Banking Operations Banking on Our Future 4 Banking behaviors continue to move beyond traditional bricks and mortar and your company intends to be well positioned to continue to deliver products and services that are  relevant and meet customer needs. This is the essence of You First Banking that has endured  for more than 100 years. By understanding how, when, and where our customers want to manage their money and their financial needs, we look to ways to structure and design our product and service lines to complement their behaviors and changing life styles. The Bank has and will continue to antici- pate and respond to the on-going shift in consumer preferences as demonstrated by our dynamic menu of electronic banking services, You First checking with customizing features to choose from, or our online behavior-based e-Vantage checking account for paperless checking that appeals to a growing base of technology-driven customers. The Bank plans to continue to extend our footprint throughout our trade territory with additional offices. We learn each day that it becomes more and more important to know our customers and understand how and where they want to do their banking. Continuing to know our customers on a personal level is important for two reasons: customer demand shapes our product and service offerings; and in this age of technology, that knowledge helps to foster  effective interactive communication. At the beginning of 2011, the Bank entered into the one hundred and first year of our  tradition of community banking. We have succeeded for more than a century because of the culture of prudent banking that has endured through four generations of the Bank’s directors, senior managers and team members. We will continue to serve our customers with our commit- ment to putting customers first with our unique brand of “You First Banking” that has garnered  a faithful consumer and small business customer base. Opportunities for gain on the sale of loans and investments were also taken advantage of during the year. Income from loan sales totaled $1.3 million, an increase of 10.9% over the prior year. These sales had the effect of decreasing the Bank’s exposure to interest rate risk as long term fixed rate loans were taken off our balance sheet. The sale of investment securities totaled $913 thousand, an increase of 24.1% over the prior year. These transactions enabled the Bank to manage cash flows from securities to shorten portfolio duration, reduce exposure to interest rate risk, and strengthen the Bank’s capital position. Income from banking operations including Wealth Management, the sale of loans, and gains taken on investments provide a valuable source of income that contributes to our bottom line. Our Wealth Management Group’s growing reputation for personal service and investment  performance has resulted in increased penetration of its target market with positive results.  Assets under management at year-end totaled $238.5 million, an increase of $15.8 million  over the prior year. As a result, Wealth Management income for the year totaled $1.2 million,  an increase of 24.9% over the prior year.