UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2011~~2012

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 0-21554

DENMARK BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Wisconsin	39-1472124
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

103 East Main Street, Denmark, Wisconsin 54208-0130

(Address of principal executive offices, zip code)

(920) 863-2161

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]

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 definition 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 _X_Smaller reporting company

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of ~~November~~May 24, ~~2011~~2012, there were 118,~~917~~568 shares of the registrant's common stock (no par value) outstanding.

DENMARK BANCSHARES, INC.

TABLE OF CONTENTS

Quarterly Report on Form 10-Q

For the Quarter Ended ~~September~~March 3031, ~~2011~~2012

Page No.

PART I. Financial Information

Item 1. Financial Statements

Consolidated Statements of Financial Condition 3

Consolidated Statements of Income 4

Consolidated Statements of Comprehensive Income 5

Consolidated Statements of Changes in Stockholders' Equity 5

Consolidated Statements of Cash Flows 6

Notes to Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of Financial Condition

and Results of Operations 1921

Item 3. Quantitative and Qualitative Disclosures About Market Risk 2928

Item 4. Controls and Procedures 2928

PART II. Other Information

Item 1A. Risk Factors 2928

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29

Item 6. Exhibits 29

Signatures
30

Item 1. Financial Statements

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

		September 30,	December 31,
		March 31,	December 31,
		2011	2010
		2012	2011
		(Unaudited)
Assets
	Cash and due from banks	$1820,~~170~~306,~~414~~017	$1621,~~917~~905,~~728~~812
	Federal funds sold	117,~~011~~158,000	1820,~~321~~187,000
	Investment securities available-for-sale, at fair value	6576,~~756~~787,~~700~~355	6367,~~049~~610,~~646~~693
	Loans	~~295~~301,~~510~~606,~~853~~123	~~299~~297,~~355~~832,~~004~~116
	Allowance for credit losses	(6,~~518~~603,~~417~~188)	(6,~~864~~578,~~497~~087)
	Net loans	$~~288~~295,~~992~~002,~~436~~935	$~~292~~291,~~490~~254,~~507~~029
	Loans held for sale	1434,~~217,728~~875	3485,~~715,671~~926
	Premises and equipment, net	7,~~184~~047,~~572~~443	7,~~368~~085,~~904~~783
	Other investments, at cost	53,~~586~~106,~~123~~696	4,~~608~~404,~~899~~811
	Accrued interest receivable	1,~~339~~392,~~453~~095	1,~~204~~244,~~984~~473
	Other assets	1311,~~301~~495,~~359~~737	1211,~~637~~807,~~998~~370
	TOTAL ASSETS	$~~412~~422,~~559~~731,~~785~~153	$~~420~~425,~~315~~985,~~337~~897
Liabilities
	Deposits
	Noninterest-bearing	$4139,~~189~~594,~~344~~755	$3747,~~965~~469,~~690~~622
	Interest-bearing	~~274~~285,~~042~~327,~~753~~600	~~282~~280,~~533~~323,~~731~~469
	Total Deposits	$~~315~~324,~~232~~922,~~097~~355	$~~320~~327,~~499~~793,~~421~~091
	Short-term borrowings	11,~~608~~208,861	1311,~~888~~558,~~046~~861
	Accrued interest payable	~~344~~333,~~931~~690	~~404~~334,~~467~~178
	Other liabilities	1988,~~228,024~~381	1,~~897~~794,~~580~~808
	Long-term debt	28,~~149~~473,~~999~~699	2928,~~699~~481,999
	Total Liabilities	$~~356~~365,~~563~~926,~~912~~986	$~~366~~369,~~389~~962,~~513~~937
Stockholders' Equity
	Common stock, no par value,	$18,173,975	$18,173,975
	Common stock, no par value, authorized 640,000 shares; outstanding 118,568 shares at 3/31/12 and 118,917 shares at 12/31/11	$18,173,975	$18,173,975
	authorized 640,000 shares; outstanding 118,917
	Treasury stock shares, at cost (2,962 at 3/31/12 and 2,613 at 12/31/11)	(2,272,445)	(2,125,865)
	Treasury stock shares, at cost (2,613 shares)	(2,125,865)	(2,125,865)
	Paid in capital	469,986	469,986
	Retained earnings	3940,~~798~~767,~~723~~444	3839,~~031~~918,~~717~~706
	Accumulated other comprehensive loss	(~~320~~334,~~946~~793)	(~~623~~413,~~989~~842)
	Total Stockholders' Equity	$5556,~~995~~804,~~873~~167	$5356,~~925~~022,~~824~~960
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$~~412~~422,~~559~~731,~~785~~153	$~~420~~425,~~315~~985,~~337~~897
The accompanying notes are an integral part of these financial statements.

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

		For the Three Months Ended		~~For the Nine Months Ended~~
		September 30,	September 30,	September 30,	September 30,
		March 31,	March 31,
		2011	2010	2011	2010
		2012	2011
Interest Income
	Loans including fees	$3,~~842~~786,~~778~~010	$43,~~277~~988,~~404~~583	~~$11,766,974~~	~~$12,700,274~~
	Investment securities:
	Taxable	~~312~~278,~~467~~430	~~247~~244,~~716~~923	~~859,684~~	~~807,570~~
	Exempt from federal tax	~~228~~194,~~527~~405	~~361~~324,~~813~~195	~~804,398~~	~~1,142,844~~
	Interest on federal funds sold	34,~~579~~649	17,~~835~~469	~~14,552~~	~~9,047~~
	Other interest income	1841,~~306~~090	1253,~~846~~688	~~91,203~~	~~62,204~~
		$4,405,657	$4,901,614	$13,536,811	$14,721,939
		$4,304,584	$4,618,858
Interest Expense
	Deposits	$~~724~~634,~~852~~669	$~~927~~822,~~757~~348	~~$2,317,112~~	~~$2,910,531~~
	Short-term borrowings	2614,~~770~~854	4029,~~534~~457	~~84,121~~	~~130,379~~
	Long-term debt	~~250~~246,~~967~~426	~~262~~251,~~143~~186	~~756,977~~	~~809,017~~
		$1,002,589	$1,230,434	$3,158,210	$3,849,927
		$895,949	$1,102,991
	Net interest income	$3,~~403~~408,~~068~~635	$3,~~671~~515,~~180~~867	~~$10,378,601~~	~~$10,872,012~~
Provision for Credit Losses		150,000	~~310~~150,000	~~450,000~~	~~1,040,000~~
	Net interest income after
	Net interest income after provision for credit losses	$3,258,635	$3,365,867
	provision for credit losses	$3,253,068	$3,361,180	$9,928,601	$9,832,012
Other Income
Other Income
	Service fees and commissions	$307,511	$208,811
	Service fees and commissions	$222,531	$218,475	$669,946	$659,319
	Loan sale gains	117,804	79,471
	Loan sale gains	64,087	111,290	183,186	204,869
	Other	170,323	202,524
	Investment security gains	0	0	31,953	68,156
		$595,638	$490,806
	Other	197,324	212,182	598,539	600,712
Other-than-Temporary Impairment Losses, Net
		$483,942	$541,947	$1,483,624	$1,533,056
	Total other-than-temporary impairment losses	$1,664,868	$916,690
Other-than-Temporary Impairment Losses, Net
	Amount in other comprehensive income, before taxes	(1,631,993)	(892,216)
	Total other-than-temporary impairment losses	$65,662	$990,228	$1,028,888	$990,228
		$32,875	$24,474
	Amount in other comprehensive income, before taxes	(20,175)	(980,326)	(878,574)	(980,326)
Other Expense
		$45,487	$9,902	$150,314	$9,902
	Salaries and employee benefits	$1,579,870	$1,515,154
Other Expense
	Occupancy expenses	228,093	245,035
	Salaries and employee benefits	$1,553,044	$1,551,418	$4,565,844	$4,786,402
	FDIC Insurance	74,463	165,000
	Occupancy expenses	223,936	283,585	707,982	805,601
	Data processing expenses	242,536	198,202
	FDIC Insurance	74,000	179,034	320,000	481,058
	Professional fees	87,650	97,589
	Data processing expenses	195,337	161,832	588,291	513,437
	Amortization of intangibles	48,098	48,098
	Professional fees	89,327	83,835	274,659	260,289
	Loss on sale of other real estate	59,984	6,520
	Amortization of intangibles	48,097	48,097	144,293	144,293
	Other real estate expenses	18,908	79,580
	(Gain) loss on sale of other real estate	48,143	34,380	66,034	(6,557)
	Other operating expenses	199,533	196,792
	Other real estate expenses	21,310	84,584	175,505	293,772
		$2,539,135	$2,551,970
	Other operating expenses	214,995	224,163	664,063	671,307
	Income before income taxes	$1,282,263	$1,280,229
		$2,468,189	$2,650,928	$7,506,671	$7,949,602
	Income tax expense	433,525	367,364
	Income before income taxes	$1,223,334	$1,242,297	$3,755,240	$3,405,564
	NET INCOME	$848,738	$912,865
	Income tax expense	375,241	336,530	1,126,086	865,021
	Per Share
	NET INCOME	$848,093	$905,767	$2,629,154	$2,540,543
	Net income	$7.14	$7.68
	Per Share
	Dividends declared	$0.00	$0.00
	Net income	$7.13	$7.61	$22.11	$21.36
	Weighted average shares outstanding	118,897	118,917
	Dividends declared	$7.25	$0.00	$7.25	$7.25
The accompanying notes are an integral part of these financial statements.
	Weighted average shares outstanding	118,917	118,917	118,917	118,917
The accompanying notes are an integral part of these financial statements.

Denmark Bancshares, Inc.
Consolidated Statement of Changes in Stockholders' Equity
(Unaudited)
Common Stock Accumulated
Other
Paid in Retained Comprehensive
Shares Amount Capital Earnings Income Total
Balance, December 31, 2010 118,917 $16,048,110 $469,986 $38,031,717 ($623,989) $53,925,824
Comprehensive income
Net income 2,629,154 2,629,154
Other comprehensive income, net of tax
Change in unrealized loss on securities available-for-sale,
net of reclassification adjustment (1) 303,043 303,043
Total comprehensive income $2,932,197
Cash dividends, $7.25 per share (862,148) (862,148)
Balance, September 30, 2011 118,917 $16,048,110 $469,986 $39,798,723 ($320,946) $55,995,873
(1) Disclosure of reclassification amount:
Unrealized gains arising during the period $432,292
Less: Tax expense on unrealized gains (200,266)
Plus: Reclassification adjustment for losses realized and included in net income 118,361
Less: Reclassification adjustment for tax benefit on realized losses (47,344)
Net change in unrealized losses on securities $303,043
The accompanying notes are an integral part of these financial statements.
Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended
	March 31,	March 31,
	2012	2011
Net income	$848,738	$912,865
Other comprehensive income (loss), net of tax
Unrealized gains on securities
Unrealized holding gains (losses) arising during period	194,109	(181,659)
Plus: Reclassification adjustment for losses included in net income	32,875	24,474
Other comprehensive income (loss)	226,984	(157,185)
Income tax (expense) benefit related to items of other comprehensive income	(147,935)	50,050
Other comprehensive income (loss), net of tax	$79,049	($107,135)
Comprehensive income	$927,787	$805,730

*Denmark Bancshares, Inc.*
*Consolidated Statement of Changes in Stockholders' Equity*
(Unaudited)

	Common Stock				Accumulated
					Other
			Paid in	Retained	Comprehensive
	Shares	Amount	Capital	Earnings	Income	Total
Balance, December 31, 2011	118,917	$16,048,110	$469,986	$39,918,706	($413,842)	$56,022,960
Comprehensive income
Net income				848,738		848,738
Other comprehensive income, net of tax
Change in unrealized loss on securities available-for-sale,
net of reclassification adjustment					79,049	79,049
Total comprehensive income						$927,787
Treasury stock acquisitions	(349)	(146,580)				(146,580)
Balance, March 31, 2012	118,568	$15,901,530	$469,986	$40,767,444	($334,793)	$56,804,167

The accompanying notes are an integral part of these financial statements.

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

		For the Nine Months Ended
		For the Three Months Ended
		September 30,
		March 31,
		2011	2010
		2012	2011
Cash Flows from Operating Activities:
	Net income	$2848,~~629,154~~738	$2912,~~540,543~~865
	Adjustments to reconcile net income to
	net cash provided by operating activities:
	net cash provided by (used in) operating activities:
	Depreciation	~~300~~94,~~391~~782	~~368~~104,~~357~~123
	Provision for credit losses	~~450~~150,000	1150,~~040,~~000
	Amortization of intangibles	~~144~~48,~~293~~098	~~144~~48,~~293~~098
	Gains on sales of loans	(~~183~~117,~~186~~804)	(~~204~~79,~~869~~741)
	Loss (gains) on sale of other real estate	66,033	(6,557)
	Loss on sale of other real estate	59,984	6,520
	Gains on sale of securities	(31,953)	(68,156)
	Loss on investment securities impairment writedowns	32,875	24,474
	Loss on investment securities impairment writedowns	150,314	9,902
	Amortization of bond premium	175,636	103,464
	Amortization of bond premium	365,643	221,278
	Accretion of bond discount	(20,196)	(60,630)
	Accretion of bond discount	(133,183)	(208,895)
	Mortgage loans originated for sale	(7,695,636)	(7,517,838)
	Mortgage loans originated for sale	(12,348,289)	(17,587,659)
	Proceeds from sale of mortgage loans	7,863,777	4,082,962
	Proceeds from sale of mortgage loans	14,846,232	18,395,472
	Income from bank owned life insurance	(66,299)	(66,000)
	Income from bank owned life insurance	(197,648)	(198,021)
	Increase in interest receivable	(147,622)	(154,827)
	Increase in interest receivable	(134,469)	(57,622)
	(Decrease) increase in interest payable	(488)	1,162
	Decrease in interest payable	(59,536)	(124,885)
	Other, net	68,286	(41,627)
	Other, net	483,899	1,388,918
	Net Cash Provided by (Used in) Operating Activities	$1,294,131	($2,486,995)
	Net Cash Provided by Operating Activities	$6,347,695	$5,652,099
Cash Flows from Investing Activities:
	Maturities of held-to-maturity securities	$0	$4,390,000
	Maturities and sales of available-for-sale securities	$4,773,194	$5,865,794
	Maturities and sales of available-for-sale securities	20,127,771	15,317,843
	Purchases of available-for-sale securities	(13,911,187)	(6,974,158)
	Purchases of available-for-sale securities	(22,753,354)	(15,515,978)
	Net purchases of money market mutual funds	0	(37,682)
	Money market mutual funds, net	(977,224)	330,215
	Proceeds from sale of FHLB common stock	1,298,115	0
	Federal funds sold, net	713,~~310~~029,000	32,~~500~~455,000
	Proceeds from sale of foreclosed assets	~~922~~206,~~266~~350	~~745~~593,~~926~~279
	Net decrease (increase) in loans made to customers	1,212,397	(5,548,096)
	Net (increase) decrease in loans made to customers	(3,995,192)	6,359,211
	Capital expenditures	(~~116~~56,~~059~~442)	(~~249~~5,~~649~~843)
	Net Cash Provided by Investing Activities	$51,~~725~~343,~~797~~838	$28,~~970~~255,~~261~~601
Cash Flows from Financing Activities:
	Net decrease in deposits	($52,~~267~~870,~~324~~736)	($47,~~754~~105,~~862~~967)
	Dividends paid	(1,724,297)	(1,724,297)
	Purchase of treasury stock	(146,580)	0
	Debt proceeds	1,995,815	9,034,476
	Dividends paid	(862,148)	(862,148)
	Debt repayments	(5,825,000)	(15,379,999)
	Debt proceeds	900,000	1,600,000
	Net Cash Used in Financing Activities	($10,820,806)	($12,824,682)
	Debt repayments	(1,258,300)	(1,825,000)
	Net increase (decrease) in cash and cash equivalents	$1,252,686	($4,202,322)
	Net Cash Used in Financing Activities	($4,237,764)	($8,193,115)
	Cash and cash equivalents, beginning	16,917,728	17,425,697
	Net decrease in cash and cash equivalents	($1,599,795)	($2,424,509)
	CASH AND CASH EQUIVALENTS, ENDING	$18,170,414	$13,223,375
	Cash and cash equivalents, beginning	21,905,812	16,917,728
	CASH AND CASH EQUIVALENTS, ENDING	$20,306,017	$14,493,219
Noncash Investing Activities:
	Loans transferred to foreclosed properties	$297,~~018,860~~000	$1109,~~032,603~~558
Supplemental Cash Flow Disclosures:
	Cash paid for interest	$2896,~~381,061~~529	$3821,~~040,243~~866
	Cash paid for income taxes	~~766~~425,~~980~~000	~~836~~130,~~939~~980
	The accompanying notes are an integral part of these financial statements.

