Central State Bank

A fundamental, long-term goal is to grow the Bank’s total assets and pre-tax profits 10% or more annually. However, CSB will not sacrifice quality while expanding its asset base.

Operations have been very profitable, particularly in terms of return on total assets (ROA). A strong capital base has been maintained with equity equal to 16-17% of total assets. The latter was approximately $113 million on June 30, 2008.

During 2001 and 2002, CSB achieved the highest ROA among Iowa banks – either “S” or “C” corporation institutions. In 2003, the Bank’s ROA was among the top 15 “S” Corp. Institutions. Since 1997, the Return on Assets has been consistently among the top 10% of all Iowa banks. That remains an important goal going forward.

CSB has experienced superior growth during recent years while achieving its goals in terms of profitability, return on assets and asset quality. Specifically, CSB’s total assets have risen from $39.4 million on December 31, 2000 to approximately $113 million on June 30, 2008. During that period, capital increased from $7.7 million to almost $17 million and total loans rose from $19.9 million to $80+million.

These results reflect in part targeted development efforts in Central Iowa, and marketing initiatives focused on high net worth clientele and privately held organizations located in the Iowa City-Cedar Rapids, Des Moines, and other selected geographic markets.

Future Growth Initiatives
CSB has identified opportunities within its immediate, core market that should support further growth in assets and pre-tax profits, while allowing the bank to maintain targeted profit margins. In addition, acquisitions/affiliations within the Central Iowa market will be pursued if they support our fundamental strategic objectives, help expand “critical mass” and can be completed on reasonable terms.

We are developing complementary avenues for profitable growth that will help achieve our operational and financial goals over time. Creation of an active website, expanded utilization of the internet, including on-line banking in 2005 is one example.

To illustrate our efforts in “strategic partnering,” we have worked closely with American Trust and Savings Bank to initiate several commercial loans involving new credit facilities of $2 million to over $9 million. Such initiatives will continue where attractive and appropriate for all parties. As a result, we have expanded our ability to initiate and participate in selected, larger lending opportunities. This has also developed and expanded client relationships in the process.

With a solid equity base, growing income and quality operating assets, CSB is well positioned to raise additional core capital, if necessary.





	Recent Operating Results/Balance Sheet and Capitalization A fundamental, long-term goal is to grow the Bank’s total assets and pre-tax profits 10% or more annually. However, CSB will not sacrifice quality while expanding its asset base. Operations have been very profitable, particularly in terms of return on total assets (ROA). A strong capital base has been maintained with equity equal to 16-17% of total assets. The latter was approximately $113 million on June 30, 2008. During 2001 and 2002, CSB achieved the highest ROA among Iowa banks – either “S” or “C” corporation institutions. In 2003, the Bank’s ROA was among the top 15 “S” Corp. Institutions. Since 1997, the Return on Assets has been consistently among the top 10% of all Iowa banks. That remains an important goal going forward. CSB has experienced superior growth during recent years while achieving its goals in terms of profitability, return on assets and asset quality. Specifically, CSB’s total assets have risen from $39.4 million on December 31, 2000 to approximately $113 million on June 30, 2008. During that period, capital increased from $7.7 million to almost $17 million and total loans rose from $19.9 million to $80+million. These results reflect in part targeted development efforts in Central Iowa, and marketing initiatives focused on high net worth clientele and privately held organizations located in the Iowa City-Cedar Rapids, Des Moines, and other selected geographic markets. Future Growth Initiatives CSB has identified opportunities within its immediate, core market that should support further growth in assets and pre-tax profits, while allowing the bank to maintain targeted profit margins. In addition, acquisitions/affiliations within the Central Iowa market will be pursued if they support our fundamental strategic objectives, help expand “critical mass” and can be completed on reasonable terms. We are developing complementary avenues for profitable growth that will help achieve our operational and financial goals over time. Creation of an active website, expanded utilization of the internet, including on-line banking in 2005 is one example. To illustrate our efforts in “strategic partnering,” we have worked closely with American Trust and Savings Bank to initiate several commercial loans involving new credit facilities of $2 million to over $9 million. Such initiatives will continue where attractive and appropriate for all parties. As a result, we have expanded our ability to initiate and participate in selected, larger lending opportunities. This has also developed and expanded client relationships in the process. With a solid equity base, growing income and quality operating assets, CSB is well positioned to raise additional core capital, if necessary.