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IN THE NEWS

While many local banks struggle with huge losses, Industrial Bank earns a profit in the third quarter of 2008 ranking 6th for local banks in profit gains.

Dear Industrial Bank Customers:

We all have been inundated with news coming from the financial markets in recent months and in particular, over the last couple of weeks. Wall Street investment banks have engaged in buying securities that are backed by individual subprime and other types of mortgages.  These mortgages are defaulting in record numbers and investment banks are finding themselves struggling to survive. Most of the problems are found in investment banks and not commercial banks like Industrial. The impact of the crisis is spreading, but community banks, again like Industrial, have been minimally impacted because of our prudent lending and investment practices.

Chris Gardner, whose life was portrayed in the movie, “The Pursuit of HappYness”, in an NPR interview on Fresh Air with Terry Gross, recommended that consumers put their money in community banks because of our current strength.  If you are interested in his comments you can listen to the interview online.

For years, many different types of lenders offered their customers subprime, interest only, option arm, stated income and many other types of mortgages that were inappropriate for the borrower. Many borrowers did not understand what they were signing or how those products worked. This practice resulted in a booming housing market based on a new segment of borrowers buying homes they otherwise could not afford. This seemed to be a good thing at the time, but many of these people simply could not afford the mortgage they were sold.

Industrial Bank does not offer these types of mortgages and does not have them on our books. Further, Industrial Bank does not sell products to its customers out of greed to make a profit, but to earn income from providing people what they need and want.

These are challenging times and certainly there is more risk in banking now than before. However, Industrial Bank is still well capitalized and earnings are up significantly from last year.  The Bank is stable and offers a clear safe alternative for customers who want to rest easy knowing that their money is secure. In addition we now insure deposits over and above the FDIC $250,000 coverage with our new CDARS product.

In times like we are seeing today, it helps to have been prudent yesterday. Thank you for your business and your continued support.

B. Doyle Mitchell, Jr.
President and CEO