NOTE 1 - FINANCIAL STATEMENTS

The consolidated financial statements included herein are unaudited. In the opinion of management, these statements contain all adjustments necessary to present fairly the financial position of Denmark Bancshares, Inc. ("DBI"), its results of ~~operation~~operations and cash flows for the periods presented. All adjustments necessary for the fair presentation of the financial statements are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes ~~hereto~~thereto included in DBI's latest annual report on Form 10-K. DBI's subsidiaries are Denmark State Bank ("DSB"), Denmark Agricultural Credit Corporation ("DACC"), and DBI Properties, Inc. ("Properties").

Reclassifications
- Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform to the presentation in the current year.

NOTE 2 - INVESTMENT SECURITIES

The amortized cost and estimated fair market value of securities available-for-sale were as follows:

	September 30, 2011
	March 31, 2012
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
U.S. Government-sponsored agencies	$5,500,000	$810,~~550~~450	($015,600)	$~~508~~5,~~550~~494,850
U.S. Government-sponsored agency MBS	3139,~~489~~628,~~259~~939	~~664~~620,~~144~~228	0(51,036)	3240,~~153~~198,~~403~~131
State and local governments	24,~~874~~083,~~220~~233	1,~~039~~048,~~083~~271	(~~210~~136,~~071~~314)	2524,~~703~~995,~~232~~190
Residential mortgage-backed securities	98,~~531~~133,~~748~~171	5424,~~985~~746	(2,~~195~~058,~~218~~733)	76,~~391~~099,~~515~~184
	$66,395,227	$1,766,762	($2,405,289)	$65,756,700
	$77,345,343	$1,703,695	($2,261,683)	$76,787,355
	December 31, 2010
	December 31, 2011
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
U.S. Government-sponsored agencies	$03,500,000	$017,050	$0	$03,517,050
U.S. Government-sponsored agency MBS	2031,~~854~~729,~~514~~409	~~251~~505,~~779~~292	(418,~~020~~172)	2132,~~065~~226,~~273~~529
State and local governments	3024,~~524~~628,~~272~~519	~~876~~1,~~975~~032,038	(~~494~~192,~~985~~058)	3025,~~906~~468,~~262~~499
Residential mortgage-backed securities	128,~~741~~537,~~679~~737	~~117~~26,~~494~~590	(12,~~781~~165,~~062~~712)	116,~~078~~398,~~111~~615
	$64,120,465	$1,246,248	($2,317,067)	$63,049,646
	$68,395,665	$1,580,970	($2,365,942)	$67,610,693

Proceeds of $83.43 million from ~~calls,~~normal ~~$2.1 million from maturities~~pay-downs, $21.0 million from ~~sales~~calls and $70.65 million from ~~normal~~maturities ~~pay-downs~~ were ~~primarily~~received ~~used~~during ~~for~~ the ~~purchases~~first quarter of 2012. Purchases of $1711.41 million of agency mortgage-backed securities, ~~$3.5 million taxable municipals~~("MBS"), $12.50 million of agencies and $0.38 million of ~~tax-exempt~~taxable municipals ~~to provide better liquidity and less credit risk. There~~ were nomade ~~purchases of non-agency mortgage-backed securities to date~~ during ~~2011. The~~this ~~sales~~same ~~during 2011 consisted of two non-agency mortgage-backed securities and one agency mortgage-backed security~~period. ~~The~~ ~~sales were executed to improve credit quality and to utilize a portion of a capital loss carry forward at DSB's Nevada investment subsidiary.~~

The amortized cost and estimated fair values of securities at ~~September~~March 3031, ~~2011~~2012, by maturity were as follows:

	Securities Available-for-Sale
		Estimated
	Amortized	Fair
Amounts Maturing	Cost	Value
Within one year	$2,~~281~~684,~~790~~867	$2,~~296~~753,~~695~~922
From one through five years	3940,~~083~~162,~~528~~778	3839,~~960~~957,~~720~~488
From five through ten years	1321,~~083~~450,~~827~~486	1321,~~330~~216,~~070~~280
After ten years	1113,~~946~~047,~~082~~212	1112,~~169~~859,~~215~~665
	$66,395,227	$65,756,700
	$77,345,343	$76,787,355

~~Mortgage-backed~~MBS ~~securities~~ are allocated according to their expected prepayments rather than their contractual maturities. Certain state and local governments' securities are allocated according to their put date. Fair values of securities are estimated based on financial models or prices paid for similar securities. It is possible interest rates could change considerably resulting in a material change in the estimated fair value of the securities.

At ~~September~~March 3031, ~~2011~~2012, ~~seven~~twenty debt securities have unrealized losses with aggregate depreciation of 2410.64% from DSB's amortized cost basis. Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:

September 30, 2011	Less Than Twelve Months		Over Twelve Months
March 31, 2012	Less Than Twelve Months		Over Twelve Months
	Gross	Estimated	Gross	Estimated
	Unrealized	Fair	Unrealized	Fair
Securities Available for Sale	Losses	Value	Losses	Value
U.S. Government-sponsored agencies	$015,600	$01,984,400	$0	$0
U.S. Government-sponsored agency MBS	051,036	08,879,481	0	0
State and local governments	024,886	01,518,591	~~210~~111,~~071~~428	1,~~811~~875,~~199~~195
Residential mortgage-backed securities	~~726,558~~0	~~1,341,624~~0	12,~~468~~058,~~660~~733	45,~~219~~192,~~020~~342
Total securities available for sale	$~~726~~91,~~558~~522	$112,~~341~~382,~~624~~472	$12,~~678~~170,~~731~~161	$67,~~030~~067,~~219~~537
December 31, 2010	Less Than Twelve Months		Over Twelve Months
December 31, 2011	Less Than Twelve Months		Over Twelve Months
	Gross	Estimated	Gross	Estimated
	Unrealized	Fair	Unrealized	Fair
Securities Available for Sale	Losses	Value	Losses	Value
U.S. Government-sponsored agency MBS	$418,~~020~~172	$52,~~082~~388,~~159~~919	$0	$0
State and local governments	6714,~~071~~144	3817,~~284,508~~753	~~427~~177,914	1,~~592~~808,~~771~~504
Residential mortgage-backed securities	~~628,597~~0	~~2,796,779~~0	12,~~152~~165,~~465~~712	45,~~110~~359,~~985~~064
Total securities available for sale	$~~736~~22,~~688~~316	$113,~~163~~206,~~446~~672	$12,~~580~~343,~~379~~626	$57,~~703~~167,~~756~~568

All securities with unrealized losses are assessed to determine if the impairment is other-than-temporary. Factors that are evaluated include the mortgage loan types supporting the securities, delinquency and foreclosure rates, credit support, weighted average loan-to-value, and year of origination, among others.

Currently, a quarterly analysis by a third party is performed on three residential ~~mortgage-backed~~MBS ~~securities~~ secured by non-traditional loan types in order to determine whether they are other-than-temporarily impaired ("OTTI"). The purpose of the third party evaluation is to determine if the present value of the expected cash flows is less than the amortized costs, thereby resulting in credit loss, in accordance with the authoritative accounting guidance under FASB ASC Topic 320. The third party determines an estimated fair value for each security based on discounted cash flow analyses. The estimates are based on the following key valuation assumptions - collateral cash flows, prepayment assumptions, default rates, loss severity, liquidation lag, bond waterfall and internal rate of return. Since there is currently no active secondary market for these types of securities due to the non-traditional loan types supporting the securities, these valuations are considered Level 3 inputs as defined in Note 5 - Fair Value Measurement. Additional securities may be analyzed in the future if deemed necessary to determine whether they are OTTI and if so, if any possible credit loss exists.

Two of the three securities supported by non-traditional loan types were previously found to have credit losses since a portion of the unrealized losses is due to an expected cash flow shortfall. As such, these securities were determined to be OTTI. DBI does not intend to sell the investments and it is not more likely than not that DBI will be required to sell the securities before the anticipated recovery of their remaining amortized cost bases, which may be maturity. The analysis on the third security did not reveal any credit loss nor was the security found to be OTTI. The total credit loss that was recognized in earnings through December 31, ~~2010~~2011 was $0.46 million. The analysis performed as of ~~September~~March 3031, ~~2011~~2012 resulted in an additional $4532,~~487~~875 of credit loss that was recorded through the income statement during the current period, ~~for a total credit loss year-to-date of $150,314~~ on ~~one of~~ the two OTTI securities. Unrealized losses on the three securities analyzed by the third party were recognized through accumulated other comprehensive loss on the balance sheet as of ~~September~~March 3031, ~~2011~~2012, net of tax, in the amount of $1.32 million.

The unrealized losses on the remainder of the residential ~~mortgage-backed~~MBS ~~securities~~ are due to the distressed and illiquid markets for collateralized mortgage obligations. The securities are investments in senior tranches with adequate credit support from subordinate tranches, are supported by traditional mortgage loans that originated between 2002 and 2005, have low delinquency and foreclosure rates, and reasonable loan-to-value ratios. DBI does not consider these investments to be OTTI at ~~September~~March 3031, ~~2011~~2012.

Changes in credit losses recognized for securities with OTTI were as follows:

	For the Nine Months Ended		For the Year Ended
	For the Three Months Ended		For the Year Ended
	September 30,		December 31,
	March 31,		December 31,
	2011	2010	2010
	2012	2011	2011
Credit losses recognized in earnings, beginning of period	($~~432~~637,~~488~~245)	($~~312~~432,~~716~~488)	($~~312~~432,~~716~~488)
Credit losses for OTTI not previously recognized	(~~150~~32,~~314~~875)	(924,~~902~~474)	(~~119~~204,~~772~~757)
Credit losses recognized in earnings, end of period	($~~582~~670,~~802~~120)	($~~322~~456,~~618~~962)	($~~432~~637,~~488~~245)

NOTE 3 - LOANS

Loans are reported at the principal amount outstanding, net of the allowance for credit losses. Interest on loans is calculated and accrued by using the simple interest method on the daily balance of the principal amount outstanding. Loan origination fees are credited to income when received and the related loan origination costs are expensed as incurred. Capitalization of the fees net of the related costs would not have a material effect on the consolidated financial statements.

DBI's customer information system tracks the past due status of all loans beginning with the first day a payment is late. On a weekly basis, lenders are given a report with all loans past due one day or more to allow them to actively monitor the portfolio and attempt to keep past due levels to a minimum.

All loans are given an internal risk rating when the loan is originated. On a quarterly basis, risk rating reports are distributed to the lenders to ensure that loans are appropriately rated. On an annual basis, all commercial loans over $100,000 and agricultural loans over $200,000 are reviewed by the loan officer and/or credit analyst. All loans over $1 million are independently reviewed annually by the Chief Credit Officer. An independent third party also performs periodic reviews of risk ratings to ensure that loans are accurately graded. The internal risk ratings are defined as:

Non-classified loans

Special mention loans

Substandard loans

Doubtful loans

Loss loans

DBI's policy is to place into nonaccrual status all loans that are contractually past due 90 days or more, along with other loans as to which reasonable doubt exists to the full and timely collection of principal and/or interest based on management's view of the financial condition of the borrower. When a loan is placed on nonaccrual, all interest previously accrued but not collected is reversed against current period interest income. Income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is probable. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest.

Loan charge-offs for all loans will occur as soon as there is a reasonable probability of loss. When the amount of the loss can be readily calculated, the charge-off will be recorded as soon as practical within the calendar quarter the loss was identified. Loans that are partially charged-off will be placed in nonaccrual status unless the remaining loan is restructured with adequate collateral and payments are assured and current.

A loan is impaired when, based on current information and events, it is probable that not all amounts due will be collected according to the contractual terms of the loan agreement. Interest income is recognized in the same manner described above for nonaccrual loans. Further detail on the analysis of impaired loans can be found below in the discussion of the Allowance for Loan Losses, below.

