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Shareholder News

 
The Prospector
 

August 10, 2012 

Dear Shareholder:

As you will recall in our previous letter we were pleased to report a small profit for period ending March 31, 2012. I went on to report that “while marginal improvement is noted, we continue to look for stabilization of real estate values.”

Although we looked forward to continued positive earnings for the second quarter of 2012, the Bank’s earnings have again been negatively impacted by decreasing commercial real estate values within our foothill communities.

Reported as of June 30, 2012 is a year to date loss of $311,000. This loss is due to our required recognition of reduced values for real estate we hold as collateral for loans on which borrowers have chosen to default. While these defaults have a negative impact on earnings, your Board of Directors and management team continue to work diligently toward our goal of sustained profitability.

On a positive note, I am pleased to report single family residential sales have finally reflected improvement during the first half of this year. As reported, stabilization of real estate values in our foothill communities is critical to restoring economic health to our region. We look forward to continued improvement in real estate values in the coming months.

I am pleased to report continued growth in core deposits accounts (Checking & Savings) of over $6.7 million when compared to June 30, 2011. We sincerely thank you our shareholders and community for your tr ust and confidence in Mother Lode Bank.

We continue to seek lending opportunities and ask your help!

If you hear a friend, neighbor, relative or business associate mention they are in need of financing – please send them our way!

We recently bid farewell to our Chief Credit Officer, Robert Daneke. For 5 ½ years Mr. Daneke commuted weekly, living away from his family during the workweek. He has accepted a position much closer to home and, while we will miss the many key attributes he brought to Mother Lode Bank, we wish Mr. Daneke all the best. The search for his replacement is underway; and in the interim we are taking the steps necessary to ensure diligent management of our loan portfolio.

While this economic cycle has been one of the longest downturns ever, your Board, Management, and outstanding Staff remain committed to serving the financial needs of our community.

With your support as shareholders we will continue to meet the challenges ahead.

Sincerely, Charles W. Milazzo - President & CEO

 
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