PRESIDENT’S REPORT

            In a year in which the United States financial system experienced its most significant financial storm since perhaps the great depression of the 1930’s and the
year-long economic recession showed signs of prolonging itself and even deepening, Elizabethton Federal Savings Bank managed to weather the event and emerge with a solid performance and enhanced capital position.  Whereby many large financial institutions experienced losses and diminished capital bases, Elizabethton Federal was able to earn a 1.073% return on average assets and a 4.24% return on equity.  In a period where once again capital became king, Elizabethton Federal was able to increase its net worth by more than three million dollars and reach a total net worth amount of $88,212,572 on December 31, 2008.  This allowed us to increase our equity (or capital) ratio to 26.42% of total assets – a ratio that places the savings bank in the top five percent
(some analyst even insist that we are actually in the top two percent) nationwide in capital adequacy of all thrifts.  The remarkable fact concerning our capital level is that Elizabethton Federal remains a mutual savings institution, whereby, we are owned by our depositors (not Wall Street investors).

            As we enter a year filled with many economic challenges, we can affirm that Elizabethton Federal Savings Bank has never been in a stronger financial position that we are at present.  As we enter our seventy-second year of operation we are poised, as always, to meet the financial needs of our customers in the region in which we serve.

Shirley G. Hughes, President/CEO
Elizabethton Federal Savings Bank