Allowance for Loan Losses

The allowance for loan losses is an estimate of the losses that have been incurred in the loan portfolio. The allowance is based on two basic accounting principles: (1) FASB Accounting Standards Codification (ASC) Topic 310-10 "Receivables - Overall," (formerly FAS 114), which requires that losses be accrued when it is probable that DBI will not collect all principal and interest payments according to the loan's contractual terms, and, (2) FASB ASC Topic 450, "Contingencies," (formerly FAS 5), which requires that losses be accrued when they are probable of occurring and estimable. The FFIEC "Interagency Policy Statement on the Allowance for Loan and Lease Losses" provides additional guidance on the allowance methodology.

On a quarterly basis, management utilizes a systematic methodology to determine an appropriate allowance for loan losses. This methodology includes a loan grading system that requires quarterly reviews; identification of loans to be evaluated on an individual basis for impairment; results of independent reviews of asset quality and the adequacy of the allowance by regulatory agencies; consideration of current trends and volumes of nonperforming, past-due, nonaccrual and potential problem loans; as well as national and local economic trends and industry conditions.

In applying the methodology, all troubled debt restructurings, regardless of size, are considered impaired and will be individually evaluated. All nonaccrual and watchlist commercial real estate, construction and land development, agricultural real estate, multifamily residential real estate, commercial, and agricultural production loans over $50,000 are evaluated individually to determine if they are impaired. Nonaccrual residential real estate or consumer loans that are larger than customary for DBI will also be considered impaired and evaluated individually as there would be no pool of similar loans to evaluate these loans under ASC Topic 450. Impaired loans are measured at the estimated fair value of the collateral. If the estimated fair value of the impaired loan is less than the recorded investment in the loan, an impairment is recognized by creating a valuation allowance in conjunction with ASC Topic 310-10.

Loans that are not impaired are segmented into groups by type of loan. The following loan types are utilized so each segment of loans will have similar risk factors: (1) residential real estate, (2) agricultural real estate, (3) commercial real estate, (4) construction and land development, (5) commercial, (6) agricultural, (7) consumer, (8) guaranteed loans and (9) other. These loans are further segmented by internal risk ratings of non-classified, special mention, substandard and doubtful, which are defined above.

Risk factor percentages are applied to the risk rating segments of the non-impaired loans to calculate an allowance allocation in conjunction with ASC Topic 450. The risk factor percentages are based on historical loan loss experience for each loan type and are adjusted for current economic conditions and trends as well as internal loan quality trends. The historical loan loss percentages are applied to the non-classified portion of the portfolio to determine the required allocation to the allowance. The historical loan loss percentages are then multiplied by a factor based on current economic conditions to calculate the allocation for each of the remaining risk rating categories of the non-impaired loans. The current economic conditions take into account items such as vacancy rates for rental properties; property values based on actual sales transactions; income projections based on current prices such as dairy commodities; and other available economic data.

The above steps result in calculations that estimate the credit losses inherent in the portfolio at that time. The calculations are used to confirm the adequacy and appropriateness of the actual balance of the allowance, recognizing that the allowance represents an aggregation of judgments and estimates by management. Such calculations will influence the amount of future provisions for loan losses charged to expense.

The calculation is submitted to DSB's Board of Directors quarterly along with a recommendation for the amount of the monthly provision to the allowance. If the mix and amount of future charge-offs differ significantly from those assumptions used by management in making its determination, the allowance and provision expense could be materially affected.

Major categories of loans included in the loan portfolio are as follows:

	September 30,	December 31,
	March 31,	December 31,
	2011	2010
	2012	2011
Real Estate:
Residential	$7572,~~384~~878,~~283~~120	$7772,~~983~~655,~~729~~569
Commercial	6061,~~419~~453,~~731~~156	5860,~~304~~864,~~345~~761
Agricultural	7678,~~892~~826,~~835~~886	7178,~~782~~767,~~458~~692
Construction	1311,~~144~~828,~~423~~100	1211,~~792~~655,~~496~~550
	225,841,272	220,863,028
	224,986,262	223,943,572
Commercial	3538,~~089~~992,~~797~~273	4235,~~427~~178,~~251~~049
Agricultural	2427,~~103~~361,~~536~~390	2427,~~725~~661,~~859~~420
Consumer and other	10,~~476~~266,~~248~~198	11,~~338~~049,~~866~~075
TOTAL	$~~295~~301,~~510~~606,~~853~~123	$~~299~~297,~~355~~832,~~004~~116

The following ~~tables~~table ~~show~~presents ~~the~~information ~~investment~~related into ~~impaired~~the ~~loans~~average recorded investment and ~~the~~interest ~~corresponding~~income ~~allowance~~recognized ~~for~~on ~~those~~impaired loans ~~along~~for ~~with~~ the ~~recognized~~three ~~interest~~months ~~income~~ended ~~associated~~March ~~with~~31, ~~impaired~~2012 ~~loans~~and March 31, 2011:

		Three months ended		Three months ended
		March 31, 2012		March 31, 2011
	$(000)s	Average	Interest	Average	Interest
		Recorded	Income	Recorded	Income
		Investment	Recognized	Investment	Recognized
*With no related allowance:*
Residential Real Estate		$1,601	$4	$930	$7
Commercial Real Estate		2,366	8	1,933	13
Construction & Land Dev		2,264	14	2,590	29
Agricultural Real Estate		0	0	0	0
Commercial		757	2	577	8
Agricultural		0	0	0	0
Consumer		0	0	0	0

*With a related allowance:*
Residential Real Estate		$1,042	$5	$979	$0
Commercial Real Estate		2,738	7	4,533	0
Construction & Land Dev		2,832	1	1,915	21
Agricultural Real Estate		0	0	0	0
Commercial		41	0	62	0
Agricultural		0	0	116	0
Consumer		143	0	149	0

*Total:*
Residential Real Estate		$2,643	$9	$1,909	$7
Commercial Real Estate		5,104	15	6,466	13
Construction & Land Dev		5,096	15	4,505	50
Agricultural Real Estate		0	0	0	0
Commercial		798	2	639	8
Agricultural		0	0	116	0
Consumer		143	0	149	0
	Total	$13,784	$41	$13,784	$78

The following tables show the investment in impaired loans and the corresponding allowance for those loans as of March 31, 2012 and December 31, 2011:

Impaired Loans

As of September 30, 2011 and 2010

	$(000)s		Unpaid
		Recorded	Principal	Related
March 31, 2012		Investment	Balance	Allowance
*With no related allowance:*
Residential Real Estate		$1,456	$1,594	$0
Commercial Real Estate		2,085	2,359	0
Construction & Land Dev		2,238	2,238	0
Agricultural Real Estate		0	0	0
Commercial		748	795	0
Agricultural		0	0	0
Consumer		0	0	0

*With a related allowance:*
Residential Real Estate		$945	$1,040	$150
Commercial Real Estate		2,585	2,730	697
Construction & Land Dev		2,831	2,831	579
Agricultural Real Estate		0	0	0
Commercial		37	41	14
Agricultural		0	0	0
Consumer		140	142	127

*Total:*
Residential Real Estate		$2,401	$2,634	$150
Commercial Real Estate		4,670	5,089	697
Construction & Land Dev		5,069	5,069	579
Agricultural Real Estate		0	0	0
Commercial		785	836	14
Agricultural		0	0	0
Consumer		140	142	127
	Total	$13,065	$13,770	$1,567

	$(000)s		Unpaid		~~Average~~	~~Interest~~
		Recorded	Principal	Related	~~Recorded~~	~~Income~~
2011		Investment	Balance	Allowance	Investment	Recognized
December 31, 2011		Investment	Balance	Allowance
With no related allowance:
Residential Real Estate		$~~577~~805	$~~577~~841	$0	~~$579~~	~~$10~~
Commercial Real Estate		1,~~847~~433	21,~~037~~698	0	~~2,054~~	28
Construction & Land Dev		2,~~936~~658	2,~~936~~658	0	~~2,941~~	80
Agricultural Real Estate		0	0	0	0	0
Commercial		~~984~~890	~~1,218~~935	0	~~1,228~~	10
Agricultural		0	0	0	0	0
Consumer		43	43	0	44	1
With a related allowance:
Residential Real Estate		$1,~~055~~190	$1,~~101~~392	$~~230~~171	~~$1,088~~	$2
Commercial Real Estate		2,~~644~~482	2,~~848~~615	~~693~~721	~~2,964~~	~~(6)~~
Construction & Land Dev		2,~~833~~832	2,~~833~~832	~~478~~580	~~2,835~~	60
Agricultural Real Estate		~~246~~0	~~246~~0	400	~~246~~	2
Commercial		9938	9941	5214	~~103~~	2
Agricultural		0	0	0	0	0
Consumer		~~146~~142	~~146~~144	~~131~~129	~~148~~	0
Total:
Residential Real Estate		$1,~~632~~995	$12,~~678~~233	$~~230~~171	~~$1,667~~	~~$12~~
Commercial Real Estate		43,~~491~~915	4,~~885~~313	~~693~~721	~~5,018~~	22
Construction & Land Dev		5,~~769~~490	5,~~769~~490	~~478~~580	~~5,776~~	~~140~~
Agricultural Real Estate		~~246~~0	~~246~~0	400	~~246~~	2
Commercial		~~1,083~~928	~~1,317~~976	5214	~~1,331~~	12
Agricultural		0	0	0	0	0
Consumer		~~189~~185	~~189~~187	~~131~~129	~~192~~	1
	Total	$1312,~~410~~513	$1413,~~084~~199	$1,~~624~~615	~~$14,230~~	~~$189~~

$(000)s Unpaid Average Interest
Recorded Principal Related Recorded Income
2010 Investment Balance Allowance Investment Recognized
With no related allowance:
Residential Real Estate $572 $667 $0 $504 $6
Commercial Real Estate 1,295 2,169 0 1,070 54
Construction & Land Dev 0 0 0 0 40
Agricultural Real Estate 0 0 0 0 0
Commercial 557 752 0 324 1
Agricultural 116 116 0 113 (2)
Consumer 0 0 0 0 1
With a related allowance:
Residential Real Estate $655 $655 $201 $595 $28
Commercial Real Estate 2,322 2,906 373 2,211 43
Construction & Land Dev 438 438 173 408 15
Agricultural Real Estate 0 0 0 0 0
Commercial 850 919 220 240 4
Agricultural 732 732 205 81 0
Consumer 152 152 138 17 0
Total:
Residential Real Estate $1,227 $1,322 $201 $1,099 $34
Commercial Real Estate 3,617 5,075 373 3,281 97
Construction & Land Dev 438 438 173 408 55
Agricultural Real Estate 0 0 0 0 0
Commercial 1,407 1,671 220 564 5
Agricultural 848 848 205 194 (2)
Consumer 152 152 138 17 1
Total $7,689 $9,506 $1,310 $5,563 $190
Recorded Investment in Financing Receivables

September 30,

March 31,

2011

2010

December 31, 2010

2012

2011

December 31, 2011

Ending Balance

Individually

$(000)s

Ending

Evaluated

Ending

Evaluated

Ending

Evaluated

Balance

for Impairment

Balance

for Impairment

Balance

for Impairment

Residential Real Estate

$7572,~~384~~878

$12,~~632~~401

$7976,~~980~~730

$1,~~227~~646

$7772,~~984~~656

$1,~~785~~995

Commercial Real Estate

6061,~~420~~453

4,~~491~~670

6558,~~351~~665

36,~~617~~321

5860,~~304~~865

53,~~768~~915

Construction & Land Dev

1311,~~144~~828

5,~~769~~069

1412,~~338~~899

~~438~~4,497

1211,~~793~~655

45,~~326~~490

Agricultural Real Estate

7678,~~893~~827

~~246~~0

6369,~~526~~909

7178,~~782~~768

Commercial

3538,~~090~~992

~~1,083~~785

3345,~~346~~591

~~1,407~~665

4235,~~427~~178

~~285~~928

Agricultural

2427,~~104~~362

3225,~~911~~383

~~848~~116

2427,~~726~~661

~~116~~0

Consumer

10,~~476~~266

~~189~~140

1110,~~214~~362

~~152~~148

11,~~339~~049

~~150~~185

Unallocated

Total

$~~295~~301,~~511~~606

$13,~~410~~065

$~~300~~299,~~666~~539

$713,~~689~~393

$~~299~~297,~~355~~832

$12,~~430~~513

Allowance for Loan Losses

For the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011

$(000)s

Ending Balance

Beginning

Ending

Individually

Balance

Evaluated ~~for~~

2011

1/1/2011

Charge-offs

Recoveries

Provision

9/30/2011

Impairment

2012

1/1/2012

Charge-offs

Recoveries

Provision

3/31/2012

for Impairment

Residential Real Estate

$1,~~429~~132

($50134)

$~~124~~4

($~~125)~~187

$1,~~378~~189

$~~230~~150

Commercial Real Estate

2,~~849~~858

~~(461)~~0

~~174~~(8)

2,~~568~~853

~~693~~697

Construction & Land Dev

~~880~~1,163

~~(225)~~0

250

~~459~~54

1,~~139~~217

~~478~~579

Agricultural Real Estate

~~204~~198

483

~~252~~201

400

Commercial

~~278~~202

~~(252)~~0

406

~~173~~21

~~239~~229

5214

Agricultural

~~347~~263

(~~131~~8)

~~223~~255

Consumer

~~160~~150

(156)

~~153~~146

~~131~~127

Unallocated

~~718~~612

(~~152~~99)

~~566~~513

Total

$6,~~865~~578

($~~1,003~~140)

$~~206~~15

$~~450~~150

$6,~~518~~603

$1,~~624~~567

Ending Balance

$(000)s

Beginning

Ending

Individually

Balance

Evaluated ~~for~~

2010

1/1/2010

Charge-offs

Recoveries

Provision

9/30/2010

Impairment

2011

1/1/2011

Charge-offs

Recoveries

Provision

3/31/2011

for Impairment

Residential Real Estate

$1,~~748~~429

($~~316~~29)

$326

($~~215~~10)

$1,~~249~~396

$~~201~~171

Commercial Real Estate

2,~~221~~849

~~(367)~~0

~~107~~271

13,~~970~~122

~~373~~1,132

Construction & Land Dev

~~1,319~~880

0(65)

~~298~~39

~~1,617~~854

~~173~~41

Agricultural Real Estate

67204

160

84(9)

~~167~~195

Commercial

~~310~~278

(60225)

4111

~~221~~242

~~512~~306

~~220~~26

Agricultural

~~150~~347

~~356~~(115)

~~512~~234

~~205~~97

Consumer

59160

(621)

131

~~147~~(3)

157

~~138~~135

Unallocated

~~352~~718

42(265)

~~394~~453

Total

$6,~~226~~865

($~~805~~320)

