Corpor ate InformatIon

town and Country financial Corporation is the parent holding company for town and Country Bank with offices in Springfield, mt. Zion, forsyth, and Decatur, town & Country Banc mortgage Services, Inc., and Logan County Bank with offices in Lincoln and Buffalo. town and Country financial Corporation shares are traded under the symbol tWCf.

TRANSFER AGENTtown and Country financial Corporation acts as its own transfer agent. Contact us by calling 866.770.3100 with questions on registrations or stock transfer instructions. mail requests to our Corporate office at the following address:

town and Country financial Corporation3601 Wabash aveSpringfield, IL 62711www.townandcountrybank.com

Statement of Condition

2011 SeConD Quarter

STATEmENT oF CoNdiTioNas of June 30 (unaudited) 2011 2010

AssetsCash and due from banks $ 10,233,066 $ 19,856,348 Investments 107,050,677 107,428,532 Loans, net 230,753,335 223,702,192 Other assets 19,901,555 19,666,511 Total assets $ 367,938,633 $ 370,653,583

LiAbiLities & equityDeposits $ 297,824,308 $ 301,905,272 Borrowed money 23,953,500 26,043,588 Other liabilities 1,614,869 922,682 Total liabilities 323,392,677 328,871,542 Trust preferred securities 11,500,000 11,500,000 Equity capital 33,045,956 30,282,041 Total liabilities & equity $ 367,938,633 $ 370,653,583

six Month Period ended June 30 (unaudited)Interest income $ 7,960,523 $ 8,393,655 Interest expense (1,663,567) (2,562,645)Net interest income $ 6,296,956 $ 5,831,010 Provision for loan losses – (300,416)Noninterest income 2,326,220 2,002,551 Gain on sale of securities 195,856 74,824 Writedown due to impairment of securities – (204,600)Noninterest expense (6,780,986) (6,577,088)

Income before income taxes $ 2,038,046 $ 826,281 Income taxes (685,000) (144,300)Net income $ 1,353,046 $ 681,981

SElECTEd FiNANCiAl CompARiSoNsix Month Period ended June 30 (unaudited) Net income before nonrecurring items per share $ 0.44 $ 0.27 Net income from nonrecurring items per share $ 0.04 $ (0.03)Basic earnings per share $ 0.48 $ 0.24 Net charge offs to average loans -0.04% 0.06%Basic surplus (liquidity) 14.00% 17.20%Net revenue (in millions) $ 8.8 $ 7.7 Net interest margin 3.77% 3.55%Return on equity 8.55% 4.61%Return on assets 0.74% 0.37% As of As of June 30 deceMber 31 (unaudited) 2011 2010Tier 1 leverage ratio 11.4% 10.9%Total risk-based capital ratio 15.4% 15.1%Nonperforming loans 0.60% 0.40%Delinquent loans, excluding nonperforming 0.15% 0.75%Allowance for loan loss 1.30% 1.32%Mortgage loans sold with servicing retained (in millions) $349.7 $340.6Trust assets under management (in millions) $71.1 $67.7

Dear Fellow Shareholders,as we conclude the second quarter of 2011, we evaluate our results and take pride in the steady improve ment that has come with our new clarity and focus. first and foremost our customers and their needs and desires are at the center of town and Country. With that belief set, we are committed to investing wisely in people, locations, and technology so as to re-energize and refocus attention to the things that matter most to our clients.

During the second quarter, we converted our downtown Decatur loan production office into a full-service branch. We have enjoyed steady growth in Decatur and look forward to providing more services in the future. operating alongside locations in mt. Zion and forsyth, this new location adds convenience and accessibility to existing and future customers from the area.

Growth—in soundness, earnings, and size—are the Company’s core financial goals that we also keep at the forefront. In the quarter we were pleased that balance sheet strength measured through liquidity, capital and asset quality was maintained or improved. Liquidity remained

strong even as loans grew by $13 million, or 6%, and deposits declined from their near all-time high levels. the tier 1 capital ratio improved to 11.4% at June 30, 2011 while total risk-based capital was 15.4%. equity capital increased to $33 million and the book value per share was $11.83 compared to $11.13 at year-end 2010. reflecting the quality of the loan portfolio, the level of past due and nonperforming loans fell to 0.75% of total loans compared to 1.15% at December 31, 2010. the allowance for loan loss contracted a bit to 1.30% from 1.32% at year-end, reflecting strong credit quality metrics and modest loan growth.

our second-quarter earnings reflected another quarter of improvement as compared to prior periods. net income was $746 thousand ($0.27 per share), 104% higher than the year ago quarter and up 23% from earnings posted in the first quarter of 2011. the current quarter’s results were supported by a strong net interest margin, 3.82% compared with 3.62% in the second quarter of 2010, and asset quality that did not require a provision expense or impairment charge.

for the first-half of 2011, net income was $1.353 million, or $0.48 per share, up 98% compared to $682 thousand, or $0.24 per share, in the first half of 2010. net revenue, excluding equity security gains and impairment charges, was up 14% to $8.6 million when compared to the prior comparable period while non-interest expense was $6.8 million, or 3% higher than the year ago primarily due to expenses related to other real estate holdings. Strong asset quality and lack of charge offs resulted in no provision for loan loss expense compared to $300 thousand in the prior year. and finally, income from the gain on sale of equity securities was $121 thousand higher in the current year and no impairment charge was taken in 2011 compared to a charge of $205 thousand in the first-half of 2010.

as noted in previous letters, balance sheet growth has been slower than we would like. We were pleased, therefore, by this quarter’s loan growth, primarily loans to businesses. However, we acknowledge that consistent and high quality loan growth will be extremely challenging in the future due to the unevenness of our economic recovery.

the Board of Directors declared a $0.03 per share quarterly cash dividend. the dividend is payable on September 15, 2011 to stockholders of record September 1, 2011.

as always, we sincerely thank you for your continued confidence and investment in town and Country financial Corporation.

Sincerely,

micah r. Bartlett David e. KirschnerPresident and CEO Executive Chairman

Micah R. Bartlett (L) and David E. Kirschner