October 9, 2008

Dear Valued Customer:

You can hardly watch the television, listen to the radio, or have a conversation without the topic of our country’s financial crisis being the focus. And while such matters sometimes seem “a million miles away,” this crisis affects all of us in some way here in our own communities. Investments tied to the stock market are in decline, businesses are tightening up their operations, and consumers are cutting back on their non-essential spending as our cost of living continues to increase.
 
I hope a bright spot in this seemingly gloomy outlook is in the relationship that you have with First State Bank.

As an independent community bank, First State Bank is committed to serving you in a sound and responsible way. For more than 75 years, it has been our philosophy to invest in the individuals, families, and businesses that live and work in the communities we serve. We pride ourselves in knowing our customers. Our sound lending practices encourage borrowers to make good decisions that will help them avoid overextending themselves. If you have deposit accounts at First State Bank, you can take comfort in knowing your dollars are invested in loans made right here at home.

Please also know that First State Bank’s capital base is very strong. Capital is funds that we hold in reserve not only for future growth opportunities such as new loans in our communities, but to help us weather financial storms such as the one we are experiencing today.

And with the recent approval of the Emergency Economic Stabilization Act, your deposits at First State Bank are now insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per ownership category through December 31, 2009. Please know that no FDIC insured depositor has lost a penny of principal since its inception in 1933, which is a very good track record. (If you haven’t already done so, please come in and talk to your Relationship Manager to make sure your deposits are fully insured.)

Even with all of these assurances, I know you may still have some questions and concerns about your financial relationships at First State Bank. Whether you are concerned about your deposits, are finding it difficult to keep up with your loan payments, or just would like to understand more about the safety and soundness of First State Bank, please be sure to come in and talk with us. Additionally, we continue to make loans to qualified borrowers, so please be sure to see us if you need financing for fall home improvements, buying a new home, or other needs.

We sincerely appreciate your business and are here to help you during these difficult times. I encourage you to contact your First State Bank Relationship Manager if you have any questions or concerns. Or to reach me directly, please call (920) 982-2075 ext. 2816.

Very Truly Yours,

Harry A. Radix
President & CEO