$~~117~~22

$~~1,040~~150

$6,~~578~~717

$1,~~310~~602

Nonaccrual loans totaled $89.21 million and $8.67 million at ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011, respectively. There were no loans past due ninety days or more and still accruing. A schedule of loans by the number of days past due (including nonaccrual loans) along with a schedule of credit quality indicators follows:

Age Analysis of Past Due Financing Receivables

		30-89 Days	90 Days	Total		Total Financing
	$(000)s	Past Due	& Over	Past Due	Current	Receivables
	September 30, 2011
	March 31, 2012
Residential Real Estate		$1,~~208~~295	$~~438~~897	$12,~~646~~192	$7370,~~738~~686	$7572,~~384~~878
Commercial Real Estate		~~968~~389	21,~~867~~226	31,~~835~~615	5659,~~585~~838	6061,~~420~~453
Construction & Land Dev		014	1,~~724~~023	1,~~724~~037	1110,~~420~~791	1311,~~144~~828
Agricultural Real Estate		~~116~~0	~~246~~0	~~362~~0	7678,~~531~~827	7678,~~893~~827
Commercial		~~374~~393	~~226~~317	~~600~~710	3438,~~490~~282	3538,~~090~~992
Agricultural		10	0	10	2427,~~103~~362	2427,~~104~~362
Consumer		3828	8436	~~122~~64	10,~~354~~202	10,~~476~~266
	Total	$2,~~705~~119	$53,~~585~~499	$85,~~290~~618	$~~287~~295,~~221~~988	$~~295~~301,~~511~~606

		30-89 Days	90 Days	Total		Total Financing
	$(000)s	Past Due	& Over	Past Due	Current	Receivables
	December 31, 2010
	December 31, 2011
Residential Real Estate		$~~376~~1,319	$~~396~~866	$~~772~~2,185	$7770,~~212~~471	$7772,~~984~~656
Commercial Real Estate		01,103	41,~~220~~074	42,~~220~~177	5458,~~084~~688	5860,~~304~~865
Construction & Land Dev		0	~~402~~1,452	~~402~~1,452	1210,~~391~~203	1211,~~793~~655
Agricultural Real Estate		0	0	0	7178,~~782~~768	7178,~~782~~768
Commercial		4185	61200	65385	4234,~~362~~793	4235,~~427~~178
Agricultural		0	~~116~~0	~~116~~0	2427,~~610~~661	2427,~~726~~661
Consumer		7463	3081	~~104~~144	1110,~~235~~905	11,~~339~~049
	Total	$~~454~~2,670	$53,~~225~~673	$56,~~679~~343	$~~293~~291,~~676~~489	$~~299~~297,~~355~~832

Credit Quality Indicators

	$(000)s		Special
	September 30, 2011	Non-Classified	Special Mention	Substandard	Doubtful	Total
	March 31, 2012	Non-Classified	Mention	Substandard	Doubtful	Total
Residential Real Estate		$6159,~~524~~803	$65,~~807~~608	$65,~~230~~330	$~~823~~2,137	$7572,~~384~~878
Commercial Real Estate		4948,~~030~~687	34,~~452~~944	4,~~642~~463	3,~~296~~359	6061,~~420~~453
Construction & Land Dev		5,~~990~~128	~~803~~1,058	62,~~351~~999	02,643	1311,~~144~~828
Agricultural Real Estate		6871,~~207~~002	87,~~440~~825	~~246~~0	0	7678,~~893~~827
Commercial		3236,~~258~~597	~~1,213~~994	1,~~436~~214	~~183~~187	3538,~~090~~992
Agricultural		2023,~~057~~821	43,~~047~~541	0	0	2427,~~104~~362
Consumer		109,~~156~~979	4286	~~128~~38	~~150~~163	10,~~476~~266
Total		$~~247~~255,~~222~~017	$24,~~804~~056	$1914,~~033~~044	$48,~~452~~489	$~~295~~301,~~511~~606
	$(000)s		Special
	December 31, 2010	Non-Classified	Special Mention	Substandard	Doubtful	Total
	December 31, 2011	Non-Classified	Mention	Substandard	Doubtful	Total
Residential Real Estate		$6258,~~133~~960	$76,~~782~~277	$6,~~903~~501	$~~1,166~~918	$7772,~~984~~656
Commercial Real Estate		4249,~~362~~547	73,~~249~~668	34,~~163~~787	52,~~530~~863	5860,~~304~~865
Construction & Land Dev		4,~~311~~691	~~3,289~~898	4,~~791~~154	~~402~~1,912	1211,~~793~~655
Agricultural Real Estate		6670,~~103~~412	58,~~630~~356	490	0	7178,~~782~~768
Commercial		3832,~~383~~600	21,~~953~~250	~~870~~1,164	~~221~~164	4235,~~427~~178
Agricultural		2223,~~283~~779	23,~~320~~882	70	~~116~~0	2427,~~726~~661
Consumer		10,~~929~~678	~~113~~102	~~142~~127	~~155~~142	11,~~339~~049
Total		$~~246~~250,~~504~~667	$2924,~~336~~433	$1516,~~925~~733	$75,~~590~~999	$~~299~~297,~~355~~832

Modifications

As of ~~September~~March 3031, ~~2011~~2012

			Pre-Modification	Post-Modification	Recorded	Impact to
	$(000)s	Number of	Recorded	Recorded	Investment	Allowance ~~for~~
		Contracts	Investment	Investment	as of 9/30/2011	for Credit Losses
Residential Real Estate		43	$~~662~~177	$~~662~~177	$~~680~~177	$151
Commercial Real Estate		4	1,470	1,468	1,266	178
Construction & Land Dev		2	156	156	154	48
Commercial		4	754	529	526	0
Total		14	$3,042	$2,815	$2,626	$377

Since December 31, ~~2010~~2011 ~~two~~there were no loans that were modified as troubled debt restructurings that subsequently defaulted. ~~One~~ loan had an active outstanding balance of $34,791 and was secured by residential real estate. This default resulted in a nominal charge-off against the allowance for credit losses of $2,391. The second loan secured by non-owner occupied commercial real estate and had an active principal balance of $0.6 million. The default on this loan did not have any impact on DBI's allowance for credit losses.

NOTE 4 - NEW ACCOUNTING PRONOUNCEMENTS

In April 2011, FASB issued ~~Accounting Standards Update ("~~ASU") No. 2011-0203 AReconsideration ~~Creditor's Determination~~ of ~~Whether~~Effective aControl ~~Restructuring~~for IsRepurchase ~~a Troubled Debt Restructuring ("TDR")~~Agreements. This update to Topic ~~310~~860, "~~Receivables~~Transfers and Servicing," ~~provides~~modifies ~~guidance~~the criteria for ~~evaluating~~determining ~~whether~~when repurchase agreements would be accounted for as a ~~restructuring~~secured ~~constitutes~~borrowing rather than a ~~TDR~~sale. The provisions of ASU ~~indicates~~No. ~~that~~2011-03 remove from the ~~creditor's~~assessment ~~evaluation~~of ~~must~~effective ~~separately~~control ~~conclude~~the ~~that~~criterion ~~both~~requiring the ~~following~~transferor ~~exist:~~to ~~(a)~~have the ~~restructuring~~ability ~~constitutes~~to arepurchase ~~concession;~~or ~~and~~redeem ~~(b)~~the financial assets on substantially the ~~debtor~~agreed isterms, ~~experiencing~~even ~~financial~~in ~~difficulties. The~~the ~~amendments~~event ~~also~~of ~~further~~default ~~clarify~~by the transferee and the collateral maintenance implementation guidance onrelated ato ~~creditor's~~that ~~evaluation~~criterion. This ofupdate ~~whether~~does anot ~~concession~~change ~~has~~the ~~been~~other ~~granted~~existing ~~and~~criteria ~~whether~~used ain ~~debtor~~the isassessment ~~experiencing~~of ~~financial~~effective ~~difficulties~~control. ~~The~~ASU ~~amendments~~No. in2011-03 ~~this~~is ~~update are~~ effective prospectively for ~~the~~transactions, ~~first~~or ~~interim~~modifications orof ~~annual~~existing ~~period~~transactions, ~~beginning~~that occur on or after ~~June~~January 151, ~~2011~~2012. ~~Adoption~~These ~~of these~~ amendments did not have aany ~~significant~~ impact on DBI's financial statements.

In ~~April~~May 2011, FASB issued ASU No. 2011-0304 ~~Reconsideration~~Amendments ofto ~~Effective~~Achieve ~~Control~~Common ~~for~~Fair ~~Repurchase~~Value ~~Agreements~~Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ~~This~~These ~~update~~amendments to Topic ~~860~~820, "~~Transfers~~Fair ~~and~~Value ~~Servicing~~Measurement," ~~modifies~~result ~~the~~in ~~criteria~~common ~~for~~fair ~~determining~~value ~~when~~measurement ~~repurchase~~and ~~agreements~~disclosure ~~would~~requirements bein ~~accounted~~U.S. ~~for~~GAAP and International Financial Reporting Standards ("IFRS"). The changes to U.S. GAAP as a ~~secured~~result ~~borrowing~~of ~~rather~~ASU ~~than~~No. 2011-04 are as follows; (a) ~~sale~~the concepts of highest and best use and valuation premise are only relevant when measuring the fair value of nonfinancial assets; (b) U. ~~The~~S. ~~provisions~~GAAP currently prohibits application of a blockage factor in valuing financial instruments with quoted prices in active markets, however ASU No. 2011-0304 ~~remove~~extends ~~from~~that prohibition to all fair value measurements; (c) an exception is provided to the ~~assessment~~basic fair value measurement principles for an entity that holds a group of ~~effective~~financial ~~control~~assets and financial liabilities with offsetting positions in market risks or counterparty credit risk that are managed on the ~~criterion~~basis ~~requiring~~of the ~~transferor~~entity's net exposure to ~~have~~either of those risks which allows the ~~ability~~entity, if certain criteria are met, to ~~repurchase~~measure the fair value of the net asset or ~~redeem~~liability position in a manner consistent with how market participants would price the ~~financial~~net ~~assets~~risk onposition; ~~substantially~~(d) aligns the ~~agreed~~fair ~~terms~~value measurement of instruments classified within an entity's shareholders' equity with the guidance for liabilities; and (e) disclosure requirements have been enhanced for recurring Level 3 fair value measurements to disclose quantitative information about unobservable inputs and assumptions used, ~~even~~to indescribe the ~~event~~valuation ofprocesses ~~default~~used by the ~~transferee~~entity, and to describe the ~~collateral~~sensitivity ~~maintenance~~of ~~implementation~~fair ~~guidance~~value ~~related~~measurements to ~~that~~changes ~~criterion~~in unobservable inputs and interrelationships between those inputs. ~~This~~In ~~update~~addition, ~~does~~entities ~~not~~must ~~change~~report the ~~other~~level ~~existing~~in ~~criteria~~the ~~used~~fair value hierarchy of items that are not measured at fair value in the ~~assessment~~statement of ~~effective~~condition ~~control~~but whose fair value must be disclosed. The provisions of ASU No. 2011-0304 isare effective ~~prospectively~~ for ~~transactions,~~interim orreporting ~~modifications~~periods ofbeginning ~~existing transactions, that occur~~ on or after ~~January~~December 115, ~~2012~~2011. ~~These~~The ~~amendments~~adoption ~~will~~of ASU No. 2011-04 did not have ~~any~~a material impact on DBI's financial statements.

In ~~May~~June 2011, FASB issued ASU No. 2011-0405, ~~Amendments~~Presentation toof ~~Achieve~~Comprehensive ~~Common Fair Value Measurement and Disclosure Requirements in U~~Income.~~S. GAAP and IFRSs.~~ ~~These~~This ~~amendments~~update to Topic ~~820~~220, "~~Fair~~Comprehensive ~~Value Measurement~~Income," ~~result~~allows inan ~~common~~entity ~~fair~~the ~~value~~option ~~measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards ("IFRS"). The changes~~ to ~~U.S.~~present ~~GAAP~~the astotal ~~a result~~ of ~~ASU~~comprehensive ~~No.~~income, ~~2011-04 are as follows; (a)~~ the ~~concepts~~components of ~~highest~~net ~~and~~income ~~best use~~ and ~~valuation premise are only relevant when measuring~~ the ~~fair~~components ~~value~~ of ~~nonfinancial~~other ~~assets;~~comprehensive ~~(b)~~income ~~U.S.~~either ~~GAAP~~in ~~currently prohibits application of~~ a ~~blockage~~single ~~factor~~continuous instatement ~~valuing~~of ~~financial~~comprehensive ~~instruments~~income ~~with~~or ~~quoted prices~~ in ~~active~~two ~~markets,~~separate ~~however~~but ~~ASU~~consecutive Nostatements. In ~~2011-04~~both ~~extends~~choices, ~~that prohibition to all fair value measurements; (c)~~ an ~~exception~~entity is ~~provided~~required to ~~the~~present ~~basic~~each ~~fair~~component ~~value measurement principles for an entity that holds a group~~ of ~~financial~~net ~~assets~~income ~~and~~along ~~financial liabilities~~ with ~~offsetting~~total ~~positions in market risks or counterparty credit risk that are managed on the basis of the entity's~~ net ~~exposure~~income, toeach ~~either~~component of ~~those~~other ~~risks~~comprehensive ~~which~~income ~~allows~~along ~~the~~with ~~entity,~~a iftotal ~~certain~~for ~~criteria~~other ~~are~~comprehensive ~~met~~income, toand ~~measure the fair value of the net asset or liability position in~~ a ~~manner~~total ~~consistent~~amount ~~with~~for ~~how~~comprehensive ~~market~~income. The ~~participants would price the net risk position;~~ statement(ds) ~~aligns~~are ~~the~~required ~~fair~~to ~~value~~be ~~measurement~~presented ofwith ~~instruments~~equal ~~classified~~prominence ~~within~~as ~~an entity's shareholders' equity with~~ the ~~guidance~~other ~~for~~primary ~~liabilities;~~financial ~~and~~statements. ASU ~~(e)~~No. ~~disclosure~~2011-05 ~~requirements~~eliminates ~~have~~the ~~been~~option ~~enhanced for recurring Level 3 fair value measurements~~ to ~~disclose~~present ~~quantitative information about unobservable inputs and assumptions used, to describe~~ the ~~valuation~~components ~~processes~~of ~~used~~other bycomprehensive ~~the~~income ~~entity,~~as ~~and~~part toof ~~describe~~ the ~~sensitivity~~statement of ~~fair value measurements to~~ changes in ~~unobservable~~shareholders' ~~inputs~~equity ~~and~~but ~~interrelationships~~does ~~between~~not ~~those~~change ~~inputs. In~~the ~~addition,~~items ~~entities~~that must ~~report~~be ~~the~~reported ~~level~~ in ~~the~~other ~~fair~~comprehensive ~~value~~income ~~hierarchy~~or ofwhen ~~items~~an ~~that~~item ~~are not measured at fair value in the statement~~ of ~~condition~~other ~~but~~comprehensive ~~whose fair value~~ must be ~~disclosed. The~~reclassified ~~provisions~~to ofnet income. ASU No. 2011-0405 ~~are~~is effective for interim reporting periods beginning on or after December 15, 2011, with retrospective application required. The adoption of ASU No. 2011-0405 ischanged ~~not~~the ~~expected~~presentation toof ~~have~~DBI's income statement and the addition of a ~~material~~statement of other comprehensive income. The adoption did not have any impact on DBI's statement of financial ~~statements~~condition.

