MOLB, This bank is rolling! Another good quarterly

MOLB, This bank is rolling! Another good quarterly report will probably send the pps past the five buck level and beyond.

February 18, 2014

Dear Shareholder:

It is with mixed emotions that I announce the resignation of one of our founding Directors.  As you likely are aware, Kate Powell Segerstrom was recently appointed Superior Court Judge by Governor Brown. While we congratulate Kate on earning this distinguished appointment, we regret that it precludes her from continuing as a member of the Bank’s Board of Directors. On behalf of her fellow Directors and the entire staff of Mother Lode Bank: For more than ten years of dedicated service - Kate, we sincerely thank you.

As for the Bank’s performance during calendar year 2013, I am pleased to report achievement of annual profitability for the first time in our history with positive earnings of $162,300. As reported in our previous shareholder letter, earnings in large part were captured from gains on securities sold. We again extend our appreciation to you our shareholders and our community.  Without your support from new deposit growth we would not have been able to realize earnings from these investment securities.

Our foothill community’s economic data continued to reflect improvement in 2013 albeit slight when compared to statewide improving conditions. For Tuolumne County, single family residential values for the period ending December continued to reflect improvement. Median sales price was up 17% over year end median of $166,000 for 2012. While current economic data is clearly not robust, we welcome improving trends and remain cautiously optimistic for 2014.

For the period ending June 30th 2013 we reported improvement in Sub-standard loans and Other Bank Owned Real Estate. We are very pleased to report ongoing progress in reducing our Sub-standard and Other Bank Owned Real Estate assets -  now  reflecting a decrease of over $2.3 million, or a 48% improvement when compared to fiscal year end 12/31/12.

As you know we have consistently reached out to our shareholders and community asking for your referrals of friends and neighbors enabling us to deploy deposit funds into loans which provide improved earning opportunities.  We are pleased to report that, during the quarter ended December 31, 2013, we realized total performing loan growth of 7.27% or $2.6 million. While this is partially attributed to opportunities presented from outside our immediate community, we look forward to additional opportunities in our market area that will allow this positive trend to be sustained.

Finally, I am extremely pleased to report the addition of Dennis A. Reed as Senior Vice President and Credit Administrator. Mr. Reed brings over thirty-five years of community banking experience and is a welcome addition to the Mother Lode Bank team.

In closing, our directors, management and staff extend our sincere gratitude for your business and for the confidence that you have placed in us.  We continue to look to each of you for referrals of your friends, neighbors, and business associates to Mother Lode Bank.

We are your community bank and we are here to serve you.