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 November 3, 2008
Dear Shareholders,
The historic collapse of many mortgage lenders in the United States has had far reaching consequences throughout our economy. As a result, like many financial institutions in the United States, 1st Centennial is reporting losses in the third quarter of this year. However, we are confident that we will weather this storm, and remain committed to serving the communities where you have been our neighbors, friends and partners for the past 18 years. We look forward to continuing our relationship with you built on trust, integrity and our long-time commitment to service.
Our losses stem solely from our lending to local merchant builders who are unable to meet their commitments in the wake of the national housing market fallout. At this time we are no longer originating any residential construction loans. Thanks to our solid foundation and commitment to safe banking fundamentals, the other areas of our company continue to be profitable.
We also want you to know that 1st Centennial has never engaged in the sub-prime lending practices that have led to the demise of the housing market and our national economic crisis. Like many, we are feeling the pain of these poor practices.
We have responded to this crisis by suspending Construction lending, moderately growing our Commercial and Consumer portfolio, and providing other financial services to our customers. We are exploring capital alternatives in order to build upon our sound banking practices to emerge stronger and better equipped to serve our customers and community.
Additionally, recent increases in the Deposit Insurance Coverage offered by the FDIC make it possible for 1st Centennial to offer greater safeguards for your hard-earned money, allowing us to enhance the confidence of our existing depositors and attract new ones.
All non-interest bearing transaction deposits, including all personal and business checking deposit accounts that do not earn interest, are fully insured by the FDIC for the entire amount in the deposit account. All other deposit accounts at FDIC-insured institutions, like 1st Centennial, are insured up to at least $250,000 per depositor until December 31, 2009 - a $150,000 increase.
Times are tough right now. We know you are tightening your belts, wondering what is around the corner. We understand. We also understand that you are not an account number. You are our friends and neighbors. We are dedicated to securing your financial future through personalized service based on integrity, loyalty and a strong commitment to the community.
Thank you for your continued support.
Sincerely,
Patrick J. Meyer
Chairman of the Board
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