In ~~June~~September 2011, FASB ~~issued~~issues ASU No. 2011-0508, ~~Presentation~~Testing ofGoodwill ~~Comprehensive~~for ~~Income~~Impairment. This update to Topic ~~220~~350, "~~Comprehensive~~Intangibles ~~Income~~- Goodwill and Other," ~~allows~~permits an entity ~~the~~to ~~option~~first toassess ~~present~~qualitative ~~the~~factors ~~total~~to ofdetermine ~~comprehensive~~whether ~~income,~~it ~~the~~is ~~components~~more oflikely ~~net~~than ~~income~~not ~~and~~that the ~~components~~fair value of ~~other~~a ~~comprehensive~~reporting ~~income~~unit ~~either~~is inless than its carrying amount as a ~~single~~basis ~~continuous~~for ~~statement~~determining ofwhether ~~comprehensive~~it ~~income~~is ornecessary into perform the two-step ~~separate~~goodwill ~~but~~impairment ~~consecutive~~test ~~statements~~described in Topic 350. InThe ~~both~~more-likely-than-not ~~choices,~~threshold anis ~~entity~~defined isas having a likelihood of more than 50 percent. Previous guidance under Topic 350 required an entity to ~~present~~test ~~each~~goodwill ~~component~~for ofimpairment ~~net~~on ~~income~~at ~~along~~least ~~with~~an ~~total~~annual ~~net~~basis ~~income,~~by ~~each~~comparing ~~component~~the offair ~~other~~value ~~comprehensive~~of ~~income~~a ~~along~~reporting unit with aits ~~total~~carrying ~~for~~amount ~~other~~(step ~~comprehensive~~one). If ~~income,~~the ~~and~~fair value of a ~~total~~reporting unit is less than its carrying amount, ~~for~~then ~~comprehensive~~the ~~income. The~~second ~~statement(s)~~step ~~are~~of ~~required~~the totest must be ~~presented~~performed ~~with~~to ~~equal~~measure ~~prominence~~the asamount of the ~~other~~impairment ~~primary~~loss, ~~financial~~if ~~statements~~any. ~~ASU~~Under ~~No.~~the ~~2011-05~~amendments ~~eliminates~~of ~~the~~this ~~option~~update, toan ~~present~~entity ~~the~~is ~~components~~not ofrequired ~~other~~to ~~comprehensive~~calculate ~~income~~the asfair ~~part~~value of a reporting unit unless the ~~statement~~entity ofdetermines ~~changes~~that init ~~shareholders'~~is ~~equity~~more ~~but~~likely ~~does~~than not ~~change~~that ~~the~~its ~~items~~fair ~~that~~value ~~must~~is beless ~~reported~~than inits ~~other~~carrying ~~comprehensive~~amount. If ~~income~~after assessing the totality of events or ~~when~~circumstances, an ~~item~~entity ofdetermines ~~other~~it ~~comprehensive~~is ~~must~~not bemore ~~reclassified~~likely tothan ~~net~~not ~~income. ASU~~that ~~No.~~the ~~2011-05~~fair isvalue ~~effective~~of ~~for~~a ~~interim~~ reporting ~~periods~~unit ~~beginning~~is onless orthan ~~after~~its ~~December~~carrying 15amount, ~~2011,~~then ~~with~~performing ~~retrospective~~the ~~application~~two-step ~~required~~impairment test is unnecessary. ~~The~~An ~~adoption~~entity ofhas ~~ASU~~the ~~No.~~option ~~2011-05~~under isthis ~~expected~~update to ~~result~~bypass inthe ~~presentation~~qualitative ~~changes~~assessment tofor ~~DBI's~~any ~~income~~reporting ~~statement~~unit in any period and proceed directly to performing the ~~addition~~first step of athe ~~statement~~two-step ofgoodwill ~~other~~impairment ~~comprehensive~~test. The ~~income~~amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption ~~will~~of ~~have~~ASU No. 2011-08 had no impact on DBI's ~~statement of~~ financial ~~condition~~statements.

In September 2011, FASB issues ASU No. 2011-08, Testing Goodwill for Impairment. This update to Topic 350, "Intangibles - Goodwill and Other," permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Previous guidance under Topic 350 required an entity to test goodwill for impairment on at least an annual basis by comparing the fair value of a reporting unit with its carrying amount (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any. Under the amendments of this update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. An entity has the option under this update to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of ASU No. 2011-08 will have no impact on DBI's financial statements.
NOTE 5 - FAIR VALUE MEASURMENT

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in a transaction between market participants on the measurement date. Some assets and liabilities are measured on a recurring basis while others are measured on a non-recurring basis, as required by U.S. GAAP, which also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. The three levels of inputs defined in the standard that may be used to measure fair value are as follows:

Level 1:

Level 2:

Level 3:

DBI used the following methods and significant assumptions to estimate fair value:

Cash, Cash Equivalents, and Federal Funds Sold:
For cash, cash equivalents and federal funds sold, the carrying amount is a reasonable estimate of fair value.

Investment Securities:
Investment securities available-for-sale ("AFS") are recorded at fair value on a recurring basis. The fair value measurement of most of DBI's AFS securities is currently determined by an independent provider using Level 2 inputs (except as noted below). The measurement is based upon quoted prices for similar assets, if available. If quoted prices are not available, fair values are measured using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curves, prepayment speed and default rates. Two of DBI's AFS MBS that are secured by non-traditional mortgage loans and one AFS MBS secured by traditional mortgage loans that was previously downgraded were analyzed by a third party in order to determine an estimated fair value. The estimated fair values were based on discounted cash flow analyses and are considered Level 3 inputs.

Refer to Note 2 - Investment Securities for additional detail on the assumptions used in determining the estimated fair values and additional disclosures regarding DBI's investment securities. For other securities held as investments, fair value equals quoted market price, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Loans Receivable:
The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Loans Held for Sale:
Mortgage loans held for sale are recorded at the lower of cost or market value. The fair value is based on a market commitment for the sale of the loan in the secondary market. These loans are typically sold within one week of funding. DBI classifies mortgage loans held for sale as nonrecurring Level 2 assets.

Impaired Loans:
As defined below in the Glossary of Loan Terms section, a loan is considered impaired when, based on current information or events, it is probable that not all amounts due will be collected according to the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral. The collateral value is determined based on appraisals and other market valuations for similar assets. Under FASB ASC Topic 820, "Fair Value Measurements and Disclosures," the fair value of impaired loans is reported before selling costs of the related collateral, while FASB ASC Topic 310, "Receivables," requires that impaired loans be reported on the balance sheet net of estimated selling costs. Therefore, significant estimated selling costs would result in the reported fair value of impaired loans being greater than the measurement value of impaired loans as maintained on the balance sheet. In most instances, selling costs were estimated for real estate-secured collateral and included broker commissions, legal and title transfer fees and closing costs. Impaired loans are classified as nonrecurring Level 2 assets.

Other Investments:
For other investments, the carrying amount is a reasonable estimate of fair value.

Other Real Estate Owned:
Real estate that DBI has taken control of in partial or full satisfaction of debt is valued at the lower of book value or fair value. The fair value is determined by analyzing the collateral value of the real estate using appraisals and other market valuations for similar assets less any estimated selling costs. The value carried on the balance sheet for other real estate owned is estimated fair value of the properties. Other real estate owned is classified as a nonrecurring Level 2 asset.

Bank Owned Life Insurance:
The carrying amount of bank owned life insurance approximates fair value.

Deposit Liabilities:
The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Borrowings:
Rates currently available to DSB for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.

Commitments to Extend Credit, Standby Letters of Credit and Financial Guarantees Written:
The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of guarantees and letters of credit is not material.

Assets Recorded at Fair Value on a Recurring Basis

Assets measured at fair value on a recurring basis, are summarized in the table below:

	September 30, 2011
	March 31, 2012
	Fair Value Measurements Using
Description	Level 1	Level 2	Level 3	Fair Value
U.S. Government-sponsored agencies	$0	$~~508~~5,~~550~~494,850	$0	$~~508~~5,~~550~~494,850
U.S. Government-sponsored agency MBS	0	3240,~~153~~198,~~403~~131	0	3240,~~153~~198,~~403~~131
State and local governments	0	2524,~~703~~995,~~232~~190	0	2524,~~703~~995,~~232~~190
Residential mortgage-backed securities	0	32,~~194~~199,~~843~~340	43,~~196~~899,~~672~~844	76,~~391~~099,~~515~~184
Total securities available for sale	$0	$6172,~~560~~887,~~028~~511	$43,~~196~~899,~~672~~844	$6576,~~756~~787,~~700~~355
	December 31, 2010
	December 31, 2011
	Fair Value Measurements Using
Description	Level 1	Level 2	Level 3	Fair Value
U.S. Government-sponsored agencies	$0	$03,517,050	$0	$03,517,050
U.S. Government-sponsored agency MBS	0	2132,~~065~~226,~~273~~529	0	2132,~~065~~226,~~273~~529
State and local governments	0	3025,~~906~~468,~~262~~499	0	3025,~~906~~468,~~262~~499
Residential mortgage-backed securities	0	52,~~812~~355,~~427~~680	54,~~265~~042,~~684~~935	116,~~078~~398,~~111~~615
Total securities available for sale	$0	$5763,~~783~~567,~~962~~758	$54,~~265~~042,~~684~~935	$6367,~~049~~610,~~646~~693

The table below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable (Level 3) for the quarter ended ~~September~~March 3031, ~~2011~~2012.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Available-
			for-Sale
			Securities
Beginning balance, January 1, 2011			$5,265,684
Beginning balance, January 1, 2012			$4,042,935
Total realized and unrealized gains/(losses):
Included in earnings			(~~150~~32,~~314~~875)
Included in other comprehensive income			~~(342~~59,~~915)~~484
Purchases, issuances, sales and settlements
Purchases			0
Issuances			0
Sales			0
Settlements			(~~575~~169,~~783~~700)
Transfers into Level 3			0
Transfers out of Level 3			0
Ending balance, September 30, 2011			$4,196,672
Ending balance, March 31, 2012			$3,899,844

Assets Recorded at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis, are summarized in the following table:

	September 30, 2011
	March 31, 2012
	Fair Value Measurements Using
Description	Level 1	Level 2	Level 3	Fair Value
Loans held for sale	$0	$1434,~~217,728~~875	$0	$1434,~~217,728~~875
Other real estate owned	0	1632,~~894,502~~355	0	1632,~~894,502~~355
Impaired loans	0	1314,~~569~~209,~~898~~623	0	1314,~~569~~209,~~898~~623
Total Assets	$0	$1615,~~682~~276,~~128~~853	$0	$1615,~~682~~276,~~128~~853
	December 31, 2010
	December 31, 2011
	Fair Value Measurements Using
Description	Level 1	Level 2	Level 3	Fair Value
Loans held for sale	$0	$3485,~~715,671~~926	$0	$3485,~~715,671~~926
Other real estate owned	0	~~863~~801,~~941~~689	0	~~863~~801,~~941~~689
Impaired loans	0	13,~~205~~260,~~125~~619	0	13,~~205~~260,~~125~~619
Total Assets	$0	$1714,~~784~~548,~~737~~234	$0	$1714,~~784~~548,~~737~~234

The table below summarizes fair value of financial assets and liabilities at ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011.

	September 30, 2011		December 31, 2010
	March 31, 2012		December 31, 2011
	Carrying	Fair	Carrying	Fair
	Amount	Value	Amount	Value
(In thousands)
Financial Assets
Cash and federal funds sold	$2927,~~181~~464	$2927,~~181~~464	$3542,~~239~~093	$3542,~~239~~093
Investment securities	6576,~~757~~787	6576,~~757~~787	6367,~~050~~611	6367,~~050~~611
Loans, net of allowance for credit losses	~~288~~295,~~992~~003	~~289~~294,~~820~~483	~~292~~291,~~491~~254	~~294~~291,~~838~~427
Loans held for sale	~~1,218~~435	~~1,218~~435	~~3,716~~486	~~3,716~~486
Bank owned life insurance	7,~~016~~150	7,~~016~~150	67,~~818~~083	67,~~818~~083
Other investments, at cost	53,~~586~~107	53,~~586~~107	4,~~609~~405	4,~~609~~405
TOTAL	$~~397~~409,~~750~~946	$~~398~~409,~~578~~426	$~~405~~412,~~923~~932	$~~408~~413,~~270~~105
Financial Liabilities
Deposits	$~~315~~324,~~232~~922	$~~316~~325,~~268~~980	$~~320~~327,~~499~~793	$~~321~~328,~~441~~864
Borrowings	39,~~759~~683	4241,~~568~~801	4340,~~588~~041	4441,~~605~~935
TOTAL	$~~354~~364,~~991~~605	$~~358~~367,~~836~~781	$~~364~~367,~~087~~834	$~~366~~370,~~046~~799

