky Survey, (vi) the printing and delivery
to the Agent of copies of the Registration Statement as originally filed and of each amendment thereto and the printing and delivery of the
Prospectus and any amendments or supplements thereto to the purchasers in the Offerings and the Agent, (vii) the printing and delivery to the
Agent of copies of a Blue Sky Survey, and (viii) the fees and expenses incurred in connection with the listing of the Securities on the Nasdaq
Capital Market. In the event the Agent incurs any such fees and expenses on behalf of the Company or the Bank, the Bank will reimburse the
Agent for such fees and expenses whether or not the Conversion is consummated; provided, however, that the Agent shall not incur any
substantial expenses on behalf of the Company or the Bank pursuant to this Section without the prior approval of the Bank.
      The Company and the Bank jointly and severally agree to pay certain expenses incident to the performance of the Agent’s obligations
under this Agreement, regardless of whether the Conversion is consummated, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the FINRA, and (ii) all reasonable out-of-pocket expenses up to $125,000 incurred by the Agent relating to the
Offerings, including without limitation, fees and expenses of the Agent’s counsel, advertising, promotional, syndication and travel expenses;
provided, however, that the Agent shall document such expenses to the reasonable satisfaction of the Company and the Bank. All fees and
expenses to which the Agent is entitled to reimbursement under this paragraph of this Section 4 shall be due and payable upon receipt by the
Company or the Bank of a written accounting therefor setting forth in reasonable detail the expenses incurred by the Agent.

      SECTION 5. C ONDITIONS OF A GENT ’ S O BLIGATIONS . The Company, the Bank and the Agent agree that the issuance and the sale
of Securities and all obligations of the Agent hereunder are subject to the accuracy of the representations and warranties of the Company and
the Bank herein contained as of the date hereof and the Closing Time, to the accuracy of the statements of officers and directors of the
Company and the Bank made pursuant to the provisions hereof, to the performance by the Company and the Bank of their obligations
hereunder, and to the following further conditions:

      (a) No stop order suspending the effectiveness of the Registration Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission, no order suspending the Offerings or authorization for final use of the
Prospectus shall have been issued or proceedings therefor initiated or threatened by the Commission or the OTS and no order suspending the
sale of the Securities in any jurisdiction shall have been issued.
     (b) At Closing Time, the Agent shall have received:
          (1) The favorable opinion, dated as of Closing Time, of Luse Gorman Pomerenk & Schick, P.C., counsel for the Company and the
     Bank, in form and substance satisfactory to counsel for the Agent as attached hereto as Exhibit B.
          (2) The favorable opinion, dated as of Closing Time, of Silver, Freedman & Taff, L.L.P., counsel for the Agent, as attached hereto
     as Exhibit C.
            (3) In addition to giving their opinions required by subsections (b)(l) and (b)(2), respectively, of this Section, Luse Gorman
     Pomerenk & Schick, P.C. and Silver, Freedman & Taff, L.L.P. shall each additionally state that nothing has come to their attention that
     would lead them to believe that the Registration Statement (except for financial statements and schedules and other financial or statistical
     data included therein, as to which counsel need make no statement), at the time it became effective, contained an untrue statement of a
     material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or
     that the Prospectus (except for financial statements and schedules and other financial or statistical data included therein, as to which
     counsel need make no statement), at the time the Registration Statement became effective or at Closing Time, or (if applicable) that the
     General Disclosure Package as of the Applicable Time, included or includes an untrue statement of a material fact or omitted or omits to
     state a material fact necessary in order to
     make the statements therein, in the light of the circumstances under which they were made, not misleading.

      (c) At Closing Time referred to in Section 2 hereof, the Company and the Bank shall have completed in all material respects the
conditions precedent to the Conversion in accordance with the Plan, the applicable OTS Regulations and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon the Company or
the Bank by the OTS, or any other regulatory authority other than those which the OTS permits to be completed after the Conversion.

       (d) At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the financial condition, results of operations, business affairs or
prospects of the Company and the Bank, considered as one enterprise, whether or not arising in the ordinary course of business consistent with
past practice, and the Agent shall have received a certificate of the President and/or Chief Executive Officer of the Company, and of the Bank
and the chief financial or chief accounting officer of the Company and of the Bank, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) there shall have been no material transaction entered into by the Company or the Bank from the
latest date as of which the financial condition of the Company or the Bank, as set forth in the Registration Statement and the Prospectus other
than transactions referred to or contemplated therein and transactions in the ordinary course of business consistent with past practice
(iii) neither the Company nor the Bank shall have received from the OTS any order or direction (oral or written) to make any material change
in the method of conducting its business with which it has not complied (which order or direction, if any, shall have been disclosed in writing
to the Agent) or which materially and adversely would affect the business, financial condition, results of operations or prospects of the
Company or the Bank, considered as one enterprise, (iv) the representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time, (v) each of the Company and the Bank have complied with all
agreements and satisfied all conditions on their part to be performed or satisfied at or prior to Closing Time, (vi) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the
Commission and (vii) no order suspending the Subscription and Community Offering or Syndicated Community Offering or the authorization
for final use of the Prospectus has been issued and no proceedings for that purpose have been initiated or threatened by the OTS and no person
has sought to obtain regulatory or judicial review of the action of the OTS in approving the Plan in accordance with the OTS Regulations nor
has any person sought to obtain regulatory or judicial review of the action of the OTS in approving the Conversion Application.

      (e) At the Closing Time, the Agent shall have received a certificate of the Chief Executive Officer and/or President of the Company and
the Bank and the Chief Financial Officer of the Company and the Bank, dated as of Closing Time, to the effect that (i) they have reviewed the
contents of the Registration Statement and the Prospectus; (ii) based on each of their knowledge, the Registration Statement and the Prospectus
do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in
light of the circumstances under which such statements were made, not misleading; and (iii) based on each of their knowledge, the financial
statements and other financial
information included in the Registration Statement and the Prospectus fairly present the financial condition and results of operations of the
Bank as of and for the dates and periods covered by the Registration Statement and the Prospectus.

       (f) As of the date hereof, the Agent shall have received from McGladrey & Pullen, L.L.P. a letter dated such date, in form and substance
satisfactory to the Agent, to the effect that: (i) they are independent public accountants with respect to the Company and the Bank within the
meaning of the Code of Ethics of the AICPA, the Securities Act and the Securities Act Regulations and the OTS Regulations, they are
registered with the PCAOB, and they are not in violation of the auditor independence requirements of the Sarbanes-Oxley Act; (ii) it is their
opinion that the financial statements and supporting schedules included in the Registration Statement and covered by their opinions therein
comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Act Regulations;
(iii) based upon limited procedures as agreed upon by the Agent and McGladrey & Pullen, L.L.P. set forth in detail in such letter, nothing has
come to their attention which causes them to believe that (A) the unaudited financial statements and supporting schedules of the Bank included
in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities
Act, the Securities Act Regulations and the OTS Regulations or are not presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial statements included in the Registration Statement and the
Prospectus, (B) the unaudited amounts of net interest income and net income set forth under ―Selected Financial and Other Data‖ in the
Prospectus do not agree with the amounts set forth in unaudited financial statements as of and for the dates and periods presented under such
captions or such amounts were not determined on a basis substantially consistent with that used in determining the corresponding amounts in
the audited financial statements included in the Registration Statement, (C) at a specified date not more than five (5) business days prior to the
date of this Agreement, there has been any increase in the long term or short term debt of the Bank or any decrease in total assets, the
allowance for loan losses, total deposits or net worth of the Bank, in each case as compared with the amounts shown in the December 31, 2009
statements of financial conditions included in the Registration Statement or, (D) during the period from March 31, 2010 to a specified date not
more than five (5) business days prior to the date of this Agreement, there were any decreases, as compared with the corresponding period in
the preceding fiscal year, in total interest income, net interest income, net interest income after provision for loan losses, income before income
tax expense or net income of the Bank, except in all instances for increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (iv) in addition to the examination referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages
and financial information that are included in the Registration Statement and Prospectus and that are specified by the Agent, and have found
such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the
Company and the Bank identified in such letter.

      (g) At Closing Time, the Agent shall have received from McGladrey & Pullen, L.L.P. a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall
be a date not more than five (5) days prior to Closing Time.
     (h) At Closing Time, the Securities shall have been approved for quotation on the Nasdaq Capital Market upon notice of issuance.

     (i) At Closing Time, the Agent shall have received a letter from the Appraiser, dated as of the Closing Time, confirming its appraisal.

     (j) At Closing Time, counsel for the Agent shall have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Agent and counsel for the Agent.

      (k) At any time prior to Closing Time, (i) there shall not have occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market the Securities or to enforce contracts, including subscriptions or
orders, for the sale of the Securities, and (ii) trading generally on either the American Stock Exchange, the New York Stock Exchange or the
Nasdaq Stock Market shall not have been suspended, and minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges or by order of the Commission or any other governmental
authority, and a banking moratorium shall not have been declared by either Federal, Maryland, New York or Texas authorities.

     (l) A memorandum relating to the necessity of obtaining or confirming exemptions, qualifications or the registration of the Securities
under applicable state securities law (the ―Blue Sky Survey‖) from Luse Gorman Pomerenk & Schick, P.C. relating to the Offering, including
Agent’s participation therein, shall have been furnished prior to the mailing of the Prospectus to the Company with a copy thereof addressed to
Agent or upon which Luse Gorman Pomerenk & Schick, P.C. shall state the Agent may rely.

     SECTION 6. I NDEMNIFICATION .

      (a) The Company and the Bank, jointly and severally, agree to indemnify and hold harmless the Agent, each person, if any, who controls
the Agent, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and its respective partners, directors,
officers, employees and agents as follows:
           (i) from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, related to or arising out of the
     Conversion and the Offerings or any action taken by the Agent where acting as agent of the Company or the Bank or otherwise as
     described in Section 2 hereof;
          (ii) from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, based upon or arising out of any
     untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the
     omission or alleged omission therefrom of a material fact
     required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged
     untrue statement of a material fact contained in the Members’ Proxy Statement or Prospectus (or any amendment or supplement thereto),
     or any Issuer-Represented Free Writing Prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to
     make the statements therein, in the light of the circumstances under which they were made, not misleading;
           (iii) from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate
     amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
     threatened, or of any claim whatsoever described in clauses (i) or (ii) above, if such settlement is effected with the written consent of the
     Company or the Bank, which consent shall not be unreasonably withheld; and
           (iv) from and against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and
     disbursements of counsel chosen by the Agent), reasonably incurred in investigating, preparing or defending against any litigation, or any
     investigation, proceeding or inquiry by any governmental agency or body, commenced or threatened, or any claim pending or threatened
     whatsoever described in clauses (i) or (ii) above, to the extent that any such expense is not paid under clause (i), (ii) or (iii) above;

provided, however , that the indemnification provided for in this paragraph (a) shall not apply to any loss, liability, claim, damage or expense
that (i) arises out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or
supplement thereto), or any Issuer-Represented Free Writing Prospectus, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading which was
made in reliance upon and in conformity with the Agent Information, or (ii) is primarily attributable to the gross negligence, willful misconduct
or bad faith of the Agent.

      (b) The Agent agrees to indemnify and hold harmless the Company and the Bank, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, of
a material fact made in the Prospectus (or any amendment or supplement thereto), or any Issuer-Represented Free Writing Prospectus, in
reliance upon and in conformity with the Agent Information.

      (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability that it may have otherwise than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action. In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to no more than one local counsel in each separate
jurisdiction in which any action or proceeding is commenced) separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.

      (d) The Company and the Bank also agree that the Agent shall not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company and its security holders or the Bank’s or the Company’s creditors relating to or arising out of the engagement of the
Agent pursuant to, or the performance by the Agent of the services contemplated by, this Agreement, except to the extent that any liability is
found in a final judgment by a court of competent jurisdiction to have resulted primarily from the Agent’s bad faith, willful misconduct or gross
negligence.

      (e) In addition to, and without limiting, the provisions of Section (6)(a)(iv) hereof, in the event that the Agent, any person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or any of its partners, directors,
officers, employees or agents is requested or required to appear as a witness or otherwise gives testimony in any action, proceeding,
investigation or inquiry brought by or on behalf of or against the Company, the Bank, the Agent or any of its respective affiliates or any
participant in the transactions contemplated hereby in which the Agent or such person or agent is not named as a defendant, the Company and
the Bank jointly and severally agree to reimburse the Agent and its partners, directors, officers, employees or agents for all reasonable and
necessary out-of-pocket expenses incurred by them in connection with preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent and its partners, directors, officers, employees or agents in an amount to be mutually agreed upon.

      SECTION 7. C ONTRIBUTION . In order to provide for just and equitable contribution in circumstances in which the indemnity
agreement provided for in Section 6 hereof is for any reason held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company, the Bank, and the Agent shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that the Agent is responsible for that portion represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate gross proceeds appearing thereon and the Company and the
Bank are jointly and severally responsible for the balance or (ii) if, but only if, the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the relative benefits to the Company and the Bank on the one hand and
the Agent on the other, as reflected in clause (i), but also the relative fault of the Company and the Bank on the one hand and the Agent on the
other, as well as any other relevant equitable considerations; provided, however , that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who controls the Agent within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Agent, and each director of the Company and the Bank,
each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Bank within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company and
the Bank. Notwithstanding anything to the contrary set forth herein, to the
extent permitted by applicable law, in no event shall the Agent be required to contribute an aggregate amount in excess of the aggregate
marketing fees to which the Agent is entitled and actually paid pursuant to this Agreement.

