“The sky is falling!”  Pick up a paper or listen to the quick bursts of news on TV or radio, and what you get are reports of a sub-prime crisis, a “banking” crisis and market turmoil.  Some recent news reports and commentaries have also raised concern for the safety of deposits in community banks.  These reports are irresponsible and misleading. 

First and foremost, I want to assure you Exchange Bank is safe and sound.  For a century we have focused on the needs of families and businesses in our community.  We consider it our ultimate responsibility to protect the assets you entrust with us.

Your FDIC insured deposits are secure - the Federal Deposit Insurance Corporation guarantees your accounts with more than $52 billion in assets.  No one has ever lost a penny of deposits insured by the FDIC held in community banks.  No one.

Another issue that the media has focused on is the “sub-prime crisis”.  Keep in mind that those reports overlook the fact that the sub-prime lending crisis was caused by unregulated brokers and Wall Street institutions, sometimes using the title “bank”, and not by regulated, insured banks.  Exchange Bank was not and will never be a sub-prime residential real estate lender.

There are two ways a financial institution can fail – poor capital and poor liquidity.  Exchange Bank has a capital ratio of 13% - a bank is considered well capitalized at 8%. Our loan quality is sound and we have sufficient reserves for any possible loan losses.  We remain a well-capitalized bank, with ample resources for personal and business loans and lines of credit.

Challenging economic times call for sound decisions.  Exchange Bank and the bankers you know and trust remain the best option around.  Please contact us with any questions or concerns you may have.  We value our relationship with you and greatly appreciate your continued support and confidence.

Sincerely,

Ricky Ray

Chairman & CEO