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Denmark Bancshares, Inc. and Subsidiaries
Selected Quarterly Financial Data
(Unaudited)
Financial Highlights
	3rd Qtr	2nd Qtr	1st Qtr	4th Qtr	3rd Qtr
	1st Qtr	4th Qtr	3rd Qtr	2nd Qtr	1st Qtr
(In thousands, except per share data)	~~2011~~2012	2011	2011	~~2010~~2011	~~2010~~2011
Operating Results
Interest income	$4,~~406~~305	$4,~~512~~340	$4,~~619~~406	$4,~~773~~512	$4,~~902~~619
Interest expense	~~1,003~~896	~~1,052~~946	1,~~103~~003	1,~~136~~052	1,~~230~~103
Net interest income	3,~~403~~409	3,~~460~~394	3,~~516~~403	3,~~637~~460	3,~~672~~516
Provision for credit losses	150	150	150	~~200~~150	~~310~~150
Noninterest income	~~484~~596	~~509~~539	~~491~~484	~~561~~509	~~532~~491
Noninterest expense	2,~~514~~572	2,~~487~~328	2,~~576~~514	2,~~759~~567	2,~~651~~576
Net income	~~848~~849	~~868~~982	~~913~~848	~~901~~868	~~906~~913
Per Share Data
Net income per share	$7.1314	$78.3026	$7.6813	$7.5830	$7.6168
Book value per share	$~~470~~479.8809	$~~462~~471.8911	$~~460~~470.2588	$~~453~~462.4789	$~~452~~460.1125
Financial Condition (1)
Total Loans	$~~295~~301,~~511~~606	$~~293~~297,~~855~~832	$~~299~~295,~~539~~511	$~~299~~293,~~355~~855	$~~300~~299,~~666~~539
Allowance for credit losses	6,~~518~~603	6,~~388~~578	6,~~717~~518	6,~~864~~388	6,~~578~~717
Investment securities	6576,~~757~~787	6867,~~547~~611	6365,~~934~~757	6368,~~050~~547	6463,~~548~~934
Assets	~~412~~422,~~560~~731	~~410~~425,~~023~~986	412,~~803~~560	~~420~~410,~~315~~023	~~399~~412,~~509~~803
Deposits	~~315~~324,~~232~~922	~~310~~327,~~210~~793	~~313~~315,~~393~~232	~~320~~310,~~499~~210	~~301~~313,~~723~~393
Other borrowed funds	39,~~759~~683	4240,~~609~~041	4339,~~363~~759	4342,~~588~~609	4243,~~475~~363
Stockholders' equity	5556,~~996~~804	5556,~~045~~023	5455,~~732~~996	5355,~~926~~045	5354,~~763~~732
Financial Ratios
Return on average equity	65.2099%	67.4114%	6.8620%	6.7841%	6.9586%
Return on average assets	0.8380%	0.8596%	0.8983%	0.9085%	0.9089%
Interest rate spread	3.2917%	3.3337%	3.4029%	3.6433%	3.7040%
Average equity to average assets	13.3739%	13.2223%	1213.9437%	13.2522%	12.94%
Allowance for credit losses
to total loans (1)	2.2119%	2.1721%	2.2421%	2.2917%	2.1924%
Non-performing loans to allowance for
credit losses (1)	~~125~~137%	~~112~~132%	~~117~~125%	~~126~~112%	~~137~~117%
(1) As of the period ending.

Forward Looking Statements

This report may contain certain forward-looking statements, including without limitation, statements regarding results of operations, the appropriateness of the allowance for loan losses, the amounts of charge-offs and recoveries, capital to asset ratios, capacity for paying dividends and liquidity. These statements speak of DBI's plans, goals, beliefs or expectations, and refer to estimates or use of similar terms. Forward-looking statements can generally be identified because they contain words and phrases such as "may," "project," "are confident," "should," "predict," "believe," "plan," "expect," "estimate," "anticipate," and similar expressions. These forward-looking statements are inherently uncertain and actual results may differ from DBI's expectations. The factors that, among others, could impact current and future performance include but are not limited to: (i) adverse changes in asset quality and resulting credit risk-related losses and expenses; (ii) adverse changes in the local economy; (iii) fluctuations in market rates and prices which can negatively affect net interest margin, asset valuations and expense expectations; (iv) changes in regulatory requirements of federal and state agencies applicable to banks and bank holding companies; and (v) the factors set forth in Item 1A of DBI's Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011 (the "~~2010~~2011 Annual Report"), which item is incorporated herein by reference, as well as other risks identified in this Report. When reviewing forward-looking statements to make decisions with respect to DBI, investors and others are cautioned to consider these and other risks and uncertainties. All forward-looking statements contained in this report are based upon information presently available and DBI assumes no obligation to update any forward-looking statements.

The Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") into law. This legislation makes extensive changes to the laws regulating financial services firms and requires significant rulemaking. In addition, the legislation mandates multiple studies, which could result in additional legislative or regulatory action. While the full effects of the legislation on DBI and DSB cannot yet be determined, this legislation is generally perceived as negatively impacting the banking industry. This legislation may result in higher compliance and other costs, reduced revenues and higher capital and liquidity requirements, among other things, which could adversely affect DBI's and DSB's business.

Critical Accounting Policies

The accounting and reporting policies of DBI are in accordance with accounting principles generally accepted in the United States of America and conform to general practices in the banking industry. The preparation of financial statements in conformity with these principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on information available at the date of the financial statements. Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Management believes that DBI's critical accounting policies are those relating to the allowance for loan and lease losses, the valuation of investment securities and intangible assets.

Allowance for Loan ~~and Lease~~ Losses

The allowance for loan and lease losses ("~~ALLL~~ALL") is an estimate of the losses that may be sustained in the loan ~~and lease~~ portfolio. Please refer to the Allowance for Loan Losses section of Note 3 - Loans above for detail on the allowance methodology. Management believes the ~~ALLL~~ALL is appropriate as of ~~September~~March 3031, ~~2011~~2012.

Valuation of Investment Securities

Investment securities are classified as available-for-sale and are valued at their fair market value. Please refer to Note 2 - Investment Securities and Note 5 - Fair Value Measurement for additional details on the valuation of investment securities.

~~Intangible~~Other ~~Assets~~Real Estate Owned

~~DBI~~Real ~~has~~estate athat ~~core~~DBI ~~deposit~~has ~~intangible~~taken ~~asset~~control ~~that~~of ~~was originated~~ in ~~connection~~partial ~~with~~or ~~DSB's~~full ~~expansion~~satisfaction ~~through acquisition~~ of andebt ~~established~~is ~~branch~~valued ~~operation~~at ~~in 1997. The acquisition did not meet~~ the ~~definition~~lower of abook ~~business~~value ~~combination~~or inmarket ~~accordance~~value. Please ~~with~~refer ~~ASC~~to ~~805~~Note 5 - ~~"Accounting~~Fair ~~for~~Value ~~Business~~Measurement ~~Combinations~~for ~~Occurring~~additional ininformation ~~Periods~~on ~~Beginning before December 15, 2008." As such, DBI continues to amortize~~ the ~~intangible~~accounting ~~asset~~polices related to the ~~acquisition~~valuation ~~over a period~~ of ~~fifteen~~other ~~years. Annually~~real ~~DBI~~estate ~~reviews the intangible assets for impairment and records an impairment charge, if any, to earnings~~owned.

Glossary of Loan Terms

Impaired Loan -
A loan is impaired when, based on current information and events, it is probable that not all amounts due will be collected according to the contractual terms of the loan agreement. Impaired loans are measured at the estimated fair value of the collateral. If the estimated fair value of the impaired loan is less than the recorded investment in the loan, an impairment is recognized by creating a valuation allowance.

Nonaccrual Loan -
DSB's policy is to place in nonaccrual status all loans which are contractually past due 90 days or more as to any payment of principal or interest and all other loans for which reasonable doubt exists as to the full, timely collection of interest or principal based on management's view of the financial condition of the borrower. When a loan is placed on nonaccrual, all interest previously accrued but not collected is reversed against current period interest income. Income on such loans is then recognized only to the extent that cash is received and where the collection of principal is probable. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest.

Non-Performing Assets -
Non-performing assets include nonaccrual loans as defined above and real and personal properties acquired in satisfaction of debts previously owed.

Past Due Accruing Loans -
A loan on which all or part of a scheduled payment is delinquent by more than 30 days but less than 90 days, except loans that are considered nonaccrual.

Potential Problem Loans -
Potential problem loans are accruing loans in which there exists doubt as to the ability of the borrower to comply with present loan repayment terms. Management's decision to place loans in this category does not necessarily mean that DBI expects losses to occur on these loans, but that management recognizes that a higher degree of risk is associated with these accruing loans and they deserve closer scrutiny.

Restructured Loans -
Restructured loans involve the granting of some concession to the borrower involving the modification of terms of the loan, such as changes in the payment schedule, the amortization term, the interest rate, or a combination of these.

Risk Rating -
Risk rating, which is also sometimes referred to as loan grade, is the credit quality grade assigned to each loan. Loans are assigned a risk rating upon origination. Lenders and credit review analysts conduct periodic reviews and evaluations and make adjustments to the assigned grades when appropriate. The range of categories from the best quality to the worst is as follows: highest quality, solid quality, some weakness, inherent industry weakness, special mention, substandard, doubtful and loss. Impaired loans are generally rated a substandard or lower risk rating.

Special Mention Loans -
Loans classified "special mention" are one step above substandard loans as described below. These loans contain some weaknesses, which if not corrected or improved upon could lead to further deterioration and a lower rating.

Substandard -
A "substandard" loan is a loan that is inadequately protected by the current net worth and paying capacity of the borrower or the value of the collateral. Loans classified "substandard" have well-defined weaknesses that jeopardize prospects for liquidation and are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected.

Results of Operations

Net income for the quarter ended ~~September~~March 3031, ~~2011~~2012, was $0.8 million, a decline of $~~57,674~~0.1 million or 67.40 % from $0.9 million for the corresponding period in ~~2010~~2011. This decrease was primarily the result of $0.31 million reduction in net interest income ~~partially offset by a reduction in the provision for loan losses of $0.2 million~~ from the same period during ~~2010~~2011.

~~Year-to-date~~Net ~~net~~interest income for the ~~first~~quarter ~~nine~~ended ~~months~~March of31, ~~2011~~2012 ~~remained~~was ~~relatively unchanged from the comparable period in 2010 at~~ $23.64 million., Acompared ~~decline~~to of $03.65 million infor the ~~provision~~quarter ~~for~~ended ~~loan~~March ~~losses~~31, ~~and~~2011, a ~~reduction~~decline of $0.21 million inor ~~both~~3.0%. The ~~salaries~~following ~~and~~tables ~~employee~~set ~~benefits~~forth asa ~~well~~summary asof ~~FDIC insurance premiums during~~ the ~~first~~changes ~~nine~~in ~~months~~average ofbalances ~~2011 compared to the same period~~ of ~~2010~~interest-earning ~~were~~assets ~~partially~~and ~~offset by a decrease in net~~ interest-bearing ~~income~~liabilities ofas ~~$0.5~~well ~~million,~~as anthe ~~increase~~amount ~~in OTTI losses~~ of ~~$0.1~~interest ~~million~~earned ~~on a security~~ and ainterest ~~$0.3~~paid ~~million~~with ~~increase~~the inresulting ~~income~~average ~~tax~~yield ~~expense.~~or rate:

Net interest income for the quarter ended September 30, 2011 was $3.4 million, compared to $3.7 million for the quarter ended September 30, 2010, a decline of $0.3 million or 7.3%. Net interest income for the first nine months of 2011 was $10.4 million, a $0.5 million or 4.5% decline from $10.9 million recognized during the same period in 2010. The following tables set forth a summary of the changes in interest earned and interest paid resulting from changes in volume and changes in rates for both the current quarter and year-to-date:

	Three Months Ended March 31,
	2012			2011
($000s)	Average	Income	Average	Average	Income	Average
	Daily	and	Yield or	Daily	and	Yield or
	Balance	Expense	Rate	Balance	Expense	Rate
ASSETS
Interest-earning assets:
Loans (1) (2)	$299,896	$3,790	5.06%	$298,698	$3,992	5.35%
Investment securities: (3)
Taxable securities	56,803	278	1.96%	38,901	245	2.52%
Nontaxable securities (2)	15,533	295	7.59%	25,249	491	7.78%
Federal funds sold	13,627	5	0.14%	16,298	8	0.18%
Other investments	18,128	41	0.91%	8,991	54	2.39%
Total earning assets	$403,987	$4,409	4.37%	$388,137	$4,790	4.94%

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
NOW accounts	$22,541	$10	0.18%	$22,456	$11	0.19%
Savings accounts	21,319	16	0.30%	20,048	18	0.35%
Money market accounts	137,917	211	0.61%	118,726	239	0.81%
Time deposits	105,135	398	1.51%	118,267	554	1.87%
Other borrowed funds	39,674	261	2.63%	44,007	281	2.55%
Total interest-bearing liabilities	$326,586	$896	1.10%	$323,504	$1,103	1.36%


Net interest income and rate spread		$3,513	3.27%		$3,687	3.58%

	Three Months Ended September 30,
	2011			2010
	Increase (Decrease)			Increase (Decrease)
	Due to Change In			Due to Change In
(In thousands)	Average	Average	Total	Average	Average	Total
	Balance	Rate	Change	Balance	Rate	Change
Interest income:
Loans	($94)	($341)	($435)	$59	($169)	($110)
Taxable securities	83	(18)	65	83	(162)	(79)
Nontaxable securities	(124)	(9)	(133)	(89)	3	(86)
Federal funds sold	6	(4)	2	(2)	0	(2)
Other investments	43	(38)	5	(8)	5	(3)
Total interest income	($86)	($410)	($496)	$43	($323)	($280)
Interest expense:
NOW accounts	$0	($1)	($1)	$1	($6)	($5)
Savings accounts	2	2	4	0	(2)	(2)
Money market accounts	23	(61)	(38)	59	(26)	33
Certificates and other time deposits	(52)	(116)	(168)	(102)	(225)	(327)
Other borrowed funds	(24)	(1)	(25)	(52)	(39)	(91)
Total interest expense	($51)	($177)	($228)	($94)	($298)	($392)
Net interest income	($35)	($233)	($268)	$137	($25)	$112

(1) Nonaccrual loans are included in the average daily balance figure, but interest income associated with these loans is recognized under the cash basis method of accounting.

	Nine Months Ended September 30,
	2011			2010
	Increase (Decrease)			Increase (Decrease)
	Due to Change In			Due to Change In
(In thousands)	Average	Average	Total	Average	Average	Total
	Balance	Rate	Change	Balance	Rate	Change
Interest income:
Loans	($112)	($821)	($933)	$57	($802)	($745)
Taxable securities	177	(124)	53	94	(540)	(446)
Nontaxable securities	(326)	(13)	(339)	(238)	5	(233)
Federal funds sold	10	(5)	5	4	(2)	2
Other investments	133	(104)	29	(13)	41	28
Total interest income	($118)	($1,067)	($1,185)	($96)	($1,298)	($1,394)
Interest expense:
NOW accounts	$2	($2)	$0	$5	($20)	($15)
Savings accounts	7	9	16	0	(6)	(6)
Money market accounts	83	(148)	(65)	152	(175)	(23)
Certificates and other time deposits	(202)	(343)	(545)	(239)	(742)	(981)
Other borrowed funds	(99)	1	(98)	(108)	(105)	(213)
Total interest expense	($209)	($483)	($692)	($190)	($1,048)	($1,238)
Net interest income	$91	($584)	($493)	$94	($250)	($156)

(2) The yield on tax-exempt loans and securities is computed on a fully taxable equivalent basis assuming a tax rate of 34%.

