Quarterly Letter to the Shareholders
Dear Castle Bank Shareholders,
Net Income for the 3rd quarter of 2002 rose 87% to $97,363 compared to the 3rd quarter of 2001, primarily due to the net interest earned from the Equity Enhancement arbitrage we executed in March of this year. Year to date Net Income is $239,408, slightly ahead of the 1st nine-months of 2001, which included significant gains on sales of securities.
Assets grew to $72,209,977 as of 9/30/02 from $48,952,177 a year earlier, again due in great part to the $20MM Equity Enhancement Plan. This strategy assumes slow growth of total assets over the next few years as we replace the amortizing assets (mortgage backed securities) and liabilities (FHLBB advance) which make up the arbitrage with higher earning loans and core deposits. While we do so, we will continue to reap the added net interest provided by the arbitrage. Our loan portfolio grew to $16,377,395 from $13,192,869 as of 9/30/01, and deposits grew to $32,882,737 from $26,247,493 as of 9/30/01.
During the 3rd Quarter, we were reviewed by the FDIC and received a very satisfactory report. As a result, we will now be on an 18-month review cycle, instead of the annual review for new banks.
Castle Bank and Trust continues to provide leadership in economic development efforts in the community. At our Quarterly Economic Luncheon in October, the Bank hosted the leadership of the Meriden Economic Development Corp. (MEDCO), the Meriden Economic Resource Group (MERG), the Chamber of Commerce, City officials and our state legislative delegation to discuss the future organization of the City Center Initiative, a major revitalization effort. Our guest speaker was the Assistant Director of the Norwalk Redevelopment Agency, who outlined the organization and success of the South Norwalk revitalization effort.
We continue to work hard to build a profitable community resource for central Connecticut. Your support is appreciated.
Lawrence M. McGoldrick
President and CEO
Wednesday, October 30, 2002
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