To All Our Valued Customers:

Our country’s economic woes continue to be a concern for many in our community. Issues on banking seem to appear in our national news almost daily. We want to take this opportunity, half way through 2009, to again assure you that we are maintaining a course action that will keep Border Capital Bank financially stable and sound. At the end of June the bank continued to maintain an Equity Capital to Assets ratio (an indication of a financial institution’s strength) at the 10% level. This remains among the highest in the Rio Grande Valley. Even though profitability is challenging for all banks in these trying times, we continue to generate revenues sufficient to maintain a loan loss reserve in excess of 1.5% of total loans. We believe a strong reserve, protecting the bank against possible future loans problems is most important in these trying economic times. As I have mentioned in the past, we know that our financial strength comes from the confidence and commitment we enjoy from our customers and local shareholders; and, our history of providing quality banking services to our local community.

We know that the McAllen area economy has been in a gradual decline since the first quarter of 2008 (www.mcallen.org/Business-Community/Economic-Pulse). We are grateful, however, that our local and Texas economies have not experienced the major problems that other areas of the country have had to face. We know that our economy will rebound in the future and we look forward to that future.

As I have said in the past, we take seriously our responsibility to provide a safe place for you to deposit your money. Recently increased FDIC coverage limits have been extended to 2013.

We realize that current market interest rates are low and that we must be competitive to maintain and attract customer relationships. We promise to continue to offer high quality personal service, market rates of return and loans to local individuals, and businesses that demonstrate sound character, solid credit and well thought out ideas. Again, with guidance from our local Board of Directors, this simple approach has served us well over the years and we’re confident it will continue to do so in the future.

Please contact us directly at 956-682-2265, if you have concerns, questions or just want to discuss these issues in greater detail. And, thank you for giving us the opportunity to serve you.

Joe Brown
President and CEO