The decline in net interest income for the quarter-ended September 30, 2011 was primarily due to a decline in the yield on loans and securities along with a $9.5 million decline in the average balance of tax-exempt municipal securities. The net interest rate spread declined 41 basis points during this period from (3~~.70%~~) ~~for~~Securities ~~the~~are ~~quarter~~shown ~~ended~~at ~~September~~amortized 30, 2010 to 3.29% for the most recent quarter. DBI's yield on earning assets declined 70 basis points from 5.25% for the quarter ended September 30, 2010 to 4.45% as of the most recent quarter-end. The yields on loans, tax-exempt securities and taxable securities declined 46 basis points, 20 basis points and 15 basis points, respectively when comparing the current quarter with the same period of 2010. This reduction in the yield on earning assets was partially offset by a decline in the cost ~~of funds of 29 basis points from 1~~.55% for the quarter ended September 30, 2010 to 1.26% during the third quarter of 2011. This reduction in the cost of funds was primarily impacted by a 42 basis point reduction in the rate on certificates of deposits.

~~For~~The ~~the~~decline ~~third~~in net interest income for the quarter-ended ofMarch ~~2011~~31, ~~DBI's~~2012 ~~provision~~was ~~for~~primarily ~~credit~~due ~~losses~~to ~~was~~a ~~$0.2~~29 ~~million~~basis ~~compared~~point todecline in the yield on loans and securities along with a $09.37 million ~~during~~decline in the ~~same~~average ~~period~~balance of ~~2010~~tax-exempt municipal securities. ~~Nominal~~The net ~~charge-offs~~interest ofrate ~~$19~~spread on a tax equivalent basis declined 31 basis points during this period from 3.58% for the quarter ended March 31,~~125~~ ~~were~~2011 ~~recognized~~to in3.27% for the ~~third~~most recent quarter. DBI's ofyield ~~2011~~on ~~compared~~earning assets declined 57 basis points from 4.94% for the quarter ended March 31, 2011 to ~~net~~4.37% ~~charge-offs~~as of $0the quarter ended March 31, 2012.3 The ~~million~~yields ~~during~~on taxable securities, loans and tax-exempt securities declined 56 basis points, 29 basis points and 19 basis points, respectively when comparing the ~~corresponding~~current quarter with the same period inof ~~2010~~2011. ~~For~~This reduction in the ~~nine~~yield ~~months~~on ~~ended~~earning ~~September~~assets ~~30,~~was ~~2011,~~partially ~~DBI's~~offset ~~provision~~by ~~for~~a ~~credit~~decline ~~losses~~in ~~totaled~~the ~~$0.5~~cost ~~million~~of ~~versus~~funds $of 26 basis points from 1.036% ~~million~~ for the ~~comparable~~quarter ~~period~~ended inMarch ~~2010~~31, 2011 to 1.10% during the first quarter of 2012. ~~Net~~This ~~charge-offs~~reduction ~~for~~in the ~~current~~cost ~~nine-month~~of ~~period~~funds ~~totaled~~was ~~$0.8~~primarily ~~million~~impacted ~~versus~~by a 36 basis point reduction in the rate and $013.71 million ~~for~~decline ~~the~~in ~~comparable~~average ~~period~~balances inon ~~2010~~certificates of deposits.

~~Noninterest~~For ~~income for~~ the ~~three~~first ~~months~~quarters ~~ended~~of ~~September~~2012 ~~30,~~and 2011 ~~decreased $58~~,~~005~~ ~~compared~~DBI's toprovision ~~the~~for ~~corresponding~~credit ~~period~~losses inwas ~~2010,~~$0.2 amillion. Net ~~decrease~~charge-offs of 10$0.~~7%. The~~1 ~~primary~~million ~~reason~~were ~~for~~recognized ~~the decline is due to a reduction~~ in ~~loan sale gains of $47,203 during~~ the ~~third~~first quarter of ~~2011~~2012 compared to ~~the~~net ~~third~~charge-offs ~~quarter~~ of ~~2010~~$0. ~~Noninterest~~3 ~~income~~million ~~for~~during the ~~nine~~corresponding ~~months~~period ~~ended~~in ~~September 30,~~ 2011 ~~decreased nominally (3~~.~~2%) versus the nine months ended September 30, 2010.~~

Noninterest ~~expense~~income ~~decreased by $0.2 million~~ for the three months ended ~~September~~March 3031, ~~2011~~2012 ~~compared~~increased ~~to the third quarter of 2010. The decrease is primarily attributable to a reduction in FDIC insurance expense and occupancy expenses of~~ $0.1 million ~~each~~compared ~~for~~to the ~~third~~corresponding ~~quarter~~period ofin 2011, ~~versus~~an ~~the~~increase ~~comparable quarter~~ of ~~2010~~21.4%. The ~~lower~~primary ~~FDIC~~reason ~~insurance~~for ~~premiums~~the ~~resulted~~improvement ~~from~~is adue ~~new~~to ~~premium~~an ~~structure~~increase ~~implemented~~in byservice ~~the~~fees ~~FDIC~~and ~~effective~~commissions ~~April~~of $0.1, ~~2011. Occupancy~~million ~~expenses were lower~~ during the ~~third~~first quarter of ~~2011~~2012 ~~due to a reduction in depreciation expense~~ compared to ~~with~~ the ~~same~~first ~~period~~quarter inof ~~2010. For the nine months ended September 30,~~ 2011~~, noninterest expense decreased $0~~.~~4 million or 5.6% versus the comparable period in 2010.~~ This ~~decrease~~is ~~was primarily~~ the result of a ~~$0.2~~bonus ~~million~~insurance orcommission ~~4.6%~~payment ~~decrease~~of ~~in salaries and employee benefits, a~~ $0.21 million orfrom ~~33.5%~~DSB's ~~decrease~~credit-life ~~in FDIC~~ insurance ~~premiums~~carrier ~~and~~that awas ~~$0.1~~paid ~~million~~during orMarch 122012.1% The ~~decrease~~bonus inwas ~~occupancy~~paid ~~expenses,~~as ~~offset~~compensation byfor ainsurance ~~$0.1~~policy ~~million~~sales ~~increase~~levels realized in ~~loss~~recent onyears ~~the~~and ~~sale~~it ofwill ~~other~~not ~~real~~be ~~estate~~a ~~for~~recurring ~~the period~~payment.

~~Additional~~Noninterest ~~OTTI~~expense ~~credit~~remained ~~loss~~stable ~~was~~for ~~recognized~~the ~~during~~quarter ~~the~~ended ~~most~~March ~~recent~~31, ~~quarter~~2012 oncompared ~~one~~to the first quarter of 2011 at $2.5 million. FDIC insurance expense was reduced by $0.1 million for the ~~two~~first ~~securities~~quarter ~~previously~~of ~~determined~~2012 toversus bethe ~~other-than-temporarily-impaired~~comparable quarter of 2011. The ~~credit~~lower ~~loss~~FDIC ~~recognized~~insurance ~~through~~premiums ~~the~~resulted ~~income~~from ~~statement~~a ~~was~~new ~~$45,487~~premium ~~during~~structure ~~the~~implemented ~~three~~by ~~months~~the ~~ended~~FDIC ~~September~~effective 30April 1, 2011. Occupancy ~~compared~~expenses towere ~~$9,902~~slightly ~~recognized~~lower during the ~~third~~current ~~quarter~~period ofdue ~~2010~~in onpart to a reduction in depreciation expense compared to with the same ~~security~~period in 2011. ~~For~~These ~~the~~expense ~~nine~~reductions ~~months~~were ~~ended~~offset ~~September~~by ~~30,~~nominal ~~2011,~~increases ~~OTTI~~in ~~credit~~salaries ~~losses~~and ~~recognized~~employee onbenefits aof ~~security~~$64,716 ~~previously~~and ~~determined~~data toprocessing beof ~~other-than-temporarily-impaired totaled~~ $~~0.2~~44,334 ~~million~~for ~~versus~~the ~~nominal~~first ~~OTTI~~three ~~credit~~months ~~losses~~of ~~recognized~~2012 ~~during~~compared to the ~~same~~first ~~period~~three months of ~~2010~~2011.

~~For~~Additional ~~the~~OTTI ~~three~~credit ~~months~~loss ~~ended~~was ~~September~~recognized ~~30,~~during ~~2011~~the ~~and~~most ~~2010,~~recent ~~DBI~~quarter ~~recorded~~on ~~combined~~the ~~federal~~two ~~and~~securities ~~state~~previously ~~income~~determined ~~tax~~to ~~expense~~be ~~of $0~~other-than-temporarily-impaired.4 The ~~million~~credit ~~and~~loss ~~$0.3~~recognized ~~million,~~through ~~respectively. These~~the ~~provisions reflect effective~~ income ~~tax~~statement ~~rates~~was of$32,875 ~~31%~~during inthe ~~2011~~three ~~and~~months ~~27%~~ended inMarch ~~2010. DBI's~~31, ~~combined~~2012 ~~statutory~~compared ~~tax rate is 39%. The lower effective income tax rates are primarily due~~ to ~~certain~~$24,474 ~~federally~~recognized ~~tax~~during ~~exempt interest earned on state and local government investment securities. The effective tax rates for~~ the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30,~~ 2011 ~~and~~on ~~2010~~one ~~were~~of ~~30%~~the ~~and~~two ~~25%, respectively~~securities.

For both the three months ended March 31, 2012 and 2011, DBI recorded combined federal and state income tax expense of $0.4 million. These provisions reflect effective income tax rates of 34% for the first quarter of 2012 and 29% for the first quarter of 2011. DBI's combined statutory tax rate is 39%. The lower effective income tax rates are primarily due to certain federally tax exempt interest earned on state and local government investment securities.

Financial Condition

Total assets decreased by $73.83 million between December 31, ~~2010~~2011 and ~~September~~March 3031, ~~2011~~2012. Cash, cash equivalents and fed funds sold decreased by $614.06 million since December 31, ~~2010~~2011, while ~~loans~~other investments declined $31.83 million ~~and loans held for sale fell by $2.5 million~~ during the same period. AnIncreases ~~increase~~ in investment securities of $9.2 million and loans of $3.78 million during the first ~~nine~~three months of ~~2011~~2012 partially offset these declines.

The following table sets forth major types of loans, excluding loans held for sale, by primary collateral and the percentage of total loans for each type:

	September 30, 2011		December 31, 2010
	March 31, 2012		December 31, 2011
(In thousands)	Amount	%	Amount	%
$(000)s	Amount	%	Amount	%
Real Estate:
Residential	$7572,~~384~~878	2524.52%	$7772,~~984~~656	2624.04%
Commercial	6061,~~420~~453	20.4%	5860,~~304~~865	1920.54%
Agricultural	7678,~~893~~827	26.01%	7178,~~782~~768	2426.05%
Construction	1311,~~144~~828	43.59%	1211,~~793~~655	4.3.9%
	$225,841	76.4%	$220,863	73.8%
	$224,986	74.6%	$223,944	75.2%
Commercial	3538,~~090~~992	1112.9%	4235,~~427~~178	1411.28%
Agricultural	2427,~~104~~362	89.21%	2427,~~726~~661	89.23%
Consumer and other	10,~~476~~266	3.54%	11,~~339~~049	3.87%
TOTAL	$~~295~~301,~~511~~606	100.0%	$~~299~~297,~~355~~832	100.0%

During ~~the second quarter of~~ 2011, management made the decision to purchase government guaranteed loans given the lack of quality loan growth potential currently available within DSB's lending market. ~~Additional loans were purchased during the third quarter of 2011.~~ As of ~~September~~March 3031, ~~2011~~2012 there were approximately $911.07 million of government guaranteed loans recorded, of which $58.70 million are secured by agricultural real estate and $3.37 million by commercial real estate. The average maturity of the loans purchased is approximately 10 years. The premiums on the loans are being amortized over a three year period. Management will continue to evaluate DSB's loan portfolio and make additional purchases as deemed appropriate. Management is authorized to invest up to $15 million in government guaranteed loan purchases.

The allowance for loan losses ~~decreased~~remained ~~approximately~~stable ~~$0.3 million~~ during the first ~~nine~~quarter ~~months~~ of ~~2011~~2012 at $6.6 million. Provisions of $~~0.5~~150,000 ~~million~~ were added to the allowance in the first ~~nine~~three months of ~~2011~~2012 and were partially offset by net charge-offs of approximately $~~0.8~~125,000 ~~million~~ during the period. The allowance equals 2.2119% of total loans as of ~~September~~March 3031, ~~2011~~2012 compared to 2.2921% at December 31, ~~2010~~2011. Nonaccrual loans totaled $89.21 million at ~~September~~March 3031, ~~2011~~2012, aan ~~decrease~~increase of approximately $0.4 million compared to ~~December~~nonaccrual ~~31,~~loans ~~2010~~of $8. ~~The~~7 ~~following~~million ~~table~~at ~~sets~~December ~~forth~~31, ~~nonaccrual loans by major category:~~2011.

	September 30	December 31,
$(000)s	2011	2010
Secured By Real Estate:
Residential	$1,620	$2,042
Agricultural	246	0
Commercial	3,832	5,673
Construction	1,724	402
Subtotal Real Estate Loans	7,422	8,117
Secured by commercial assets	508	227
Secured by agricultural assets	0	116
Secured by other assets	233	173
TOTAL	$8,163	$8,633

The following table sets forth nonaccrual loans by major category:

DBI's ratio of loans more than 30 days past due (including nonaccrual loans) to total loans was 3.48% at September 30, 2011, compared to 3.04% at year-end 2010. As of September 30, 2011, management had identified $39.8 million of potential problem loans compared to $44.1 million at year-end 2010. Loan quality continues to be a concern and improving the portfolio is the primary focus for management. DBI has no accruing loans that are past due 90 days or more.