     SECTION 8. R EPRESENTATIONS , W ARRANTIES AND A GREEMENTS TO S URVIVE D ELIVERY . All representations, warranties and
agreements contained in this Agreement, or contained in certificates of officers of the Company or the Bank submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Agent or controlling person, or by or
on behalf of the Company, and shall survive delivery of the Securities.

     SECTION 9. T ERMINATION OF A GREEMENT

       (a) The Agent may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, any material
adverse change in the financial condition, results of operations, business affairs or prospects of the Company or the Bank, considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) if there has occurred any material adverse change in the financial
markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in
the judgment of the Agent, are so material and adverse as to make it impracticable to market the Securities or to enforce contracts, including
subscriptions or orders, for the sale of the Securities, (iii) if trading generally on the Nasdaq Capital Market, the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either Federal, Maryland or Texas authorities, (iv) if any condition specified in Section 5 hereof shall
not have been fulfilled when and as required to be fulfilled; (v) if there shall have been such material adverse change in the condition or
prospects of the Company or the Bank or the prospective market for the Company’s Securities as in the Agent’s good faith opinion would make
it inadvisable to proceed with the offering, sale or delivery of the Securities; (vi) if, in the Agent’s good faith opinion, the price for the
Securities established by the Appraiser is not reasonable or equitable under then prevailing market conditions, or (vii) if the Conversion is not
consummated on or prior to                   , 2011.

     (b) If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party
except as provided in Sections 2 and 4 hereof relating to the reimbursement of expenses and except that the provisions of Sections 6 and 7
hereof shall survive any termination of this Agreement.

     SECTION 10. N OTICES . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly
given if mailed or transmitted by any standard form of telecommunication. Notices to the Agent shall be directed to the Agent at 919 Third
Avenue, 6 th Floor, New York, New York 10048, attention of Catherine A. Lawton, Principal, with a copy to James S. Fleischer, P.C., Silver,
Freedman & Taff, L.L.P., 3299 K Street, N.W., Suite 100, Washington, D.C. 20007; notices to the Company and the Bank shall be directed to
any of them at 5224 W. Plano Parkway, Plano, Texas 75093, Attention: Jeffrey Weaver, President and Chief Executive Officer, with a copy to
Robert Pomerenk, Esquire and Steven
Lanter, Esquire at Luse Gorman Pomerenk & Schick, P.C., 5335 Wisconsin Avenue, NW, Suite 780, Washington, D.C. 20015.

       SECTION 11. P ARTIES . This Agreement shall inure to the benefit of and be binding upon the Agent, the Company and the Bank and
their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Agent, the Company and the Bank and their respective successors and the controlling persons and the partners,
officers and directors referred to in Sections 6 and 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein or therein contained. This Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the Agent, the Company and the Bank and their respective
successors, and said controlling persons, partners, officers and directors and their heirs, partners, legal representatives, and for the benefit of no
other person, firm or corporation.

      SECTION 12. E NTIRE A GREEMENT ; A MENDMENT . This Agreement represents the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and supersedes any and all other oral or written agreements heretofore made, except for the
Records Agent Letter Agreement, the terms of which shall expressly survive the execution of this Agreement. No waiver, amendment or other
modification of this Agreement shall be effective unless in writing and signed by the parties hereto.

      SECTION 13. G OVERNING L AW AND T IME . This Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said State without regard to the conflicts of laws provisions thereof.
Unless otherwise noted, specified times of day refer to Eastern time.

       SECTION 14. S EVERABILITY . Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad
as is enforceable.

      SECTION 15. H EADINGS . Sections headings are not to be considered part of this Agreement, are for convenience and reference only,
and are not to be deemed to be full or accurate descriptions of the contents of any paragraph or subparagraph.

      SECTION 16. W AIVER OF T RIAL BY J URY . Each of the Company, the Bank, and the Agent waives all right to trial by jury in any
action, proceeding, claim or counterclaim (whether based on contract, tort or otherwise) related to or arising out of this Agreement.

      SECTION 17. C OUNTERPARTS . This Agreement may be executed in separate counterparts, each of which so executed and delivered
shall be an original, but all of which together shall constitute but one and the same instrument.

      SECTION 18. N O T HIRD P ARTY B ENEFICIARIES . This agreement is made solely for the benefit of and will be binding upon the
parties hereto and their respective successors and the
directors, officers and controlling persons and the agents thereof to the extent stated hereunder, and no other person will have any right or
obligation hereunder.

                                                      [The next page is the signature page]
      If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent on the one hand, and the Company
and the Bank on the other in accordance with its terms.

                                                                                    Very truly yours,

                                                                                    SP BANCORP, INC.
                                                                                    (a Maryland corporation)

                                                                                    By:
                                                                                              Title:

                                                                                    SHAREPLUS FEDERAL BANK

                                                                                    By:
                                                                                              Title:

CONFIRMED AND ACCEPTED,
 as of the date first above written:

S ANDLER O’N EILL & P ARTNERS , L.P.

By: Sandler O’Neill & Partners Corp.,
      the sole general partner

By:
                        , Authorized Signatory
                                                                                                                                   Exhibit 2

                                                       PLAN OF CONVERSION
                                                                OF
                                                     SHAREPLUS FEDERAL BANK
                                        TABLE OF CONTENTS

1.    INTRODUCTION                                                                           1
2.    DEFINITIONS                                                                            1
3.    PROCEDURES FOR CONVERSION                                                              5
4.    HOLDING COMPANY APPLICATIONS AND APPROVALS                                             7
5.    SALE OF SUBSCRIPTION SHARES                                                            7
6.    PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES                                       8
7.    RETENTION OF OFFERING PROCEEDS BY THE HOLDING COMPANY                                  8
8.    SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)                       9
9.    SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)                                9
10.   SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)         10
11.   SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)                                10
12.   COMMUNITY OFFERING                                                                    11
13.   SYNDICATED COMMUNITY OFFERING                                                         11
14.   LIMITATION ON PURCHASES                                                               12
15.   PAYMENT FOR SUBSCRIPTION SHARES                                                       13
16.   MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS                          14
17.   UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT                       15
18.   RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES                                     16
19.   ESTABLISHMENT OF LIQUIDATION ACCOUNT                                                  16
20.   VOTING RIGHTS OF STOCKHOLDERS                                                         17
21.   RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION                                      17
22.   REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION   18
23.   TRANSFER OF DEPOSIT ACCOUNTS                                                          18
24.   REGISTRATION AND MARKETING                                                            18
25.   TAX RULINGS OR OPINIONS                                                               19
26.   STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS                                         19
27.   RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY                               19
28.   PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK                                          20
29.   CONSUMMATION OF CONVERSION AND EFFECTIVE DATE                                         20
30.   EXPENSES OF CONVERSION                                                                21
31.   AMENDMENT OR TERMINATION OF PLAN                                                      21
32.   CONDITIONS TO CONVERSION                                                              21
33.   INTERPRETATION                                                                        22

                                                 (i)
                                                        PLAN OF CONVERSION OF
                                                       SHAREPLUS FEDERAL BANK

1. INTRODUCTION
      This Plan of Conversion (this ―Plan‖) provides for the conversion of SharePlus Federal Bank, a federal mutual savings bank
headquartered in Plano, Texas (the ―Bank‖), into the capital stock form of organization. A new stock holding company (the ―Holding
Company‖) will be established as part of the Conversion and will issue Common Stock in the Conversion. The purpose of the Conversion is to
convert the Bank to the capital stock form of organization and to raise capital in the Offering. The Holding Company will offer its Common
Stock in the Offering upon the terms and conditions set forth herein. The subscription rights granted to Participants in the Subscription Offering
are set forth in Sections 8 through 11 hereof. All sales of Common Stock in the Community Offering or the Syndicated Community Offering
will be at the sole discretion of the Board of Directors of the Bank and the Holding Company. The Conversion will have no impact on
depositors, borrowers or customers of the Bank. After the Conversion, the Bank’s insured deposits will continue to be insured by the FDIC to
the fullest extent provided by applicable law.

      This Plan has been approved by the Board of Directors of the Bank. This Plan also must be approved by a majority of the total number of
votes entitled to be cast by Voting Members of the Bank at a Special Meeting of Members to be called for that purpose. The OTS must approve
this Plan before it is presented to Voting Members for their approval.

2. DEFINITIONS
     For the purposes of this Plan, the following terms have the following respective meanings:

     Account Holder – Any Person holding a Deposit Account in the Bank.

      Acting in Concert – The term Acting in Concert means (i) knowing participation in a joint activity or interdependent conscious parallel
action towards a common goal whether or not pursuant to an express agreement; or (ii) a combination or pooling of voting or other interests in
the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise. A person or company that acts in concert with another person or company (―other party‖) shall also be deemed to
be acting in concert with any person or company that is also acting in concert with that other party, except that any tax-qualified employee
stock benefit plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose
of determining whether stock held by the trustee and stock held by the plan will be aggregated.

      Affiliate – Any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with another Person.
      Appraised Value Range – The range of the estimated consolidated pro forma market value of the Holding Company, which shall also be
equal to the estimated pro forma market value of the total number of Subscription Shares to be issued in the Conversion, as determined by the
Independent Appraiser prior to the Subscription Offering and as it may be amended from time to time thereafter. The maximum and minimum
of the Appraised Value Range may vary as much as 15% above and 15% below, respectively, the midpoint of the Appraised Value Range. The
maximum of the Appraisal Value Range may be adjusted by up to 15% subsequent to the commencement of the Subscription Offering to
reflect changes in market or financial conditions or demand for the Common Stock.

      Associate – The term Associate when used to indicate a relationship with any person, means (i) any corporation or organization (other
than the Holding Company, the Bank or a majority-owned subsidiary of the Bank) if the person is a senior officer or partner or beneficially
owns, directly or indirectly, 10% or more of any class of equity securities of the corporation or organization, (ii) any trust or other estate, if the
person has a substantial beneficial interest in the trust or estate or is a trustee or fiduciary of the trust or estate except that for the purposes of
this Plan relating to subscriptions in the Offering and the sale of Subscription Shares following the Conversion, a person who has a substantial
beneficial interest in any Non-Tax-Qualified Employee Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan, or who is a
trustee or fiduciary of such plan, is not an associate of such plan, and except that, for purposes of aggregating total shares that may be held by
Officers and Directors, the term ―Associate‖ does not include any Tax-Qualified Employee Stock Benefit Plan, and (iii) any person who is
related by blood or marriage to such person and who lives in the same home as such person or who is a Director or Officer of the Bank or the
Holding Company, or any of their parents or subsidiaries.

      Bank – SharePlus Federal Bank, Plano, Texas, in its mutual or stock form as indicated by the context, and any successor thereto.

      Common Stock – The common stock, par value $0.01 per share, of the Holding Company.

      Community – The Texas counties of Dallas, Collin, Denton, Rockwall, Hunt, Kaufman, Ellis, Tarrant, Grayson and Fannin, the
California county of Orange and the Kentucky county of Jefferson.

     Community Offering – The offering for sale to certain members of the general public directly by the Holding Company of shares not
subscribed for in the Subscription Offering.

      Control – (including the terms ―controlling,‖ ―controlled by,‖ and ―under common control with‖) means the direct or indirect power to
direct or exercise a controlling influence over the management or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise as described in 12 C.F.R. Part 574.

      Conversion – The conversion of the Bank to stock form pursuant to this Plan, and all steps incident or necessary thereto, including the
Offering.

       Deposit Account – Any withdrawable account, including, without limitation, savings, time, demand, NOW accounts, money market,
certificate and passbook accounts.

                                                                           2
     Director – A member of the Board of Directors of the Bank or the Holding Company, as appropriate in the context.

     Eligible Account Holder – Any Person holding a Qualifying Deposit on the Eligibility Record Date for purposes of determining
subscription rights and establishing subaccount balances in the Liquidation Account.

     Eligibility Record Date – The date for determining Eligible Account Holders of the Bank, which is March 31, 2009.

     Employees – All Persons who are employed by the Bank or the Holding Company.

    Employee Plans – Any one or more Tax-Qualified Employee Stock Benefit Plans of the Bank or the Holding Company, including any
ESOP and 401(k) Plan.

     ESOP – The Bank’s Employee Stock Ownership Plan and related trust.

     FDIC – The Federal Deposit Insurance Corporation.

      Holding Company – The corporation formed for the purpose of acquiring all of the shares of capital stock of the Bank in connection
with the Conversion. Shares of Common Stock of the Holding Company will be issued in the Conversion to Participants and others in the
Offering.

      Independent Appraiser – The appraiser retained by the Holding Company and the Bank to prepare an appraisal of the pro forma market
value of the Subscription Shares.

    Liquidation Account – The interest in the Bank received by Eligible Account Holders and Supplemental Eligible Account Holders upon
completion of the Conversion in exchange for their interest in the Bank in mutual form immediately prior to the Conversion.

