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We must also remain cost conscious and recently made certain organizational changes to help us achieve
better results. Consequently, we recognized $159,000 in restructuring costs in the 4th quarter. Absent
this charge and the expense of recognizing certain legal matters during the year, earnings in 2008 would
have been $1.2 million.
Capital is improving as we generate earnings. It also grew during 2008 to $2.1 million in new shares of
company stock sold to a small group of investors including board members and friends of the Bank in the
medical profession. These medical professionals, some of whom are members of a related advisory board,
are associated with our Physician's National Bank endeavor.
With growing capital, the Bank can expand. It achieved total assets at the end of 2008 amounting to $260
million, up $49 million or 23% from $211 million at the end of 2007. Our capital position and earnings expectations
will allow for over 20% growth again in 2009 as we march toward $300 million in assets. Asset growth, however,
is not our primary goal. Higher profits with consistency are more important. Also, quality growth is more critical
than growth alone. Our asset quality statistics remain solid and are very favorable in comparison to our peers and
the industry. On December 31, 2008, past due and/or non-accruing loans totaled $2.6 million, amounting to only 1.3%
of loans outstanding.
We look forward to the New Year with great hope, despite the many uncertainties the country's economic system faces.
The stimulus package of the new administration in Washington and the still incomplete stimulus intended from the
various bailout packages already approved will have unknown influences, negative and positive, on your Bank.
Nevertheless, we are confident that we are pointed in the right direction.
As always, I am very appreciative of your support. Along with the other members of my executive team, I wish you
a fine New Year to be enjoyed in good health.
Sincerely,
William H. Bromley
President & CEO
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