	March 31,	December 31,
$(000)s	2012	2011
Secured By Real Estate:
Residential	$2,262	$2,195
Agricultural	0	0
Commercial	3,063	2,299
Construction	2,949	3,364
Subtotal Real Estate Loans	8,274	7,858
Secured by commercial assets	584	563
Secured by agricultural assets	0	0
Secured by other assets	200	235
TOTAL	$9,058	$8,656

DBI's ~~investment~~ratio inof ~~other~~loans ~~real~~more ~~estate~~than ~~(property~~30 ~~acquired~~days ~~through~~past ~~foreclosure~~due or(including innonaccrual ~~satisfaction~~loans) ofto total loans) ~~increased~~was $13.049% ~~million~~at inMarch ~~the~~31, ~~first~~2012, ~~nine~~compared ~~months~~to ~~of 2011~~3. At58% ~~September~~at ~~30,~~year-end 2011. As ~~the balance in other real estate was comprised~~ of ~~five~~March ~~commercial~~31, ~~real~~2012, ~~estate~~management ~~properties~~had ~~totaling~~identified $137.42 million, ~~three~~of ~~construction/land~~potential ~~development~~problem ~~properties~~loans ~~totaling~~compared to $038.42 million ~~and~~at ~~two~~year-end ~~residential~~2011. Loan ~~real~~quality ~~estate~~continues ~~properties~~to ~~with~~be ana ~~estimated~~concern ~~value~~and ofimproving ~~$0.1~~the ~~million. This~~portfolio ~~compares~~is to the ~~eleven~~primary ~~parcels~~focus ~~held~~for ~~at year-end 2010 consisting of $0~~management.5 DBI ~~million~~has inno ~~residential~~accruing ~~real~~loans ~~estate,~~that ~~$0.3~~are ~~million~~past indue ~~commercial~~90 ~~real~~days ~~estate~~or ~~and $0~~more.~~1 million construction/land development properties.~~

DBI's investment in other real estate (property acquired through foreclosure or in satisfaction of loans) decreased $0.2 million in the first three months of 2012. At March 31, 2012 the balance in other real estate comprised three construction/land development properties totaling $0.3 million, one property secured by agricultural-related real estate with an estimated value of $0.2 million and four residential real estate properties with an estimated value of $0.1 million. This compares to the seven parcels held at year-end 2011 consisting of $0.3 million in construction/land development properties, $0.2 million in commercial real estate, $0.2 million in agricultural-related real estate and $0.1 million in residential real estate.

The following table sets forth certain data concerning nonaccrual loans, past due accruing loans, restructured loans and other real estate:

	September 30, 2011		December 31, 2010
	March 31, 2012		December 31, 2011
		% of Total		% of Total
(In thousands)	Amount	Loans	Amount	Loans
$(000)s	Amount	Loans	Amount	Loans
Nonaccrual Loans (1)	$89,~~163~~058	23.80%	$8,~~633~~656	2.9%
Restructured Accruing Loans	54,~~466~~446	1.85%	4,~~642~~449	1.54%
Accruing Loans Past Due
90 Days or More	0	0.0%	0	0.0%
Total	$13,~~629~~504	4.65%	$13,~~275~~105	4.43%
Other Real Estate	$~~1,895~~632		$~~864~~802

(1) Includes restructured loans of $24.~~1 million and $1.~~3 million as of ~~September~~both 30March 31, ~~2011~~2012 and December 31, ~~2010, respectively~~2011.

Total deposits declined $52.39 million at ~~September~~March 3031, ~~2011~~2012 compared to balances at December 31, ~~2010~~2011. ~~This~~Noninterest-bearing ~~decrease~~deposits isdecreased ~~largely~~by ~~attributable~~$7.9 tomillion, or 16.6%, during the ~~loss~~first three months of a2012. Interest-bearing ~~large~~deposits increased $5.0 million or 1.8% between December 31, ~~short-term~~2011 ~~corporate~~and ~~deposit~~March 31, 2012. Money market accounts increased $5.5 million or 4.2% during the first ~~quarter~~three months of ~~2011,~~2012 asand ~~discussed~~savings ~~more~~accounts ~~fully~~increased ~~below~~$1. ~~Noninterest~~3 million or 6.3% during the same period. The trend in money market balances continues to increase given the current rate environment and depositors reluctance to commit to long-~~bearing~~term ~~deposits~~rates. ~~increased~~NOW byaccount balances decreased $30.9 million or 4.2% since year-end 2011, while certificates of deposit also fell $0.9 million, or 80.58%, during the first ~~nine~~quarter ~~months~~of 2012. Given the current interest rate environment, there has been a shift away from certificates of ~~2011~~deposit into money market accounts as customers are reluctant to lock into a rate at this time. DBI's money market rates are comparable to its rates for short-term certificates of deposit.

Interest-bearing deposits fell $8.5 million between December 31, 2010 and September 30, 2011. NOW accounts declined $10.0 million, or 33.3% since year-end 2010 due to the decline in one large corporate customer's balance. The customer deposited $10.0 million on December 31, 2010 and subsequently withdrew those funds within three weeks. Certificates of deposit fell $10.1 million, or 8.5%, during the first nine months of 2011, while money market accounts increased $10.1 million, or 8.9%, during this period. Given the current interest rate environment, there has been a shift away from certificates of deposit into money market accounts as customers are reluctant to lock into a rate at this time. DBI's money market rates are comparable to its rates for short-term certificates of deposit.

Interest-bearing deposits consisted of the following:

(In thousands)	9/30/2011	12/31/2010
$(000)s	3/31/2012	12/31/2011
NOW accounts	$2021,~~028~~348	$3022,~~034~~278
Savings accounts	2122,~~236~~466	1921,~~676~~129
Money market accounts	~~123~~136,~~542~~443	~~113~~130,~~472~~959
Certificates of deposit	~~109~~105,~~237~~071	~~119~~105,~~352~~957
TOTAL	$~~274~~285,~~043~~328	$~~282~~280,~~534~~323

Short-term borrowings decreased $20.34 million or 163.40% as of ~~September~~March 3031, ~~2011~~2012 compared to December 31, ~~2010~~2011. Loan ~~due~~volume tofor ~~lower~~DACC ~~loan~~was ~~volume~~relatively ~~for~~stable ~~DACC~~during ~~which~~the ~~resulted~~first inquarter aof ~~decline~~201,2 inthereby eliminating the ~~balance~~need ~~drawn~~to onadvance ~~DACC's~~funds against the line of credit ~~during~~at ~~2011~~Agribank, FCB. Long-term borrowings ~~decreased~~remained ~~$1.6~~unchanged ~~million~~since ~~during~~year-end ~~the same period due to normal loan maturities~~2011.

Capital Resources

Stockholders' equity increased by $20.18 million to $56.08 million as of ~~September~~March 3031, ~~2011~~2012 from $56.0 million at December 31, ~~2010~~2011 due primarily to earnings for the period of $20.68 million and a decrease in other comprehensive loss of $0.31 million that were partially offset by the ~~dividend~~purchase ~~payment~~of treasury stock of $0.91 million. As of ~~September~~March 3031, ~~2011~~2012 DBI's leverage ratio was 13.75%, its risk-based core capital ratio was 18.24% and its risk-based total capital ratio was 19.56%. As of ~~September~~March 3031, ~~2011~~2012, DSB's leverage ratio was 10.86% and its risk-based total capital ratio was 16.1%. DBI and DSB continue to maintain capital levels well above regulatory minimum levels established for "well-capitalized" institutions. DBI believes its and DSB's capital positions as ofMarch ~~September 30~~31, ~~2011~~2012 are adequate under current economic conditions.

Liquidity

Liquidity refers to the ability of DBI to generate adequate amounts of cash to meet its needs. DBI maintains liquid assets and established lines of credit to meet its liquidity needs. DBI's Board of Directors annually approves a Consolidated Contingent Liquidity Plan, which reviews the sources and uses of liquidity for DBI, DSB and DACC. Cash, cash equivalents and federal funds sold decreased $614.06 million or 1734.28% to $2927.25 million during the first ~~nine~~three months of ~~2011~~2012 primarily due to the ~~reduction~~increases in ~~deposits~~investment securities of $59.2 million and loans of $3.8 million during this period. The major sources and uses of cash are detailed in the accompanying Consolidated Statements of Cash Flows.

In addition to on-balance sheet sources of funds, DBI also has off-balance sheet sources available to meet liquidity needs. Specifically, DBI has unused lines of credit of $5248.3 million as of ~~September~~March 3031, ~~2011~~2012. This includes a $20.0 million line of credit with the Federal Reserve Bank of Chicago that was established in 1999. DSB has not borrowed on this line. DBI also has $7391.54 million of eligible loans and securities that could be pledged to increase its available credit. Management believes DBI's and DSB's liquidity positions as of ~~September~~March 3031, ~~2011~~2012 are adequate under current economic conditions.

Off-Balance Sheet Arrangements

DBI and its subsidiaries are parties to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit and stand-by letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the statement of financial condition. The contract or notional amounts of those instruments reflect the extent of involvement DBI and its subsidiaries have in particular classes of financial instruments.

The exposure of DBI and its subsidiaries to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of these instruments. DBI and its subsidiaries use the same credit policies in making commitments and conditional obligations as for on-balance sheet instruments. DBI and its subsidiaries require collateral or other security to support financial instruments with credit risk. The following table sets forth DBI's commitments to extend credit and standby letters of credit:

	Contract or
	Notional Amount	Secured
(In thousands)	~~September~~March 3031, ~~2011~~2012	Portion
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$5045,~~977~~515	$4640,~~255~~868
Standby letters of credit and financial guarantees written	1,~~864~~513	1,~~864~~513

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. DBI and its subsidiaries evaluate each customer's creditworthiness on a case-by-case basis. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by DSB to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support commercial business transactions. When a customer fails to perform according to the terms of the agreement, DSB honors drafts drawn by the third party in amounts up to the contract amount. A majority of the letters of credit expire within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties and residential properties. All letters of credit are fully collateralized.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

DBI's primary market risk position has not materially changed from that disclosed in DBI's ~~2010~~2011 Annual Report.

Item 4. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended, DBI's management, under the supervision and with the participation of DBI's principal executive officer and principal financial officer, has evaluated DBI's disclosure controls and procedures as of the end of the period covered by this Report. Based on that evaluation, DBI's principal executive officer and principal financial officer believe that DBI's disclosure controls and procedures are effective as of the end of the period covered by this Report.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There were no significant changes in ~~DBI's~~DBIss internal controls over financial reporting or in other factors that have significantly affected those controls during the fiscal quarter covered by this Report, including any correction actions with regard to significant deficiencies and material weaknesses.

Part II. Other Information

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Item 1A - Risk Factors of DBI's ~~2010~~2011 Annual Report, which could materially affect DBI's business, financial condition or future results. There have been no material changes in risk factors as described in such Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~During the quarter ended September 30, 2011,~~ DBI did not sell any equity securities ~~which~~during ~~were not registered under~~ the ~~Securities~~first ~~Act~~quarter of ~~1033,~~2012 asthat ~~amended,~~were ornot ~~repurchase~~registered ~~any~~under ofthe ~~its~~Securities ~~equity securities~~Act.

During the quarter ended March 31, 2012, DBI's activity of equity security shares repurchased was as follows:

	Total		Total Number of Shares	Maximum Number of Shares
	Number Of Shares	Average Price Paid	Purchased as Part of Publicly	That May Yet Be Purchased
Period	Purchased (1)	Per Share	Announced Plans	Under the Plan

January 1-31	0	$0	0	N/A


February 1-29	0	$0	0	N/A


March 1-31	349	$420	349	N/A


(1) - On February 21, 2012, the Board of Directors of DBI approved the repurchase of up to 714 common shares
in open market transactions. The approval of repurchases was for February 12, 2012 through March 31, 2012.

The Federal Reserve Board ("the Board") has adopted regulations that deal with the measure of capitalization for bank holding companies. The Board has also issued a policy statement on the payment of cash dividends by bank holding companies, wherein the Board has stated that a bank holding company experiencing earnings weaknesses should not pay cash dividends exceeding its net income or which could only be funded in ways that weaken the bank holding company's financial health, such as by borrowing.

The ability of DBI to pay dividends on its common stock is largely dependent upon the ability of DSB to pay dividends on its stock held by DBI. DSB's ability to pay dividends is restricted by both state and federal laws and regulations. DSB is subject to policies and regulations issued by the FDIC and the Division of Banking of the Wisconsin Department of Financial Institutions ("the Division"), which, in part, establish minimum acceptable capital requirements for banks, thereby limiting the ability of such banks to pay dividends. In addition, Wisconsin law provides that state chartered banks may declare and pay dividends out of undivided profits but only after provision has been made for all expenses, losses, required reserves, taxes and interest accrued or due from the bank. Payments of dividends in some circumstances may require the written consent of the Division.

Item 6. Exhibits

(a) Exhibits:

31.1 Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated ~~Balance~~Statements ~~Sheets~~of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders' Equity, (ivv) Consolidated Statements of Cash Flows, and (vvi) Notes to Consolidated Financial Statements tagged as blocks of text. *

* As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DENMARK BANCSHARES, INC.

Date: ~~November~~May 24, ~~2011~~2012 /s/ John P. Olsen

John P. Olsen

President and CEO

Date: ~~November~~May 24, ~~2011~~2012 /s/ Dennis J. Heim

Dennis J. Heim

Vice President, CFO and Treasurer

Denmark Bancshares, Inc.
Consolidated Statement of Changes in Stockholders' Equity
(Unaudited)
	Common Stock				Accumulated
					Other
			Paid in	Retained	Comprehensive
	Shares	Amount	Capital	Earnings	Income	Total
Balance, December 31, 2010	118,917	$16,048,110	$469,986	$38,031,717	($623,989)	$53,925,824
Comprehensive income
Net income				2,629,154		2,629,154
Other comprehensive income, net of tax
Change in unrealized loss on securities available-for-sale,
net of reclassification adjustment (1)					303,043	303,043
Total comprehensive income						$2,932,197
Cash dividends, $7.25 per share				(862,148)		(862,148)
Balance, September 30, 2011	118,917	$16,048,110	$469,986	$39,798,723	($320,946)	$55,995,873

(1) Disclosure of reclassification amount:
Unrealized gains arising during the period							$432,292
Less: Tax expense on unrealized gains							(200,266)
Plus: Reclassification adjustment for losses realized and included in net income							118,361
Less: Reclassification adjustment for tax benefit on realized losses							(47,344)
Net change in unrealized losses on securities							$303,043
The accompanying notes are an integral part of these financial statements.

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