     Member – Any Person or entity that qualifies as a member of the Bank pursuant to its charter and bylaws.

     Offering – The offering and issuance, pursuant to this Plan, of Common Stock in a Subscription Offering, Community Offering or
Syndicated Community Offering, as the case may be.

      Offering Range – The range of the number of shares of Common Stock offered for sale in the Offering. The Offering Range shall be
equal to the Appraised Value Range divided by the Subscription Price.

     Officer – An executive officer of the Bank or the Holding Company, as appropriate in the context, which includes the Chief Executive
Officer, President, Senior Vice Presidents, Executive Vice Presidents in charge of principal business functions, Secretary and Controller and
any Person performing functions similar to those performed by the foregoing persons.

                                                                       3
      Order Form – Any form (together with any cover letter and acknowledgment) sent to any Participant or Person containing, among other
things, a description of the alternatives available to such Person under this Plan and by which any such Person may make elections regarding
subscriptions for Subscription Shares.

    Other Member – Any person holding a Deposit Account with a positive balance on the Voting Record Date who is not an Eligible
Account Holder or Supplemental Eligible Account Holder.

     OTS – The Office of Thrift Supervision, a division of the United States Department of Treasury.

     Participant – Any Eligible Account Holder, Employee Plan, Supplemental Eligible Account Holder, or Other Member.

     Person – An individual, a corporation, a partnership, an association, a joint-stock company, a limited liability company, a trust, an
unincorporated organization, or a government or political subdivision of a government.

     Plan – This Plan of Conversion of the Bank as it exists on the date hereof and as it may hereafter be amended in accordance with its
terms.

     Prospectus – The one or more documents used in offering the Subscription Shares.

      Qualifying Deposit – The aggregate balance of all Deposit Accounts in the Bank of (i) an Eligible Account Holder at the close of
business on the Eligibility Record Date, provided such aggregate balance is not less than $50, and (ii) a Supplemental Eligible Account Holder
at the close of business on the Supplemental Eligibility Record Date, provided such aggregate balance is not less than $50.

       Resident – Any Person who occupies a dwelling within the Community, has a present intent to remain within the Community for a
period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the Community together with
an indication that such presence within the Community is something other than merely transitory in nature. To the extent the person is a
corporation or other business entity, to be a resident, the principal place of business or headquarters of the corporation or business entity must
be in the Community. To the extent a person is a personal benefit plan, the circumstances of the beneficiary shall apply with respect to this
definition. In the case of all other benefit plans, circumstances of the trustee shall be examined for purposes of this definition. The Bank may
utilize deposit or loan records or such other evidence provided to it to make a determination as to whether a person is a resident. In all cases,
however, such a determination shall be in the sole discretion of the Bank. A Participant must be a ―Resident‖ for purposes of determining
whether such person ―resides‖ in the Community as such term is used in this Plan.

     SEC – The Securities and Exchange Commission.

      Special Meeting of Members – The special meeting of Voting Members and any adjournments thereof held to consider and vote upon
this Plan.

                                                                         4
     Subscription Offering – The offering of Subscription Shares to Participants.

      Subscription Price – The price per Subscription Share to be paid by Participants and others in the Offering. The Subscription Price will
be determined by the Board of Directors of the Holding Company and fixed prior to the commencement of the Subscription Offering.

     Subscription Shares – Shares of Common Stock offered for sale in the Offering.

      Supplemental Eligible Account Holder – Any Person, other than Directors and Officers of the Bank and the Holding Company and
their Associates, holding a Qualifying Deposit on the Supplemental Eligibility Record Date, who is not an Eligible Account Holder.

      Supplemental Eligibility Record Date – The date for determining Supplemental Eligible Account Holders, which shall be the last day
of the calendar quarter preceding OTS approval of the application for conversion.

     Syndicated Community Offering – The offering of Subscription Shares, at the sole discretion of the Holding Company, following the
Subscription and Community Offerings through a syndicate of broker-dealers.

      Tax-Qualified Employee Stock Benefit Plan – Any defined benefit plan or defined contribution plan, such as an employee stock
ownership plan, stock bonus plan, profit-sharing plan or other plan, which, with its related trust, meets the requirements to be ―qualified‖ under
Section 401 of the Internal Revenue Code of 1986, as amended. The Bank may make scheduled discretionary contributions to a tax-qualified
employee stock benefit plan, provided such contributions do not cause the Bank to fail to meet its regulatory capital requirements. A
―Non-Tax-Qualified Employee Stock Benefit Plan‖ is any defined benefit plan or defined contribution plan that is not so qualified.

     Voting Member – Any Person who at the close of business on the Voting Record Date is entitled to vote as a Member of the Bank
pursuant to its charter and bylaws.

     Voting Record Date – The date fixed by the Directors for determining eligibility to vote at the Special Meeting of Members.

3. PROCEDURES FOR CONVERSION
       A. After approval of this Plan by the Board of Directors of the Bank, this Plan together with all other requisite material shall be submitted
to the OTS for approval. Notice of the adoption of this Plan by the Board of Directors of the Bank and the submission of this Plan to the OTS
for approval will be published in a newspaper having general circulation in each community in which an office of the Bank is located, and
copies of this Plan will be made available at each office of the Bank for inspection by depositors. The Bank also will publish a notice of the
filing with the OTS of an application to convert in accordance with the provisions of this Plan and as required by applicable regulation.

                                                                         5
      B. Promptly following approval by the OTS, this Plan will be submitted to a vote of the Voting Members at the Special Meeting of
Members. The Bank will mail to all Voting Members, at their last known address appearing on the records of the Bank, a proxy statement in
either long or summary form describing this Plan, which will be submitted to a vote of Voting Members at the Special Meeting of Members.
The Holding Company also will mail to all Participants either a Prospectus and Order Form for the purchase of Subscription Shares or a letter
informing them of their right to receive a Prospectus and Order Form and a postage-prepaid card to request such materials, subject to other
provisions of this Plan. In addition, all Participants will receive, or be given the opportunity to request by either returning a postage-prepaid
card which will be distributed with the proxy statement or by letter addressed to the Bank’s Secretary, a copy of this Plan. Upon approval of
this Plan by a majority of the total number of votes entitled to be cast by Voting Members, the Holding Company and the Bank will take all
other necessary steps pursuant to applicable laws and regulations to consummate the Conversion and the Offering. The Conversion must be
completed within 24 months of the approval of this Plan by Voting Members, unless a longer time period is permitted by governing laws and
regulations.

       C. The Conversion will be effected as follows, or in any other manner that is consistent with the purposes of this Plan and applicable laws
and regulations: (1) the Bank will convert its charter to the federal stock savings bank charter, which authorizes the issuance of capital stock;
(2) the Holding Company will purchase all of the capital stock issued by the Bank in connection with its conversion from mutual to stock form,
for at least 50% of the net proceeds of the Offering; and (3) the Holding Company will issue the Common Stock in the Offering as provided in
this Plan. Each of the steps set forth below shall be deemed to occur in such order as is necessary to consummate the Conversion pursuant to
this Plan, the intent of the Board of Directors of the Holding Company and the Board of Directors of the Bank, and applicable federal and state
regulations and policy. Approval of this Plan by Voting Members also shall constitute approval of each of the transactions necessary to
implement this Plan.

       The Board of Directors of the Bank may determine for any reason at any time prior to the issuance of the Subscription Shares not to
utilize a holding company form of organization in the Conversion. If the Board of Directors determines not to complete the Conversion
utilizing a holding company form of organization, the stock of the Bank will be issued and sold in accordance with this Plan. In such case, the
Holding Company’s registration statement will be withdrawn from the SEC, the Bank will take steps necessary to complete the Conversion,
including filing any necessary documents with the OTS and will issue and sell the Subscription Shares in accordance with this Plan. In such
event, any subscriptions or orders received for Subscription Shares of the Holding Company shall be deemed to be subscriptions or orders for
common stock of the Bank, and the Bank shall take such steps as permitted or required by the OTS and the SEC.

     D. The Holding Company shall register the issuance of the Subscription Shares with the SEC and any appropriate state securities
authorities.

      E. Upon completion of the Conversion, the legal existence of the Bank shall not terminate but the stock Bank shall be a continuation of
the entity of the mutual Bank and all property of the mutual Bank, including its right, title and interest in and to all property of whatever kind
and nature, whether real, personal, or mixed, and things, and choses in action, and every right, privilege, interest and asset of every conceivable
value or benefit then existing or

                                                                         6
pertaining to it, or which would inure to it, immediately by operation of law and without the necessity of any conveyance or transfer and
without any further act or deed shall vest in the stock Bank. The stock Bank shall have, hold, and enjoy the same in its own right as fully and to
the same extent as the same was possessed, held and enjoyed by the mutual Bank. The stock Bank at the time and the taking effect of the
Conversion shall continue to have and succeed to all the rights, obligations and relations of the mutual Bank. All pending actions and other
judicial or administrative proceedings to which the Bank was a party shall not be discontinued by reason of the Conversion, but may be
prosecuted to final judgment or order in the same manner as if the Conversion had not been made and the stock Bank resulting from the
Conversion may continue the actions in its name notwithstanding the Conversion. Upon completion of the Conversion, each Person having a
Deposit Account at the Bank prior to the Conversion will continue to have a Deposit Account, without further payment therefor, in the same
amount and subject to the same terms and conditions (except for Liquidation Rights) as in effect prior to the Conversion. All of the Bank’s
insured Deposit Accounts will continue to be insured by the FDIC to the extent provided by applicable law.

      F. The home office and branch offices of the Bank shall be unaffected by the Conversion. The executive offices of the Holding Company
shall be located at the current offices of the Bank.

4. HOLDING COMPANY APPLICATIONS AND APPROVALS
      The Boards of Directors of the Holding Company and the Bank will take all necessary steps to convert the Bank to stock form, form the
Holding Company and complete the Offering. The Holding Company shall make timely applications to the OTS and filings with the SEC for
any requisite regulatory approvals to complete the Conversion.

5. SALE OF SUBSCRIPTION SHARES
      The Subscription Shares will be offered simultaneously in the Subscription Offering to the Participants in the respective priorities set
forth in this Plan. The Subscription Offering may begin as early as the mailing of the Proxy Statement for the Special Meeting of Members.
The Common Stock will not be insured by the FDIC or any government agency. The Bank will not extend credit to any Person to purchase
shares of Common Stock.

      Any shares of Common Stock for which subscriptions have not been received in the Subscription Offering may be issued in the
Community Offering. The Subscription Offering may begin prior to the Special Meeting of Members and, in that event, the Community
Offering also may begin prior to the Special Meeting of Members. The offer and sale of Common Stock prior to the Special Meeting of
Members, however, is subject to the approval of this Plan by Voting Members.

     If feasible, any shares of Common Stock remaining after the Subscription Offering, and the Community Offering should one be
conducted, will be sold in a Syndicated Community Offering or in any manner that will achieve the widest distribution of the Common Stock.
The Syndicated Community Offering may be conducted in addition to, or instead of, a Community

                                                                        7
Offering. The issuance of Common Stock in any Subscription Offering and any Community Offering will be consummated simultaneously on
the date the sale of Common Stock in the Syndicated Community Offering is consummated and only if the required minimum number of shares
of Common Stock has been issued.

6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES
      The total number of shares, or a range thereof, of Subscription Shares to be offered for sale in the Offering will be determined jointly by
the Boards of Directors of the Bank and the Holding Company immediately prior to the commencement of the Subscription and Community
Offerings, and will be based on the Appraised Value Range and the Subscription Price. The Offering Range will be equal to the Appraised
Value Range divided by the Subscription Price. The estimated pro forma consolidated market value of the Holding Company will be subject to
adjustment within the Appraised Value Range if necessitated by market or financial conditions, with the receipt of any required approvals of
the OTS, and the maximum of the Appraised Value Range may be increased by up to 15% subsequent to the commencement of the
Subscription Offering to reflect changes in market and financial conditions or demand for the shares. The number of Subscription Shares issued
in the Offering will be equal to the estimated pro forma consolidated market value of the Holding Company, as may be amended, divided by
the Subscription Price.

      In the event that the Subscription Price multiplied by the number of Subscription Shares to be issued in the Offering is below the
minimum of the Appraised Value Range, or materially above the maximum of the Appraised Value Range, a resolicitation of purchasers may
be required, provided that up to a 15% increase above the maximum of the Appraised Value Range will not be deemed material so as to require
a resolicitation. Any such resolicitation shall be effected in such manner and within such time as the Bank and the Holding Company shall
establish, if all required regulatory approvals are obtained.

      Notwithstanding the foregoing, Subscription Shares will not be issued unless, prior to the consummation of the Offering, the Independent
Appraiser confirms to the Bank, the Holding Company, and the OTS, that, to the best knowledge of the Independent Appraiser, nothing of a
material nature has occurred which, taking into account all relevant factors, would cause the Independent Appraiser to conclude that the
number of Subscription Shares issued in the Offering multiplied by the Subscription Price is incompatible with its estimate of the aggregate
consolidated pro forma market value of the Holding Company. If such confirmation is not received, the Holding Company may cancel the
Offering, extend the Offering and establish a new Subscription Price and/or Appraised Value Range, extend, reopen or hold a new Offering, or
take such other action as the OTS may permit.

