Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain Officers

The Compensation Committee of the board of directors of the Registrant recently undertook a review of executive compensation and recommended changes in salaries for senior executives. On July 28, 2009, the board approved salary changes for certain executive officers, effective August 1, 2009. The salary changes were made in recognition of increased responsibilities assumed by executives, especially in light of the recent acquisition of certain assets and liabilities of Cooperative Bank from the Federal Deposit Insurance Corporation, which substantially increased the size and scope of the Registrant's operations. The Compensation Committee and board also wanted to bring the compensation of the Registrant's executives more in line with compensation of executives at comparable financial institutions. The changes approved by the board included increasing the annual salaries of Jerry L. Ocheltree, Chief Executive Officer, to $486,800, Anna G. Hollers, Chief Operating Officer, to $297,700, Teresa C. Nixon, Chief Lending Officer, to $285,000, and Eric P. Credle, Chief Financial Officer, to $260,000.

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