Dear Shareholders and Friends:
We were thrilled to report $1.6 million in earnings for 2007, but we are even more excited to report that for 2008 earnings increased 52% !!! to $2.5 million. This reported net income is after paying $1.2 million in taxes and allocating $918,000 to the provision for loan losses.
In 2008, assets of the bank increased 24% to $390 million, up from $314 million on December 31, 2007, while loans grew to $356 million, up 27% from $280 million. Management's decision to not make or invest in sub prime loans has positioned us to focus on new business and improved products and services for our customers instead of working out troubled loans. Over 99.6% of our loans are paying as agreed and average net charge-offs for the last five years have been less than $28,000 per year.
We will remember 2008 as a year of turbulence in the financial markets. In central Pennsylvania this turmoil will be increased for other banks and become an opportunity for Integrity bank when Wells Fargo, the 5th largest bank in America acquires Wachovia; Sovereign Bank is now 100% owned by a foreign company; Citizens is controlled 60% by the British government; Fulton Bank will attempt to recover from a $102.3 million loss in the fourth quarter of 2008; Commerce Bank will become Metro Bank with head-quarters in Philadelphia and Harrisburg, and will commit resources to build branches in London, England.
At Integrity we're excited about meeting the 2009 challenges and building upon our strong financial base that has given us unparalleled performance while growing our local community presence.
Integrity had a banner year in 2008 and we hope to have another outstanding year in 2009. As most of the stock market plummeted, our outstanding performance rewarded our shareholders. Integrity Bank stock as of 1/1/2008 was selling at $22 per share and as of 12/31/08 the price was $25 after paying a 5.00% stock dividend. This equates to an unadjusted price per share of $26.50; a 20% return to our investors.
I want to give special thanks to the directors and staff for making 2008 an unbelievable success in a very difficult year.
I believe there are two types of customers: those who bank with Integrity and those who need to. If you're in the first group, thank you. If you're in the second group, call me personally and let me introduce you to More. Faster. Better. banking.
WHAT A RIDE!!!!
James T. Gibson