     The Common Stock to be issued in the Offering shall be fully paid and non-assessable.

7. RETENTION OF OFFERING PROCEEDS BY THE HOLDING COMPANY
     The Holding Company may retain up to 50% of the net proceeds of the Offering. The Offering proceeds will provide additional capital to
the Holding Company and the Bank for future growth of the Bank’s assets, products and services in a highly competitive and regulated

                                                                        8
financial services environment and would facilitate the continued expansion through acquisitions of financial service organizations, continued
diversification into other related businesses and for other business and investment purposes, including the possible payment of dividends and
possible future repurchases of the Common Stock as permitted by applicable federal and state regulations and policy. Following the
Conversion, the Bank may distribute additional capital to the Holding Company from time to time, subject to the OTS regulations governing
capital distributions.

8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)
      A. Each Eligible Account Holder shall have nontransferable subscription rights to subscribe for in the Subscription Offering up to the
greater of $250,000 of Common Stock, 0.10% of the total number of shares of Common Stock issued in the Offering, or fifteen times the
product (rounded down to the next whole number) obtained by multiplying the number of Subscription Shares offered in the Offering by a
fraction of which the numerator is the amount of the Eligible Account Holder’s Qualifying Deposit and the denominator is the total amount of
Qualifying Deposits of all Eligible Account Holders, in each case on the Eligibility Record Date, subject to the provisions of Section 14.

       B. In the event that Eligible Account Holders exercise subscription rights for a number of Subscription Shares in excess of the total
number of such shares eligible for subscription, the Subscription Shares shall be allocated among the subscribing Eligible Account Holders so
as to permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation of
Subscription Shares equal to the lesser of 100 shares or the number of shares for which such Eligible Account Holder has subscribed. Any
remaining shares will be allocated among the subscribing Eligible Account Holders whose subscriptions remain unsatisfied in the proportion
that the amount of the Qualifying Deposit of each Eligible Account Holder whose subscription remains unsatisfied bears to the total amount of
the Qualifying Deposits of all Eligible Account Holders whose subscriptions remain unsatisfied. If the amount so allocated exceeds the amount
subscribed for by any one or more Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those
Eligible Account Holders whose subscriptions are still not fully satisfied on the same principle until all available shares have been allocated.

       C. Subscription rights as Eligible Account Holders received by Directors and Officers and their Associates that are based on increased
deposits made by such persons during the 12 months preceding the Eligibility Record Date shall be subordinated to the subscription rights of
all other Eligible Account Holders, except as permitted by the OTS.

9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)
      The Employee Plans of the Holding Company and the Bank shall have subscription rights to purchase in the aggregate up to 10% of the
Subscription Shares issued in the Offering, including any Subscription Shares to be issued as a result of an increase in the maximum of the
Offering Range after commencement of the Subscription Offering and prior to completion of the Offering. Consistent with applicable laws and
regulations and practices and policies, the

                                                                       9
Employee Plans may use funds contributed by the Holding Company or the Bank and/or borrowed from an independent financial institution to
exercise such subscription rights, and the Holding Company and the Bank may make scheduled discretionary contributions thereto, provided
that such contributions do not cause the Holding Company or the Bank to fail to meet any applicable regulatory capital requirements. The
Employee Plans shall not be deemed to be Associates or Affiliates of or Persons Acting in Concert with any Director or Officer of the Holding
Company or the Bank. Alternatively, if permitted by the OTS, the Employee Plans may purchase all or a portion of such shares in the open
market.

10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)
      A. Each Supplemental Eligible Account Holder shall have nontransferable subscription rights to subscribe for in the Subscription
Offering up to the greater of $250,000 of Common Stock, 0.10% of the total number of shares of Common Stock issued in the Offering, or
fifteen times the product (rounded down to the next whole number) obtained by multiplying the number of Subscription Shares offered in the
Offering by a fraction of which the numerator is the amount of the Supplemental Eligible Account Holder’s Qualifying Deposit and the
denominator is the total amount of Qualifying Deposits of all Supplemental Eligible Account Holders, in each case on the Supplemental
Eligibility Record Date, subject to the availability of sufficient shares after filling in full all subscription orders of the Eligible Account Holders
and Employee Plans and to the purchase limitations specified in Section 14.

      B. In the event that Supplemental Eligible Account Holders exercise subscription rights for a number of Subscription Shares in excess of
the total number of such shares eligible for subscription, the Subscription Shares shall be allocated among the subscribing Supplemental
Eligible Account Holders so as to permit each such subscribing Supplemental Eligible Account Holder, to the extent possible, to purchase a
number of shares sufficient to make his or her total allocation of Subscription Shares equal to the lesser of 100 shares or the number of shares
for which each such Supplemental Eligible Account Holder has subscribed. Any remaining shares will be allocated among the subscribing
Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of the Qualifying Deposit of
each such Supplemental Eligible Account Holder bears to the total amount of the Qualifying Deposits of all Supplemental Eligible Account
Holders whose subscriptions remain unsatisfied. If the amount so allocated exceeds the amount subscribed for by any one or more
Supplemental Eligible Account Holders, the excess shall be reallocated (one or more times as necessary) among those Supplemental Eligible
Account Holders whose subscriptions are still not fully satisfied on the same principle until all available shares have been allocated.

11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)
      A. Each Other Member shall have nontransferable subscription rights to subscribe for in the Subscription Offering up to the greater of
$250,000 of Common Stock or 0.10% of the total number of shares of Common Stock issued in the Offering, subject to the availability of
sufficient shares after filling in full all subscription orders of Eligible Account Holders, Employee Plans and Supplemental Eligible Account
Holders and to the purchase limitations specified in Section 14.

                                                                          10
      B. In the event that such Other Members subscribe for a number of Subscription Shares which, when added to the Subscription Shares
subscribed for by the Eligible Account Holders, Employee Plans and Supplemental Eligible Account Holders, is in excess of the total number
of Subscription Shares to be issued, the available shares will be allocated to Other Members so as to permit each such subscribing Other
Member, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation of Subscription Shares equal to the
lesser of 100 shares or the number of shares for which each such Other Member has subscribed. Any remaining shares will be allocated among
the subscribing Other Members whose subscriptions remain unsatisfied in the proportion that the amount of the subscription of each such Other
Member bears to the total amount of the subscriptions of all Other Members whose subscriptions remain unsatisfied.

12. COMMUNITY OFFERING
       Any shares of Common Stock for which subscriptions have not been received in the Subscription Offering may be offered for sale in the
Community Offering through a direct community marketing program that may use a broker, dealer, consultant or investment banking firm
experienced and expert in the sale of savings institutions securities. Such entities may be compensated on a fixed fee basis or on a commission
basis, or a combination thereof. In the event orders for Common Stock in the Community Offering exceed the number of shares available for
sale, shares may be allocated (to the extent shares remain available) first to cover orders of natural persons residing in the Community, next to
cover orders of other Persons residing in the Community, and thereafter to cover orders of other members of the general public, so that each
Person in such category of the Community Offering may receive the lesser of 100 shares or the number of shares they ordered. In connection
with the allocation, orders received for shares in the Community Offering will be filled up to a maximum of two percent (2%) of the shares sold
in the Offering, and thereafter any remaining shares will be allocated on an equal number of shares basis per order. The Holding Company shall
use its best efforts consistent with this Plan to distribute Common Stock sold in the Community Offering in such a manner as to promote the
widest distribution practicable of such stock. The Holding Company reserves the right to reject any or all orders in whole or in part, which are
received in the Community Offering. Any Person may purchase up to $250,000 of Common Stock in the Community Offering, subject to the
purchase limitations specified in Section 14.

13. SYNDICATED COMMUNITY OFFERING
      If feasible, any shares of Common Stock remaining unsold in the Subscription Offering or the Community Offering may be offered for
sale in a Syndicated Community, subject to such terms, conditions and procedures as may be determined by the Holding Company, in a manner
that will achieve the widest distribution of the Common Stock, subject to the right of the Holding Company to accept or reject in whole or in
part any subscriptions in the Syndicated Community Offering. In the Syndicated Community Offering, any Person may purchase up to
$250,000 of Common Stock, subject to the purchase limitations specified in Section 14. Orders received for shares in a Syndicated Community
Offering will first be filled up to a maximum of two percent (2%) of the shares sold in the Offering, and thereafter any remaining shares will be
allocated on an equal number of shares basis per order.

                                                                       11
      Provided that the Subscription Offering has begun, the Holding Company may begin the Syndicated Community Offering at any time,
provided that the completion of the offer and sale of the Common Stock will be conditioned upon the approval of this Plan by Voting
Members. If the Syndicated Community Offering does not begin pursuant to the provisions of the preceding sentence, such offering will begin
as soon as practicable following the date upon which the Subscription and Community Offerings terminate.

      If for any reason a Syndicated Community Offering of shares of Common Stock not sold in the Subscription and Community Offerings
cannot be effected, or in the event that any insignificant residue of shares of Common Stock is not sold in the Subscription and Community
Offerings or in any Syndicated Community Offering, if possible, the Holding Company will make other arrangements for the disposition of
unsubscribed shares aggregating at least the minimum of the Offering Range. Such other purchase arrangements will be subject to receipt of
any required approval of the OTS.

14. LIMITATION ON PURCHASES
     The following limitations shall apply to all purchases and issuances of shares of Subscription Shares:

      A. The maximum number of shares of Common Stock that may be subscribed for or purchased in all categories in the Offering (1) by any
group of Persons or Participants through a single Deposit Account is $250,000 of Common Stock, or (2) by any Person or Participant together
with any Associate or group of Persons Acting in Concert is $400,000 of Common Stock, except that the Employee Plans may subscribe for up
to 10% of the Common Stock issued in the Offering (including shares issued in the event of an increase in the maximum of the Offering Range
of 15%).

     B. The maximum number of shares of Common Stock that may be issued to or purchased in all categories of the Offering by Officers and
Directors and their Associates in the aggregate, shall not exceed 31% of the shares of Common Stock issued in the Offering.

      C. A minimum of 25 shares of Common Stock must be purchased by each Person purchasing shares in the Offering to the extent those
shares are available; provided, however , that in the event the minimum number of shares of Common Stock purchased times the price per
share exceeds $500, then such minimum purchase requirement shall be reduced to such number of shares which when multiplied by the price
per share shall not exceed $500, as determined by the Board.

      If the number of shares of Common Stock otherwise allocable pursuant to Sections 8 through 13, inclusive, to any Person or that Person’s
Associates would be in excess of the maximum number of shares permitted as set forth above, the number of shares of Common Stock
allocated to each such person shall be reduced to the lowest limitation applicable to that Person, and then the number of shares allocated to each
group consisting of a Person and that Person’s Associates shall be reduced so that the aggregate allocation to that Person and his or her
Associates complies with the above limits.

                                                                       12
       Depending upon market or financial conditions, the Board of Directors of the Holding Company, with the receipt of any required
approvals of the OTS and without further approval of Voting Members, may decrease or increase the purchase limitations in this Plan, provided
that the maximum purchase limitations may not be increased to a percentage in excess of 5.0% of the shares issued in the Offering except as
provided below. If the Holding Company increases the maximum purchase limitations, the Holding Company is only required to resolicit
Persons who subscribed for the maximum purchase amount in the Subscription Offering and may, in the sole discretion of the Holding
Company, resolicit certain other large subscribers. In the event that the maximum purchase limitation is increased to 5.0% of the shares issued
in the Offering, such limitation may be further increased to 9.99%, provided that orders for Common Stock exceeding 5.0% of the shares of
Common Stock issued in the Offering shall not exceed in the aggregate 10.0% of the total shares of Common Stock issued in the Offering.
Requests to purchase additional Subscription Shares in the event that the purchase limitation is so increased will be determined by the Board of
Directors of the Holding Company in its sole discretion.

      In the event of an increase in the total number of shares offered in the Subscription Offering due to an increase in the maximum of the
Offering Range of up to 15% (the ―Adjusted Maximum‖), the additional shares will be used to fill the Employee Plans orders and then will be
allocated in accordance with the priorities set forth in this Plan.

      For purposes of this Section 14, (i) Directors, Officers and employees of the Bank and the Holding Company shall not be deemed to be
Associates or a group affiliated with each other or otherwise Acting in Concert solely as a result of their being Directors, Officers and
employees of the Bank or the Holding Company, (ii) shares purchased by Tax-Qualified Employee Stock Benefit Plans shall not be attributable
to the individual trustees or beneficiaries of any such plan for purposes of determining compliance with the limitations set forth in paragraphs
A. and B. of this Section 14, and (iii) shares purchased by a Tax-Qualified Employee Stock Benefit Plan pursuant to instructions of an
individual in an account in such plan in which the individual has the right to direct the investment, including any plan of the Bank qualified
under Section 401(k) of the Internal Revenue Code of 1986, as amended, shall be aggregated and included in that individual’s purchases and
not attributed to the Tax-Qualified Employee Stock Benefit Plan.

     Each Person purchasing Common Stock in the Offering shall be deemed to confirm that such purchase does not conflict with the above
purchase limitations contained in this Plan.

