Dear Shareholders and Friends:

On behalf of the Board of Directors, management and staff, we greet you with enthusiasm and sincere gratitude for your commitment to community banking. As many of you recall, this Bank opened amid great excitement and joy over 18 years ago during a period when community banking was declining in the inner-city communities. This Bank’s entrance into the region came with a commitment to bring a full array of affordable financial products and services to these communities to protect its residents from falling prey to unregulated lending practices. We are pleased to report that we have worked diligently to make good on that promise by lending responsibly and developing competitive products and services to sustain the financial needs of our customers.

The Bank’s strategic focus includes supporting small businesses with their capital needs and consumers in selecting financial services that are both affordable and sustainable. Statistics indicate that small businesses are the fastest growing sector that employs more individuals therefore making and indelible mark on the local economy. Our customers are our backbone and it is important that we continue to demonstrate to them the versatility of our products and services to ensure that they make the right choices to support families while introducing our youth to financial services at an early age. The Bank has a rich history of encouraging families to save as we see the coming of age of many of the Bank’s early depositors. Parents and Grandparents opened youth savings accounts that are now being used to help pay for college tuitions.

Equally important is the Bank’s desire to sustain its financial vitality by continuing to manage the market changes and adjust its focus accordingly to ensure a safe and sound organization. The management team and staff are fully aware that our success depends on building and maintaining good relationships with our customers. Community bankers are conservative and accountable to their customers – since many of you are the people we see often during our personal and professional lives.

Leadership is key to the Bank meeting its goals. The Board of Directors continues its long-standing commitment of leading this Bank to the next level of performance by supporting management’s delivery of innovative products and services and exercising its competitive advantage by being nimble and accessible to its customers and potential customers. The management team has been strengthened with new outside talent and advancements by talent within. We work to find the right balance in customer relationships and operations and continue to build a team of managers and employees who understand and embrace the Bank’s vision.

Finally, we firmly believe that “community banking” is here to stay and we invite you to join with us as we work together developing solutions to bring our community residents into the financial mainstream… Back to Basics – Back to Community Banking.

Sincerely,

Evelyn F. Smalls
President and Chief Executive Officer

Sincerely,

L. Armstead Edwards
Chairman, Board of Directors