is evidence of the Bank’s tightening of credit standards, as well as emphasis being placed on other types of loans.

     As the Company looks to the future, we realize there will be both abundant challenges and opportunities. The pressure on our net interest margin is our foremost challenge. Our Bank, as well as nearly all banks, derives most of its revenue from the interest spread between what is paid to depositors and charged borrowers. Competition from banks and non-banks has whittled away at this spread. Though competition is good, it must be noted that much of our competition is free of the regulatory yoke and tax burdens borne by the banking industry. A mere leveling of that regulatory playing field would dramatically help banks. While your Company is actively addressing the issue of net interest income, it also has invested capital and human resources in the diversification of its revenue stream. Most notably among the non-interest income entities is the Trust Department. During 2000, its income jumped nearly 30%, and its assets under