15. PAYMENT FOR SUBSCRIPTION SHARES
      All payments for Common Stock subscribed for in the Subscription Offering and Community Offering must be delivered in full to the
Bank or Holding Company, together with a properly completed and executed Order Form, on or prior to the expiration date of the Offering;
provided, however , that if the Employee Plans subscribe for shares in the Subscription Offering, such plans will not be required to pay for the
shares at the time they subscribe but rather may pay for such shares of Common Stock subscribed for by such plans at the Subscription Price
upon consummation of the Offering. Subscription funds will be held in a segregated account at the Bank or, at the discretion of the Bank, at
another insured depository institution.

                                                                       13
       Payment for Common Stock subscribed for shall be made by personal check, money order or bank draft. Alternatively, subscribers in the
Subscription and Community Offerings may pay for the shares for which they have subscribed by authorizing the Bank on the Order Form to
make a withdrawal from the designated types of Deposit Accounts at the Bank in an amount equal to the aggregate Subscription Price of such
shares. Such authorized withdrawal shall be without penalty as to premature withdrawal. If the authorized withdrawal is from a certificate
account, and the remaining balance does not meet the applicable minimum balance requirement, the certificate shall be canceled at the time of
withdrawal, without penalty, and the remaining balance will earn interest at the passbook rate. Funds for which a withdrawal is authorized will
remain in the subscriber’s Deposit Account but may not be used by the subscriber during the Subscription and Community Offerings.
Thereafter, the withdrawal will be given effect only to the extent necessary to satisfy the subscription (to the extent it can be filled) at the
Subscription Price per share. Interest will continue to be earned on any amounts authorized for withdrawal until such withdrawal is given
effect. Interest on funds received in cash, check or money order will be paid by the Bank at not less than the passbook rate on payments for
Common Stock. Such interest will be paid from the date payment is processed by the Bank until consummation or termination of the Offering.
If for any reason the Offering is not consummated, all payments made by subscribers in the Subscription and Community Offerings will be
refunded to them with interest. In case of amounts authorized for withdrawal from Deposit Accounts, refunds will be made by canceling the
authorization for withdrawal. The Bank is prohibited by regulation from knowingly making any loans or granting any lines of credit for the
purchase of stock in the Offering, and therefore, will not do so.

16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS
      As soon as practicable after the Prospectus prepared by the Holding Company and the Bank has been declared effective by the SEC,
Order Forms will be distributed to the Eligible Account Holders, Employee Plans, Supplemental Eligible Account Holders and Other Members
at their last known addresses appearing on the records of the Bank for the purpose of subscribing for shares of Common Stock in the
Subscription Offering and will be made available for use by those Persons to whom a Prospectus is delivered.

     Each Order Form will be preceded or accompanied by a prospectus describing the Holding Company, the Bank, the Common Stock and
the Offering. Each Order Form will contain, among other things, the following:

      A. A specified date by which all Order Forms must be received by the Bank or the Holding Company, which date shall be not less than
20 days nor more than 45 days following the date on which the Order Forms and Prospectuses are first mailed to Participants, and which date
will constitute the termination of the Subscription Offering unless extended;

     B. The Subscription Price per share for shares of Common Stock to be sold in the Offering;

                                                                       14
     C. A description of the minimum and maximum number of Subscription Shares that may be subscribed for pursuant to the exercise of
subscription rights or otherwise purchased in the Subscription and Community Offering;

      D. Instructions as to how the recipient of the Order Form is to indicate thereon the number of Subscription Shares for which such person
elects to subscribe and the available alternative methods of payment therefor;

     E. An acknowledgment that the recipient of the Order Form has received a final copy of the prospectus prior to execution of the Order
Form;

      F. A statement to the effect that all subscription rights are nontransferable, will be void at the end of the Subscription Offering, and can
only be exercised by delivering to the Holding Company within the subscription period such properly completed and executed Order Form,
together with payment in the full amount of the aggregate purchase price as specified in the Order Form for the shares of Common Stock for
which the recipient elects to subscribe in the Subscription Offering (or by authorizing on the Order Form that the Bank withdraw said amount
from the subscriber’s Deposit Account at the Bank); and

      G. A statement to the effect that the executed Order Form, once received by the Holding Company, may not be modified or amended by
the subscriber without the consent of the Holding Company.

     Notwithstanding the above, the Holding Company reserves the right in its sole discretion to accept or reject orders received on
photocopied or facsimilied order forms.

17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT
      In the event Order Forms (a) are not delivered by the United States Postal Service, (b) are not received back by the Holding Company or
are received by the Holding Company after the expiration date specified thereon, (c) are defectively filled out or executed, (d) are not
accompanied by the full required payment for the shares of Common Stock subscribed for (including cases in which deposit accounts from
which withdrawals are authorized are insufficient to cover the amount of the required payment), or (e) are not mailed pursuant to a ―no mail‖
order placed in effect by the account holder, the subscription rights of the Participant to whom such rights have been granted will lapse as
though such Participant failed to return the completed Order Form within the time period specified thereon; provided, however , that the
Holding Company may, but will not be required to, waive any immaterial irregularity on any Order Form or require the submission of corrected
Order Forms or the remittance of full payment for subscribed shares by such date as the Holding Company may specify. The interpretation of
the Holding Company of terms and conditions of this Plan and of the Order Forms will be final, subject to the authority of the OTS.

                                                                        15
18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES
       The Holding Company will make reasonable efforts to comply with the securities laws of all States in the United States in which Persons
entitled to subscribe for shares of Common Stock pursuant to this Plan reside. However, no such Person will be issued subscription rights or be
permitted to purchase shares of Common Stock in the Subscription Offering if such Person resides in a foreign country; or in a State of the
United States with respect to which any of the following apply: (A) a small number of Persons otherwise eligible to subscribe for shares under
this Plan reside in such state; (B) the issuance of subscription rights or the offer or sale of shares of Common Stock to such Persons would
require the Holding Company under the securities laws of such state, to register as a broker, dealer, salesman or agent or to register or
otherwise qualify its securities for sale in such state; and (C) such registration or qualification would be impracticable for reasons of cost or
otherwise.

19. ESTABLISHMENT OF LIQUIDATION ACCOUNT
      The Bank shall establish at the time of the Conversion, a Liquidation Account in an amount equal to the Bank’s total equity as reflected in
the latest statement of financial condition contained in the final Prospectus used in the Offering. Following the Conversion, the Liquidation
Account will be maintained by the Bank for the benefit of the Eligible Account Holders and Supplemental Eligible Account Holders who
continue to maintain their Deposit Accounts at the Bank. Each Eligible Account Holder and Supplemental Eligible Account Holder shall, with
respect to his Deposit Account, hold a related inchoate interest in a portion of the Liquidation Account balance, in relation to his Deposit
Account balance at the Eligibility Record Date or Supplemental Eligibility Record Date, respectively, or to such balance as it may be
subsequently reduced, as hereinafter provided.

      In the unlikely event of a complete liquidation of the Bank (and only in such event), following all liquidation payments to creditors
(including those to Account Holders to the extent of their Deposit Accounts) each Eligible Account Holder and Supplemental Eligible Account
Holder shall be entitled to receive a liquidating distribution from the Liquidation Account, in the amount of the then adjusted subaccount
balance for his Deposit Account then held, before any liquidation distribution may be made to any holders of the Bank’s capital stock. No
merger, consolidation, purchase of bulk assets with assumption of Deposit Accounts and other liabilities, or similar transactions with an
FDIC-insured institution, in which the Bank is not the surviving institution, shall be deemed to be a complete liquidation for this purpose. In
such transactions, the Liquidation Account shall be assumed by the surviving institution.

      The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and Supplemental Eligible Account Holder
shall be determined by multiplying the opening balance in the Liquidation Account by a fraction, the numerator of which is the amount of the
Qualifying Deposits of such Account Holder and the denominator of which is the total amount of all Qualifying Deposits of all Eligible
Account Holders and Supplemental Account Holders. For Deposit Accounts in existence at both the Eligibility Record Date and the
Supplemental Eligibility Record Date, separate initial subaccount balances shall be determined on the basis of the Qualifying Deposits in such
Deposit Account on each such record date. Such initial subaccount balance shall not be increased, but shall be subject to downward adjustment
as described below.

                                                                       16
      If, at the close of business on any December 31 annual closing date, commencing on or after the effective date of the Conversion, the
deposit balance in the Deposit Account of an Eligible Account Holder or Supplemental Eligible Account Holder is less than the lesser of (i) the
balance in the Deposit Account at the close of business on any other annual closing date subsequent to the Eligibility Record Date or
Supplemental Eligibility Record Date, or (ii) the amount of the Qualifying Deposit in such Deposit Account as of the Eligibility Record Date or
Supplemental Eligibility Record Date, the subaccount balance for such Deposit Account shall be adjusted by reducing such subaccount balance
in an amount proportionate to the reduction in such deposit balance. In the event of such downward adjustment, the subaccount balance shall
not be subsequently increased, notwithstanding any subsequent increase in the deposit balance of the related Deposit Account. If any such
Deposit Account is closed, the related subaccount shall be reduced to zero.

      The creation and maintenance of the Liquidation Account shall not operate to restrict the use or application of any of the equity accounts
of the Bank, except that the Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would
cause its equity to be reduced below (i) the amount required for the Liquidation Account; or (ii) the regulatory capital requirements of the
Bank.

20. VOTING RIGHTS OF STOCKHOLDERS
      Following consummation of the Conversion, the holders of the voting capital stock of the Holding Company shall have the exclusive
voting rights with respect to the Holding Company.

21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION
      A. All shares of Common Stock purchased by Directors or Officers of the Holding Company or the Bank in the Offering shall be subject
to the restriction that, except as provided in this Section 21 or as may be approved by the OTS, no interest in such shares may be sold or
otherwise disposed of for value for a period of one year following the date of purchase in the Offering.

     B. The restriction on disposition of Subscription Shares set forth above in this Section 21 shall not apply to the following:
           (1)     Any exchange of such shares in connection with a merger or acquisition involving the Bank or the Holding Company, as the
                   case may be, which has been approved by the appropriate federal regulatory agency; and
           (2)     Any disposition of such shares following the death of the person to whom such shares were initially sold under the terms of
                   this Plan.

      C. With respect to all Subscription Shares subject to restrictions on resale or subsequent disposition, each of the following provisions
shall apply:
           (1)     Each certificate representing shares restricted by this section shall bear a legend prominently stamped on its face giving
                   notice of the restriction;

                                                                        17
     (2)   Instructions shall be issued to the stock transfer agent for the Holding Company not to recognize or effect any transfer of any
           certificate or record of ownership of any such shares in violation of the restriction on transfer; and
     (3)   Any shares of capital stock of the Holding Company issued with respect to a stock dividend, stock split, or otherwise with respect
           to ownership of outstanding Subscription Shares subject to the restriction on transfer hereunder shall be subject to the same
           restriction as is applicable to such Subscription Shares.

22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION
      For a period of three years following the Conversion, no Officer, Director or their Associates shall purchase, without the prior written
approval of the OTS, any outstanding shares of Common Stock except from a broker-dealer registered with the SEC. This provision shall not
apply to negotiated transactions involving more than 1% of the outstanding shares of Common Stock, the exercise of any options pursuant to a
stock option plan or purchases of Common Stock made by or held by any Tax-Qualified Employee Stock Benefit Plan or Non-Tax-Qualified
Employee Stock Benefit Plan of the Bank or the Holding Company (including the Employee Plans) which may be attributable to any Officer or
Director. As used herein, the term ―negotiated transaction‖ means a transaction in which the securities are offered and the terms and
arrangements relating to any sale are arrived at through direct communications between the seller or any person acting on its behalf and the
purchaser or his investment representative. The term ―investment representative‖ shall mean a professional investment advisor acting as agent
for the purchaser and independent of the seller and not acting on behalf of the seller in connection with the transaction.

23. TRANSFER OF DEPOSIT ACCOUNTS
      Each Person holding a Deposit Account at the Bank at the time of Conversion shall retain an identical Deposit Account at the Bank
following Conversion in the same amount and subject to the same terms and conditions (except as to voting and liquidation rights) applicable to
such Deposit Account in the Bank immediately prior to the completion of the Conversion.

24. REGISTRATION AND MARKETING
      Within the time period required by applicable laws and regulations, the Holding Company will register the securities issued in connection
with the Offering pursuant to the Securities Exchange Act of 1934 and will not deregister such securities for a period of at least three years
thereafter, except that the requirement that registration be maintained for three years may be fulfilled by any successor to the Holding
Company. In addition, the Holding Company will use its best efforts to encourage and assist a market maker to establish and maintain a market
for the Common Stock and to list those securities on a national or regional securities exchange or the Nasdaq Stock Market.

                                                                      18
25. TAX RULINGS OR OPINIONS
      Consummation of the Conversion is expressly conditioned upon prior receipt by the Bank of either a ruling or an opinion of counsel with
respect to federal tax laws, and either a ruling, an opinion of counsel, or a letter of advice from their tax advisor with respect to applicable state
tax laws, to the effect that consummation of the transactions contemplated by the Conversion and this Plan will not result in a taxable
reorganization under the provisions of the applicable codes or otherwise result in any adverse tax consequences to the Holding Company or the
Bank, or to the account holders receiving subscription rights before or after the Conversion, except in each case to the extent, if any, that
subscription rights are deemed to have value on the date such rights are issued.

