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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 here.
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
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