There is no

1

• There is no Banking Crisis
• Commercial banks are holding their own
• Investment banks are the ones struggling and are
  the main contributors to the situations we see
  today
• Large insurance companies are finding tough
  times as well
• (As of October 7) A total of 13 commercial banks
  have failed in 2008, compared to 534 banks that
  closed in 1989 during the SL crisis
• Since 1995, ten or fewer banks have failed every
  year prior to 2008, a rate which remains at
  historically low levels

2

• Minnesota commercial banks are well-managed and
  well-capitalized
• Despite the slowing economy, banks in the United
  States posted 24.2 billion in earnings in the
  first half of 2008
• The banking industrys capital is at historic
  highs
• As of August 2008, the banking industry held
  1.35 trillion in capital, plus 144 billion in
  reserves, for a total buffer of almost 1.5
  trillion
• Commercial banks are well positioned to continue
  to help their communities grow and prosper

3

• Financial Rescue Package
• Will the rescue help commercial bankers?
• Yes, both directly and indirectly. By increasing
  the FDIC insurance coverage, we are giving an
  increased sense of security to our customers. The
  package also allows financial institutions that
  held preferred stock in Fannie Mae and Freddie
  Mac to treat losses from these securities as
  ordinary losses for tax purposes. Indirectly, we
  all stand to benefit from a stronger economy

4

• Financial Rescue Package (cont)
• How did this mess happen?
• Overextension and poor management decisions on
  the part of investment banks and predatory
  lenders
• Goal of rescue?
• Regain the confidence of the American public and
  strengthen the overall financial sector
• Commercial banks may not see an immediate return
  on the governments investment, but it should
  help to free up the credit market which will in
  turn help all of us

5

• FDIC Insurance Review Raising coverage to
  250,000
• Safety net for customers in the rare case of
  bank failure
• The increase is temporary (through December 31,
  2009). A permanent increase would require a
  separate act of Congress, something the new
  administration and Congress may consider in the
  coming year

6

• FDIC Insurance Review Raising coverage to
  250,000 (cont)
• Limit applies per depositorIf you happen to be
  in a position of having more than 250,000 in one
  bank, talk to your banker about ways to increase
  your insurance coverage
• The proposal to increase the FDIC coverage in
  the package was seen as something that turned the
  tide in favor of the measure passing the House
  and Senate
• The increase is not expected to result in an
  immediate, direct cost to banks, since the
  legislation explicitly prohibits FDIC from
  considering the increase when setting bank
  premiums

7

• Your Local Commercial Bank is Open for Business
• Encourage open communication between banks and
  bank customers
• Local deposits fuel local consumer and business
  lending and economic development
• Goal is to meet customers financial needs and
  build strong communities
• No one has ever lost a penny of FDIC-insured
  deposits