26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS
      A. The Holding Company and the Bank are authorized to adopt Tax-Qualified Employee Stock Benefit Plans in connection with the
Offering, including without limitation, an ESOP. Existing as well as any newly created Tax-Qualified Employee Stock Benefit Plans may
purchase shares of Common Stock in the Offering, to the extent permitted by the terms of such benefit plans and this Plan.

      B. The Holding Company and the Bank are authorized to enter into employment and/or change in control agreements with their executive
officers.

     C. The Holding Company and the Bank are authorized to adopt stock option plans, restricted stock plans and other Non-Tax-Qualified
Employee Stock Benefit Plans no sooner than six months after the completion of the Conversion and Offering, provided that such stock plans
conform to any applicable requirements of federal regulations, and the Holding Company intends to implement such stock plans after the
completion of the Conversion and Offering, subject to any necessary stockholder approvals.

27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY
      A.   (1)           The charter of the Bank may contain a provision stipulating that no person, except the Holding Company, for a period
                         of five years following the closing date of the Offering, may directly or indirectly acquire or offer to acquire the
                         beneficial ownership of more than 10% of any class of equity security of the Bank, without the prior written approval
                         of the OTS. In addition, such charter may also provide that for a period of five years following the closing date of the
                         Conversion, shares beneficially owned in violation of the above-described charter provision shall not be entitled to
                         vote and shall not be voted by any person or counted as voting stock in connection with any matter submitted to
                         stockholders for a vote. In addition, special meetings of the stockholders relating to changes in control or amendment
                         of the charter may only be called by the Board of Directors, and shareholders shall not be permitted to cumulate their
                         votes for the election of Directors.

                                                                          19
            (2)    For a period of three years from the date of consummation of the Conversion, no person, other than the Holding Company,
                   may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of an equity
                   security of the Bank without the prior written consent of the OTS.

      B. The Articles of Incorporation of the Holding Company may contain a provision stipulating that in no event shall any record owner of
any outstanding shares of Common Stock who beneficially owns in excess of 10% of such outstanding shares be entitled or permitted to any
vote with respect to any shares held in excess of 10%. In addition, the Articles of Incorporation and Bylaws of the Holding Company may
contain provisions that prohibit cumulative voting for the election of directors and provide for staggered terms of the directors, limitations on
the calling of special meetings, a fair price provision for certain business combinations and certain notice requirements.

     C. For the purposes of this section:
            (1)    The term ―person‖ includes an individual, a firm, a corporation or other entity;
            (2)    The term ―offer‖ includes every offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or
                   invitation for tenders of, a security or interest in a security for value;
            (3)    The term ―acquire‖ includes every type of acquisition, whether effected by purchase, exchange, operation of law or
                   otherwise; and
            (4)    The term ―security‖ includes non-transferable subscription rights issued pursuant to a plan of conversion as well as a
                   ―security‖ as defined in 15 U.S.C. § 77b(a)1.

28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK
     A. The Holding Company shall comply with any applicable regulation in the repurchase of any shares of its capital stock following
consummation of the Conversion.

      B. The Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause its
regulatory capital to be reduced below (i) the amount required for the liquidation account, or (ii) the federal or state regulatory capital
requirements.

29. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE
      The Effective Date of the Conversion shall be the date of the closing of the sale of all shares of the Common Stock after all requisite
regulatory and depositor approvals have been obtained, all applicable waiting periods have expired, and sufficient subscriptions and orders for
Subscription Shares have been received. The Closing of the sale of all shares of Common Stock sold in the Offering shall occur simultaneously
on the effective date of the Closing.

                                                                         20
30. EXPENSES OF CONVERSION
     The Bank and the Holding Company may retain and pay for the services of legal, financial and other advisors to assist in connection with
any or all aspects of the Conversion, including the Offering, and such parties shall use their best efforts to assure that such expenses are
reasonable.

31. AMENDMENT OR TERMINATION OF PLAN
      If deemed necessary or desirable, this Plan may be substantively amended as a result of comments from the OTS or otherwise at any time
prior to solicitation of proxies from Voting Members to vote on this Plan by the Board of Directors of the Bank, and at any time thereafter by
the Board of Directors of the Bank with the concurrence of the OTS. Any amendment to this Plan made after approval by Voting Members
with the approval of the OTS shall not require further approval by Voting Members unless otherwise required by the OTS. The Board of
Directors of the Bank may terminate this Plan at any time prior to the Special Meeting of Members to vote on this Plan, and at any time
thereafter with the concurrence of the OTS.

      By adopting this Plan, Voting Members of the Bank authorize the Board of Directors of the Bank to amend or terminate this Plan under
the circumstances set forth in this Section 31.

32. CONDITIONS TO CONVERSION
     Consummation of the Conversion pursuant to this Plan is expressly conditioned upon the following:

     A. Prior receipt by the Bank of rulings of the United States Internal Revenue Service and the state taxing authorities, or opinions of
counsel or tax advisers as described in Section 25;

     B. The issuance of the Subscription Shares offered in the Offering; and

     C. The completion of the Conversion within the time period specified in Section 3.

                                                                       21
33. INTERPRETATION
     All interpretations of this Plan and application of its provisions to particular circumstances by a majority of the Board of Directors of the
Bank shall be final, subject to the authority of the OTS.

Dated: April 1, 2010

                                                                        22
                                                                                                                                        Exhibit 3.1

                                                     ARTICLES OF INCORPORATION

                                                             SP BANCORP, INC.

      The undersigned, Steven Lanter, whose address is 5335 Wisconsin Avenue, N.W., Suite 780, Washington, DC 20015, being at least
eighteen years of age, acting as incorporator, does hereby form a corporation under the general laws of the State of Maryland, having the
following Articles of Incorporation (the ―Articles‖):

     ARTICLE 1. Name. The name of the corporation is SP Bancorp, Inc. (herein the ―Corporation‖).

     ARTICLE 2. Principal Office. The address of the principal office of the Corporation in the State of Maryland is c/o CSC-Lawyers
Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202.

     ARTICLE 3. Purpose. The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations
may be organized under the general laws of the State of Maryland as now or hereafter in force.

     ARTICLE 4. Resident Agent. The name and address of the registered agent of the Corporation in the State of Maryland is
CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. Said resident agent is a Maryland
corporation.

     ARTICLE 5. Capital Stock
      A. Authorized Stock. The total number of shares of capital stock of all classes that the Corporation has authority to issue is one-hundred
fifty million (150,000,000) shares, consisting of:

           1. fifty million (50,000,000) shares of preferred stock, par value one cent ($0.01) per share (the ―Preferred Stock‖); and

           2. one-hundred million (100,000,000) shares of common stock, par value one cent ($0.01) per share (the ―Common Stock‖).

      The aggregate par value of all the authorized shares of capital stock is one million, five-hundred thousand dollars ($1,500,000). Except to
the extent required by governing law, rule or regulation, the shares of capital stock may be issued from time to time by the Board of Directors
without further approval of the stockholders of the Corporation. The Corporation shall have the authority to purchase its capital stock out of
funds lawfully available therefor, which funds shall include, without limitation, the Corporation’s unreserved and unrestricted capital surplus.
The Board of Directors, pursuant to a resolution approved by a majority of the Whole Board (rounded up to the nearest whole number), and
without action by the stockholders, may amend these Articles to increase or decrease the aggregate number of shares of stock or the number of
shares of stock of any class or series that the Corporation has authority to issue. For the purposes of these Articles, the term ―Whole Board‖
shall mean the total number of directors that the Corporation would have if there were no vacancies on the Board of Directors at the time any
such resolution is presented to the Board of Directors for adoption.
      B. Common Stock. Except as provided under the terms of any series of Preferred Stock and as limited by Section D of this Article 5, the
exclusive voting power shall be vested in the Common Stock. Except as otherwise provided in these Articles, each holder of the Common
Stock shall be entitled to one vote for each share of Common Stock standing in the holder’s name on the books of the Corporation. Subject to
any rights and preferences of any series of Preferred Stock, holders of Common Stock shall be entitled to such dividends as may be declared by
the Board of Directors out of funds lawfully available therefor. Upon the liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, holders of Common Stock shall be entitled to receive all the remaining assets of the Corporation
available for distribution to its stockholders ratably in proportion to the number of shares held by them, respectively, after: (i) payment or
provision for payment of the Corporation’s debts and liabilities; and (ii) distributions or provisions for distributions to holders of any class or
series of stock having a preference over the Common Stock in the liquidation, dissolution or winding up of the Corporation.

      C. Preferred Stock. The Board of Directors is hereby expressly authorized, subject to any limitations prescribed by law, to provide for
the issuance of the shares of Preferred Stock in series, to establish from time to time the number of shares to be included in each such series,
and to fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of the shares of each such series. The number of authorized shares of the Preferred Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common
Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required by law or
pursuant to the terms of such Preferred Stock.

     D. Restrictions on Voting Rights of the Corporation’s Equity Securities.
            1. Notwithstanding any other provision of these Articles, in no event shall the record owner (or if more than one record owner, all
such record owners taken as a group) of any outstanding Common Stock that is beneficially owned, directly or indirectly, by a Person who, as
of any record date for the determination of stockholders entitled to vote on any matter, beneficially owns in excess of 10% of the
then-outstanding shares of Common Stock (the ―Limit‖), be entitled, or permitted to any vote in respect of the shares held in excess of the
Limit. The number of votes that may be cast by any particular record owner by virtue of the provisions hereof in respect of Common Stock
beneficially owned by such Person owning shares in excess of the Limit (a ―Holder in Excess‖) shall be a number equal to the total number of
votes that a single record owner of all Common Stock owned by such Holder in Excess would be entitled to cast after giving effect to the
provisions hereof, multiplied by a fraction, the numerator of which is the number of shares of such class or series that are both (i) beneficially
owned by such Holder in Excess and (ii) owned of record by such particular record owner and the denominator of which is the total number of
shares of Common Stock beneficially owned by such Holder in Excess. The provisions of this Section D of this Article 5 shall not be
applicable if, before the Holder in Excess acquired beneficial ownership of such shares in excess of the Limit, such acquisition was

                                                                         2
approved by a majority of the ―Unaffiliated Directors.‖ For this purpose, the term ―Unaffiliated Director‖ means any member of the Board of
Directors who is unaffiliated with the Holder in Excess and was a member of the Board of Directors prior to the time that the Holder in Excess
became such, and any director who is thereafter chosen to fill any vacancy on the Board of Directors and who is elected and who, in either
event, is unaffiliated with the Holder in Excess and in connection with his or her initial assumption of office is recommended for appointment
or election by a majority of the Unaffiliated Directors then serving on the Board of Directors.

           2. The following definitions shall apply to this Section D of this Article 5.
           (a)     An ―affiliate‖ of a specified Person shall mean a Person that directly, or indirectly through one or more intermediaries,
                   controls, or is controlled by, or is under common control with, the Person specified.
           (b)     ―Beneficial ownership‖ shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the
                   Securities Exchange Act of 1934 (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and
                   there shall be no successor rule or statutory provision thereto, pursuant to said Rule 13d-3 as in effect on March 31, 2010;
                   provided, however, that a Person shall, in any event, also be deemed the ―beneficial owner‖ of any Common Stock:
                  (1)   that such Person or any of its affiliates beneficially owns, directly or indirectly; or
                  (2)   that such Person or any of its affiliates has (i) the right to acquire (whether such right is exercisable immediately or
                        only after the passage of time), pursuant to any agreement, arrangement or understanding (but shall not be deemed to
                        be the beneficial owner of any voting shares solely by reason of an agreement, contract, or other arrangement with the
                        Corporation to effect any transaction of the type described in clause (i) or (ii) of the first sentence of Article 9 hereof)
                        or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared
                        voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship
                        or otherwise (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of a revocable
                        proxy granted for a particular meeting of stockholders, pursuant to a public solicitation of proxies for such meeting,
                        with respect to shares of which neither such Person nor any such affiliate is otherwise deemed the beneficial owner);
                        or
                  (3)   that are beneficially owned, directly or indirectly, by any other Person with which such first mentioned Person or any
                        of its affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement,
                        arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock

                                                                         3
                         of the Corporation; and provided further, however, that (i) no director or officer of the Corporation (or any affiliate of
                         any such director or officer) shall, solely by reason of any or all of such directors or officers acting in their capacities
                         as such, be deemed, for any purposes hereof, to beneficially own any Common Stock beneficially owned by any other
                         such director or officer (or any affiliate thereof), and (ii) neither any employee stock ownership or similar plan of the
                         Corporation or any subsidiary of the Corporation nor any trustee with respect thereto (or any affiliate of such trustee)
                         shall, solely by reason of such capacity of such trustee, be deemed, for any purposes hereof, to beneficially own any
                         Common Stock held under any such plan. For purposes of computing the percentage of beneficial ownership of
                         Common Stock of a Person, the outstanding Common Stock shall include shares deemed owned by such Person
                         through application of this subsection but shall not include any other shares of Common Stock that may be issuable by
                         the Corporation pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise.
                         For all other purposes, the outstanding Common Stock shall include only Common Stock then outstanding and shall
                         not include any Common Stock that may be issuable by the Corporation pursuant to any agreement, or upon the
                         exercise of conversion rights, warrants or options, or otherwise.
            (c)    A ―Person‖ shall mean any individual, firm, corporation, or other entity.
            (d)    The Board of Directors shall have the power to construe and apply the provisions of this Section D and to make all
                   determinations necessary or desirable to implement such provisions including, but not limited to, matters with respect to
                   (i) the number of shares of Common Stock beneficially owned by any Person, (ii) whether a Person is an affiliate of another,
                   (iii) whether a Person has an agreement, arrangement, or understanding with another as to the matters referred to in the
                   definition of beneficial ownership, (iv) the application of any other definition or operative provision of this Section D to the
                   given facts, or (v) any other matter relating to the applicability or effect of this Section D.

