TO OUR VALUED CUSTOMERS:

Throughout the month of September and early October, the level of turmoil, change and confusion within the financial services industry reached an unprecedented level as bank failures, mergers and acquisitions, U. S. Government intervention and bail-outs dominated the headlines. I want to reassure you that First Priority Bank is sound, strong, well capitalized and growing.  We continue to seek opportunities to expand our business, and we are actively lending money to qualified borrowers and increasing our customer base.

The recently announced sale of Wachovia to Wells Fargo and Sovereign to Banco Santander will most likely have a disruptive impact in our marketplace. We believe, however, that the $700 billion U.S. Government bail-out bill, which includes capital infusions in many banks, will have a positive and settling effect on the credit markets over time.  In the meantime, smaller community banks including First Priority continue to loyally serve their customers and are “here” for you. It is of utmost importance at times like this, that your Bank is sound, provides you with the level of service you expect, and maintains its loyalty to you.

It is also extremely important that you are aware of the changes in FDIC insurance levels which were approved with the recent government legislation. Please note that each separately titled deposit account is now insured up to $250,000.  Also, coverage can be significantly increased by titling accounts with family members. As an example, a married couple can have FDIC insurance coverage up to $1.5 million and a married couple with two children can have coverage up to $2.5 million through appropriate titling of their deposit accounts. Individual IRA’s continue to be insured up to $250,000. These increased insurance levels are effective through December, 2009.

We believe these actions were not only necessary but long overdue. If you would like more specifics about how to achieve the most FDIC coverage for your accounts, please do not hesitate to call any of our Branch offices (the numbers and locations are enclosed) or call me directly. My email address is desparks@fpbk.com and my phone number is 484-527-4006.

Our staff at First Priority has many years of banking experience and we sincerely appreciate your business and your loyalty. We are here to help and serve you, and as a customer of First Priority Bank, you will never be ignored or forgotten. Thank you again for your business.

Sincerely,

David E. Sparks
Chairman & Chief Executive Officer

October 22, 2008 

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