Text Box: Dear Northwest Commercial Bank Shareholders, As was mentioned at last year’s stockholder meeting, the bank experienced a defalcation in December of 2010. This created several issues, including unanticipated additional loan losses and expenses which had to be dealt with in the last quarter of 2010 and into 2011. The bank is well capitalized and we were able withstand the temporary damage done. We did receive $813,000 from our bonding company in the fourth quarter 2011 to offset those losses. As a result we were able to reduce our loss for 2011 to $144,000. The pre-provision net income for 2011 was $646,000 as compared to $36,000 in 2010. This reflects our ability to generate income before loan loss expense, which hopefully we have controlled going forward. We anticipate some additional, but more limited funds from our bonding claim in the next several months. Loan demand continued to be weak during 2011, and this also impacted our results. The good news is that we have seen an uptick in loan activity in the early weeks of this New Year. We are also pleased that our asset quality has stabilized over the last couple of quarters and we are able to report improvements in our non performing assets. Bank capital ratios are strong as of December 31, 2011 they were: Tier 1 leverage ratio: 10.66% Tier 1 risk based ratio: 14.00% Total risk based capital: 15.25% Loans, net of reserves, were $56,463,000, as of December 31, 2011, compared to $57,775,000, a $1,312,000 decrease over September 30, 2011. Assets totaled $75,091,000 compared to $ 76,306,000, a $1,215,000 decrease over September 30, 2011. Deposits totaled $66,048,000 as of December 31, 2011. This compares to $67,285,000 for September 30, 2011 or a decrease of $1,273,000. Our primary focus for 2011 was to concentrate in strengthening our balance sheet, primarily improving our asset quality. This caused us to be more inwardly focused during 2011. For 2012, we will not only continue improving asset quality, but also start work on growing the bank again. We believe that earnings should improve as a result of these efforts. As always, we thank you for your support. Please continue to refer your friends and neighbors to your bank. Sincerely, Kurt Graff CEO/President