             3. The Board of Directors shall have the right to demand that any Person reasonably believed by the Board of Directors to be a
Holder in Excess (or holder of record of Common Stock beneficially owned by any Holder in Excess) supply the Corporation with complete
information as to (i) the record owner(s) of all shares beneficially owned by such Holder in Excess, and (ii) any other factual matter relating to
the applicability or effect of this section as may reasonably be requested of such Holder in Excess. The Board of Directors shall further have
the right to receive from any Holder in Excess reimbursement for all expenses incurred by the Board in connection with its investigation of any
matters relating to the applicability or effect of this section on such Holder in Excess, to the extent such investigation is deemed appropriate by
the Board of Directors as a result of the Holder in Excess refusing to supply the Corporation with the information described in the previous
sentence.

                                                                         4
            4. Any constructions, applications, or determinations made by the Board of Directors pursuant to this Section D in good faith and on
the basis of such information and assistance as was then reasonably available for such purpose, shall be conclusive and binding upon the
Corporation and its stockholders.

            5. In the event any provision (or portion thereof) of this Section D shall be found to be invalid, prohibited or unenforceable for any
reason, the remaining provisions (or portions thereof) of this Section D shall remain in full force and effect, and shall be construed as if such
invalid, prohibited or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of the
Corporation and its stockholders that each such remaining provision (or portion thereof) of this Section D remain, to the fullest extent permitted
by law, applicable and enforceable as to all stockholders, including Holders in Excess, notwithstanding any such finding.

      E. Majority Vote. Pursuant to Section 2-104(b)(5) of the Maryland General Corporation Law (―MGCL‖), notwithstanding any provision
of the MGCL requiring stockholder authorization of an action by a greater proportion than a majority of the total number of shares of all classes
of capital stock or of the total number of shares of any class of capital stock, such action shall be valid and effective if authorized by the
affirmative vote of the holders of a majority of the total number of shares of all classes outstanding and entitled to vote thereon, except as
otherwise provided in these Articles.

      F. Quorum . Except as otherwise provided by law or expressly provided in these Articles, the presence, in person or by proxy, of the
holders of record of shares of capital stock of the Corporation entitling the holders thereof to cast a majority of the votes (after giving effect, if
required, to the provisions of Article 5, Section D) entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote
shall constitute a quorum at all meetings of the stockholders, and every reference in these Articles to a majority or other proportion of capital
stock (or the holders thereof) for purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall
be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital
stock.

      ARTICLE 6. Preemptive Rights and Appraisal Rights.
      A. Preemptive Rights. Except for preemptive rights approved by the Board of Directors pursuant to a resolution approved by a majority
of the directors then in office, no holder of the capital stock of the Corporation or series of stock or of options, warrants or other rights to
purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe
for any unissued capital stock of any class or series, or any unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for capital stock of any class or series or carrying any right to purchase stock of any class or series.

                                                                          5
      B. Appraisal Rights. Holders of shares of stock shall not be entitled to exercise any rights of an objecting stockholder provided for under
Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board of Directors, pursuant to a resolution approved by a majority of the
directors then in office, shall determine that such rights apply with respect to all or any classes or series of stock, to one or more transactions
occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such
rights.

      ARTICLE 7. Directors. The following provisions are made a part of these Articles for the management of the business and the conduct
of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and
stockholders:

      A. Management of the Corporation. The business and affairs of the Corporation shall be managed under the direction of the Board of
Directors. All powers of the Corporation may be exercised by or under the authority of the Board of Directors, except as conferred on or as
reserved to the stockholders by law or by these Articles or the Bylaws of the Corporation; provided, however, that any limitations on the Board
of Director’s management or direction of the affairs of the Corporation shall reserve the directors’ full power to discharge their fiduciary duties.

      B. Number, Class and Terms of Directors; No Cumulative Voting. The number of directors constituting the Board of Directors of the
Corporation shall initially be nine (9), which number may be increased or decreased in the manner provided in the Bylaws of the Corporation;
provided, however, that such number shall never be less than the minimum number of directors required by the MGCL now or hereafter in
force. The directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided into three classes,
with the term of office of the first class (―Class I‖) to expire at the conclusion of the first annual meeting of stockholders, the term of office of
the second class (―Class II‖) to expire at the conclusion of the annual meeting of stockholders one year thereafter and the term of office of the
third class (―Class III‖) to expire at the conclusion of the annual meeting of stockholders two years thereafter, with each director to hold office
until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their
election or for such shorter period of time as the Board of Directors may determine, with each director to hold office until his or her successor
shall have been duly elected and qualified.

                                                                          6
     The names of the individuals who will serve as directors of the Corporation until their successors are elected and qualify are as follows:

                       Class I Directors:                                                     Term to Expire in
                       Carl Forsythe                                                               2011
                       David Stephens                                                              2011
                       Jeffrey Weaver                                                              2011

                       Class II Directors:                                                    Term to Expire in
                       Richard Holland                                                             2012
                       P. Stan Keith                                                               2012
                       Jeff Williams                                                               2012

                       Class III Directors:                                                   Term to Expire in
                       Christopher Cozby                                                           2013
                       David Rader                                                                 2013
                       Paul Zmigrosky                                                              2013

     Stockholders shall not be permitted to cumulate their votes in the election of directors.

     C. Vacancies. Any vacancies in the Board of Directors may be filled in the manner provided in the Bylaws of the Corporation.

      D. Removal. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of a majority of the
voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (after
giving effect to the provisions of Article 5 hereof) voting together as a single class.

      E. Stockholder Proposals and Nominations of Directors. Advance notice of stockholder nominations for the election of directors and
of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in
the Bylaws of the Corporation. Stockholder proposals to be presented in connection with a special meeting of stockholders shall be presented
by the Corporation only to the extent required by Section 2-502 of the MGCL and the Bylaws of the Corporation.

      ARTICLE 8. Bylaws. The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any
adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of a majority of the
Whole Board. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Corporation. In addition to any vote of the
holders of any class or series of stock of the Corporation required by law or by these Articles, the affirmative vote of the holders of at least 80%
of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of
directors (after giving effect to the provisions of Article 5 hereof), voting together as a single class, shall be required for the adoption,
amendment or repeal of any provisions of the Bylaws of the Corporation by the stockholders.

                                                                          7
       ARTICLE 9. Evaluation of Certain Offers. The Board of Directors, when evaluating (i) any offer of another Person (as defined below)
to (A) make a tender or exchange offer for any equity security of the Corporation, (B) merge or consolidate the Corporation with another
corporation or entity, or (C) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation or (ii) any other
actual or proposed transaction that would or may involve a change in control of the Corporation (whether by purchases of shares of stock or
any other securities of the Corporation in the open market or otherwise, tender offer, merger, consolidation, share exchange, dissolution,
liquidation, sale of all or substantially all of the assets of the Corporation, proxy solicitation or otherwise), may, in connection with the exercise
of its business judgment in determining what is in the best interests of the Corporation and its stockholders and in making any recommendation
to the Corporation’s stockholders, give due consideration to all relevant factors, including, but not limited to: (A) the economic effect, both
immediate and long-term, upon the Corporation’s stockholders, including stockholders, if any, who do not participate in the transaction; (B) the
social and economic effect on the present and future employees, creditors and customers of, and others dealing with, the Corporation and its
subsidiaries and on the communities in which the Corporation and its subsidiaries operate or are located; (C) whether the proposal is acceptable
based on the historical, current or projected future operating results or financial condition of the Corporation; (D) whether a more favorable
price could be obtained for the Corporation’s stock or other securities in the future; (E) the reputation and business practices of the other entity
to be involved in the transaction and its management and affiliates as they would affect the employees of the Corporation and its subsidiaries;
(F) the future value of the stock or any other securities of the Corporation or the other entity to be involved in the proposed transaction; (G) any
antitrust or other legal and regulatory issues that are raised by the proposal; (H) the business and historical, current or expected future financial
condition or operating results of the other entity to be involved in the transaction, including, but not limited to, debt service and other existing
financial obligations, financial obligations to be incurred in connection with the proposed transaction, and other likely financial obligations of
the other entity to be involved in the proposed transaction; and (I) the ability of the Corporation to fulfill its objectives as a financial institution
holding company and on the ability of its subsidiary financial institution(s) to fulfill the objectives of a federally insured financial institution
under applicable statutes and regulations. If the Board of Directors determines that any proposed transaction of the type described in clause
(i) or (ii) of the immediately preceding sentence should be rejected, it may take any lawful action to defeat such transaction, including, but not
limited to, any or all of the following: advising stockholders not to accept the proposal; instituting litigation against the party making the
proposal; filing complaints with governmental and regulatory authorities; acquiring the stock or any of the securities of the Corporation; selling
or otherwise issuing authorized but unissued stock or other securities or granting options or rights with respect thereto; and obtaining a more
favorable offer from another individual or entity. This Article 9 does not create any implication concerning factors that may be considered by
the Board of Directors regarding any proposed transaction of the type described in clause (i) or (ii) of the first sentence of this Article 9.

      For purposes of this Article 9, a ―Person‖ shall include an individual, a group acting in concert, a corporation, a partnership, an
association, a joint venture, a pool, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other
group or entity formed for the purpose of acquiring, holding or disposing of securities.

                                                                           8
     ARTICLE 10. Indemnification, etc. of Directors and Officers.
       A. Indemnification. The Corporation shall indemnify (1) its current and former directors and officers, whether serving the Corporation
or at its request any other entity, to the fullest extent required or permitted by the MGCL now or hereafter in force, including the advancement
of expenses under the procedures and to the fullest extent permitted by law, and (2) other employees and agents to such extent as shall be
authorized by the Board of Directors and permitted by law; provided, however, that, except as provided in Section B of this Article 10 with
respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.

       B. Procedure. If a claim under Section A of this Article 10 is not paid in full by the Corporation within sixty (60) days after a written
claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period
shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the
claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall also be entitled to be reimbursed the expense of prosecuting or defending such suit. It shall
be a defense to any action for advancement of expenses that the Corporation has not received both (i) an undertaking as required by law to
repay such advances in the event it shall ultimately be determined that the standard of conduct has not been met and (ii) a written affirmation
by the indemnitee of his good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met. In (i) any
suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to
an advancement of expenses) it shall be a defense that, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable standard for indemnification set forth in the MGCL. Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the MGCL, nor an
actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under
this Article 10 or otherwise shall be on the Corporation.

                                                                        9
      C. Non-Exclusivity. The rights to indemnification and to the advancement of expenses conferred in this Article 10 shall not be exclusive
of any other right that any Person may have or hereafter acquire under any statute, these Articles, the Corporation’s Bylaws, any agreement,
any vote of stockholders or the Board of Directors, or otherwise.

     D. Insurance. The Corporation may maintain insurance, at its expense, to insure itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such Person against such expense, liability or loss under the MGCL.

      E. Miscellaneous. The Corporation shall not be liable for any payment under this Article 10 in connection with a claim made by any
indemnitee to the extent such indemnitee has otherwise actually received payment under any insurance policy, agreement, or otherwise, of the
amounts otherwise indemnifiable hereunder. The rights to indemnification and to the advancement of expenses conferred in Sections A and B
of this Article 10 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall
inure to the benefit of the indemnitee’s heirs, executors and administrators.

      F. Limitations Imposed by Federal Law. Notwithstanding any other provision set forth in this Article 10, in no event shall any
payments made by the Corporation pursuant to this Article 10 exceed the amount permissible under applicable federal law, including, without
limitation, Section 18(k) of the Federal Deposit Insurance Act and the regulations promulgated thereunder.

      Any repeal or modification of this Article 10 shall not in any way diminish any rights to indemnification or advancement of expenses of
such director or officer or the obligations of the Corporation arising hereunder with respect to events occurring, or claims made, while this
Article 10 is in force.

      ARTICLE 11. Limitation of Liability. An officer or director of the Corporation, as such, shall not be liable to the Corporation or its
stockholders for money damages, except (A) to the extent that it is proved that the Person actually received an improper benefit or profit in
money, property or services, for the amount of the benefit or profit in money, property or services actually received; or (B) to the extent that a
judgment or other final adjudication adverse to the Person is entered in a proceeding based on a finding in the proceeding that the Person’s
action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding;
or (C) to the extent otherwise provided by the MGCL. If the MGCL is amended to further eliminate or limit the personal liability of officers
and directors, then the liability of officers and directors of the Corporation shall be eliminated or limited to the fullest extent permitted by the
MGCL, as so amended.

      Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or
protection of a director or officer of the Corporation existing at the time of such repeal or modification.

      ARTICLE 12. Amendment of the Articles of Incorporation. The Corporation reserves the right to amend or repeal any provision
contained in these Articles in the manner prescribed by the MGCL, including any amendment altering the terms or contract rights, as

                                                                         10
expressly set forth in these Articles, of any of the Corporation’s outstanding stock by classification, reclassification or otherwise, and no
stockholder approval shall be required if the approval of stockholders is not required for the proposed amendment or repeal by the MGCL, and
all rights conferred upon stockholders are granted subject to this reservation.

     The Board of Directors, pursuant to a resolution approved by a majority of the Whole Board (rounded up to the nearest whole number),
and without action by the stockholders, may amend these Articles to increase or decrease the aggregate number of shares of stock or the
number of shares of stock of any class or series that the Corporation has authority to issue.

      No proposed amendment or repeal of any provision of these Articles shall be submitted to a stockholder vote unless the Board of
Directors shall have (1) approved the proposed amendment or repeal, (2) determined that it is advisable, and (3) directed that it be submitted for
consideration at either an annual or special meeting of the stockholders pursuant to a resolution approved by the Board of Directors. Any
proposed amendment or repeal of any provision of these Articles may be abandoned by the Board of Directors at any time before its effective
time upon the adoption of a resolution approved by a majority of the Whole Board (rounded up to the nearest whole number).

       The amendment or repeal of any provision of these Articles shall be approved by at least two-thirds of all votes entitled to be cast by the
holders of shares of capital stock of the Corporation entitled to vote on the matter (after giving due effect to the provisions of Article 5 of these
Articles), except that the proposed amendment or repeal of any provision of these Articles need only be approved by the vote of a majority of
all the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote on the matter (after giving due effect
to the provisions of Article 5 of these Articles) if the amendment or repeal of such provision is approved by the Board of Directors pursuant to
a resolution approved by at least two-thirds of the Whole Board (rounded up to the nearest whole number).

      Notwithstanding any other provision of these Articles or any provision of law that might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by these Articles, the affirmative
vote of the holders of at least 80% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors (after giving effect to the provisions of Article 5), voting together as a single class, shall be required
to amend or repeal this Article 12, Section C, D, E or F of Article 5, Article 7, Article 8, Article 9, Article 10 or Article 11.

                                                                          11
ARTICLE 13. Name and Address of Incorporator. The name and mailing address of the sole incorporator are as follows:

                                                     Steven Lanter
                                           5335 Wisconsin Ave., N.W., Suite 780
                                                 Washington, D.C. 20015

                                      [Remainder of Page Intentionally Left Blank]

                                                            12
      I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a corporation under the laws of the State of Maryland, do
make, file and record this Charter, do certify that the facts herein stated are true, and, accordingly, have hereto set my hand this 15th day of
June, 2010.

                                                                                        /s/ Steven Lanter
                                                                                        Steven Lanter, Incorporator

                                                                        13
                                                                                                                                        Exhibit 3.2

                                                              SP BANCORP, INC.

                                                                    BYLAWS

                                                                 ARTICLE I
                                                               STOCKHOLDERS

Section 1. Annual Meeting.
     The Corporation shall hold an annual meeting of its stockholders to elect directors and to transact any other business within its powers, at
such place, on such date and at such time as the Board of Directors shall fix. Failure to hold an annual meeting does not invalidate the
Corporation’s existence or affect any otherwise valid corporate act.

Section 2. Special Meetings.
       Special meetings of stockholders of the Corporation may be called by the President or by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors that the Corporation would have if there were no vacancies on the Board of Directors
(hereinafter the ―Whole Board‖). Special meetings of the stockholders shall be called by the Secretary at the request of stockholders only on the
written request of stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting. Such written request shall
state the purpose or purposes of the meeting and the matters proposed to be acted upon at the meeting, and shall be delivered at the principal
office of the Corporation addressed to the President or the Secretary. The Secretary shall inform the stockholders who make the request of the
reasonably estimated cost of preparing and mailing a notice of the meeting and, upon payment of these costs to the Corporation, notify each
stockholder entitled to notice of the meeting. The Board of Directors shall have the sole power to fix (i) the record date for determining
stockholders entitled to request a special meeting of stockholders and the record date for determining stockholders entitled to notice of and to
vote at the special meeting and (ii) the date, time and place of the special meeting and the means of remote communication, if any, by which
stockholders and proxy holders may be considered present in person and may vote at the special meeting.

Section 3. Notice of Meetings; Adjournment.
      Not less than 10 nor more than 90 days before each stockholders’ meeting, the Secretary shall give notice of the meeting in writing or by
electronic transmission to each stockholder entitled to vote at the meeting and to each other stockholder entitled to notice of the meeting. The
notice shall state the time and place of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may
be deemed to be present in person and may vote at the meeting, and, if the meeting is a special meeting or notice of the purpose is required by
statute, the purpose of the meeting. Notice is given to a stockholder when it is personally delivered to the stockholder, left at the stockholder’s
residence or usual place of business, mailed to the stockholder at his or her address as it appears on the records of the Corporation, or
transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives
electronic transmissions. If the Corporation has
received a request from a stockholder that notice not be sent by electronic transmission, the Corporation may not provide notice to the
stockholder by electronic transmission. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if such
person, before or after the meeting, delivers a written waiver or waiver by electronic transmission which is filed with the records of the
stockholders’ meetings, or is present at the meeting in person or by proxy.

      A meeting of stockholders convened on the date for which it was called may be adjourned from time to time without further notice to a
date not more than 120 days after the original record date. At any adjourned meeting, any business may be transacted that might have been
transacted at the original meeting.

     As used in these Bylaws, the term ―electronic transmission‖ shall have the meaning given to such term by Section 1-101( l ) of the
Maryland General Corporation Law (the ―MGCL‖) or any successor provision.

Section 4. Quorum.
      Unless the Articles of the Corporation provide otherwise, where a separate vote by a class or classes is required, a majority of the shares
of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on
that matter.

      If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock who are
present at the meeting, in person or by proxy, may, in accordance with Section 3 of this Article I, adjourn the meeting to another place, date or
time.

Section 5. Organization and Conduct of Business.
     The Chairman of the Board of the Corporation or Chief Executive Officer, or in his or her absence, the President, or in his or her absence,
such other person as may be designated by a majority of the Whole Board, shall call to order any meeting of the stockholders and act as
chairman of the meeting. In the absence of the Secretary, the secretary of the meeting shall be such person as the chairman appoints. The
chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of discussion as seem to him or her in order.

Section 6. Advance Notice Provisions for Business to be Transacted at Annual Meetings and Elections of Directors.
      (a) At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) as
specified in the Corporation’s notice of the meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the
Corporation who: (1) is a stockholder of record on the date such stockholder gives the notice provided for in this Section 6(a) and on the record
date for the determination of stockholders entitled to vote at such annual meeting; and (2) complies with the notice procedures set forth in this
Section 6(a). For business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of the immediately
preceding sentence, the stockholder must have given

                                                                         2
timely notice thereof in writing to the Secretary of the Corporation and such business must otherwise be a proper matter for action by
stockholders. To be timely, a stockholder’s notice must be delivered or mailed to and received by the Secretary of the Corporation at the
principal executive office of the Corporation not less than 80 days nor more than 90 days prior to any such meeting; provided, however, that if
less than 90 days’ notice or prior public disclosure of the date of the meeting is given to stockholders, such written notice shall be delivered or
mailed to and received by the Secretary of the Corporation at the principal executive office of the Corporation not later than the tenth day
following the day on which notice of the meeting was mailed to stockholders or such public disclosure was made.

       A stockholder’s notice to the Secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the
annual meeting; (ii) the name and address of such stockholder as they appear on the Corporation’s books and of the beneficial owner, if any, on
whose behalf the proposal is made; (iii) the class or series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder and such beneficial owner; (iv) a description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and
any material interest of such stockholder in such business; and (v) a representation that such stockholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.

      Notwithstanding anything in these Bylaws to the contrary, no business shall be brought before or conducted at an annual meeting except
in accordance with the provisions of this Section 6(a). The officer of the Corporation or other person presiding over the annual meeting shall, if
the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the
provisions of this Section 6(a) and, if he or she should so determine, he or she shall so declare to the meeting and any such business so
determined to be not properly brought before the meeting shall not be transacted.

      At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting pursuant
to the Corporation’s notice of the meeting.

       (b) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the
Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at
which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who (1) is
a stockholder of record on the date such stockholder gives the notice provided for in this Section 6(b) and on the record date for the
determination of stockholders entitled to vote at such meeting, and (2) complies with the notice procedures set forth in this Section 6(b). Such
nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the Secretary
of the Corporation. To be timely, a stockholder’s notice shall be delivered or mailed to and received by the Secretary of the Corporation at the
principal executive office of the Corporation not less than 80 days nor more than 90 days prior to any such meeting; provided, however, that if
less than 90 days’ notice or prior public disclosure of the date of the meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than the tenth day following the day on which notice of the meeting was
mailed to stockholders or such public disclosure was made.

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      A stockholder’s notice must be in writing and set forth (a) as to each person whom the stockholder proposes to nominate for election as a
director, (i) all information relating to such person that would indicate such person’s qualification to serve on the Board of Directors of the
Corporation; (ii) an affidavit that such person would not be disqualified under the provisions of Article II, Section 12 of these Bylaws; (iii) such
information relating to such person that is required to be disclosed in connection with solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the ―Exchange Act‖), or
any successor rule or regulation and (iv) a written consent of each proposed nominee to be named as a nominee and to serve as a director if
elected; and (b) as to the stockholder giving the notice: (i) the name and address of such stockholder as they appear on the Corporation’s books
and of the beneficial owner, if any, on whose behalf the nomination is made; (ii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by such stockholder and such beneficial owner; (iii) a description of all arrangements or
understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder; (iv) a representation that such stockholder intends to appear in person or by proxy
at the meeting to nominate the persons named in its notice; and (v) any other information relating to such stockholder that would be required to
be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors
pursuant to Regulation 14A under the Exchange Act or any successor rule or regulation. No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the provisions of this Section 6(b). The chairman of the meeting shall, if the facts so
warrant, determine that a nomination was not made in accordance with such provisions and, if he or she should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.

      (c) For purposes of subsections (a) and (b) of this Section 6, the term ―public disclosure‖ shall mean disclosure (i) in a press release
reported by a nationally recognized news service, (ii) in a document publicly filed or furnished by the Corporation with the U.S. Securities and
Exchange Commission or (iii) on a website maintained by the Corporation. The timely notice requirements provided in subsections (a) and
(b) of this Section 6 shall apply to all stockholder nominations for election as a director and all stockholder proposals for business to be
conducted at an annual meeting regardless of whether such proposal is submitted for inclusion in the Corporation’s proxy materials pursuant to
Rule 14a-8 of Regulation 14A under the Exchange Act.

Section 7. Proxies and Voting.
      Unless the Articles of the Corporation provide for a greater or lesser number of votes per share or limits or denies voting rights, each
outstanding share of stock, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of stockholders; however,
a share is not entitled to be voted if any installment payable on it is overdue and unpaid. In all

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elections for directors, directors shall be determined by a plurality of the votes cast, and except as otherwise required by law or as provided in
the Articles of the Corporation, all other matters voted on by stockholders shall be determined by a majority of the votes cast on the matter.

      A stockholder may vote the stock the stockholder owns of record either in person or by proxy. A stockholder may sign a writing
authorizing another person to act as proxy. Signing may be accomplished by the stockholder or the stockholder’s authorized agent signing the
writing or causing the stockholder’s signature to be affixed to the writing by any reasonable means, including facsimile signature. A
stockholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of, an authorization for the person to
act as the proxy to the person authorized to act as proxy or to any other person authorized to receive the proxy authorization on behalf of the
person authorized to act as the proxy, including a proxy solicitation firm or proxy support service organization. The authorization may be
transmitted by a telegram, cablegram, datagram, electronic mail or any other electronic or telephonic means. Unless a proxy provides
otherwise, it is not valid more than 11 months after its date. A proxy is revocable by a stockholder at any time without condition or
qualification unless the proxy states that it is irrevocable and the proxy is coupled with an interest. A proxy may be made irrevocable for as
long as it is coupled with an interest. The interest with which a proxy may be coupled includes an interest in the stock to be voted under the
proxy or another general interest in the Corporation or its assets or liabilities.

Section 8. Conduct of Voting
      The Board of Directors shall, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, to act at
the meeting or any adjournment thereof and make a written report thereof, in accordance with applicable law. At all meetings of stockholders,
the proxies and ballots shall be received, and all questions relating to the qualification of voters and the validity of proxies and the acceptance
or rejection of votes shall be decided or determined by the inspector of election. All voting, including on the election of directors but excepting
where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or his
or her proxy or the chairman of the mee