To Our Valued Customers:

Needham Bank has witnessed a number of poor economies in its history and as we enter our 117th year the present economic conundrum is at historic levels.  The world of banking has changed forever.  It is not business as usual and time will tell when it will eventually settle to a more moderate business climate.  Our customers should take comfort that Needham Bank has the staff, the products and services and the work ethic to not only survive but to excel.  Our $178M net worth, far above the industry average for a bank our size, provides significant protection to our customers.

Unfortunately, in discussing the cast and complex banking issues, the term "banks" is used very indiscriminately.  The egregious acts of high risk and greed were originated on Wall Street, not Main Street.  Disillusioned consumers continue to seek out strong community banks in their "flight to safety".  We strongly believe that a well run, strategically positioned community bank can thrive in this economic environment.  Our numbers back this up.  In 2008, Needham Bank experienced asset growth of 30%, loan growth of 34% and deposit growth of 33%.  Clearly, people are choosing Needham Bank over megabanks and Wall Street financial alternatives.

Based on the favorable reviews, our staff and customers have expressed their pleasure with the completed renovations at both our Dedham and Wellesley Offices.  While we are not quite complete with our Westwood Office renovations, the interior work and new drive-up teller window is shaping up nicely for a summer completion date.  The entire staff is counting the days for the opening of the new Loan Center at Eaton Square next to the Main Office this October.  We believe that a bank that has an attractive welcoming feeling as one approaches and enters, results in a positive first impression.

Our desire is to be the modern version of the "olde time" community bank.  As we continue to improve the physical aspects of our offices, we are also constantly researching, testing and analyzing new products and services.  Once perfected, these new products and services will be delivered by a well trained, accommodating staff.

We believe that with enhanced products, superior service and steadfast customer relationship building, the Bank can continue to set a high bar for our competitors.  Please be assured that as we move through the remainder of 2009 the Bank will persist in embracing the mantra "all business is personal."

Sincerely,

John (Jack) W. McGeorge
President