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Letter to Our Shareholders To Our Shareholders:
Thanks to you, our shareholders, our directors, and our dedicated and experienced team of professionals, we are pleased to present, in this our first Annual Report, results substantially greater than our most optimistic projections. We offer to each of you our most sincere gratitude for your support and commitment. After a very successful initial offering, which raised in excess of $11,600,000, we received our National Bank Charter on July 2, 2001. Few new banks have been able to benefit from the level of initial capital we were able to raise. By year-end, after only six months of operations, our assets, driven by strong commercial loan demand and well-diversified deposit growth, exceeded $58,600,000. Loans and deposits both exceeded $49,000,000. These results place us among the fastest growing de novo banks opened in America during 2001. Operating results for each of the first six months have shown consistent improvement with the net interest income showing steady growth. As projected, we are reporting a loss for the first year of operations due to significant pre-opening expenses and establishing, from the very beginning, a strong reserve for possible losses. Until earning assets achieve sufficient levels, we expect operating losses to continue for the near-term. It has been, and will continue to be, our focus to balance the need for consistent core earnings and quality growth in such a way as to maximize long-term shareholder value. Cost control will always be a top priority at the Bank of Evansville, but not at the expense of prudent long-term investments in the people, products, systems and facilities required to remain competitive and provide outstanding client service. These types of investments may delay profitability in the short-run, but we truly believe they will result in a stronger, more viable bank for the community and a better investment for you in the long-term. Major initiatives for 2002 include: expanding our home mortgage origination capabilities, developing a strong corporate cash management program for business via the Internet, and initiating a merchant credit card processing service for local businesses. We believe these services will complement our strategic emphasis on small to mid-size businesses, help us secure additional deposits and increase non-interest income. Our growth and success to date has been significantly enhanced by referrals from our shareholders and clients. As we continue to aggressively seek quality banking relationships, any assistance you can provide by continuing to refer potential clients to us will be greatly appreciated. We invite you to attend the annual meeting of our shareholders where we will be sharing greater detail about your Bank with you and discussing our plans for the months and years that lie ahead. We sincerely welcome your comments and suggestions as well as the opportunity to thank you in person for your investment and the banking business you have placed with us. Respectfully,
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