CANTON, GA., March 20 /PRNewswire-FirstCall/ -- On March 18, 2009 the following letter was sent to Shareholders and Clients of Cherokee Bank, the wholly owned subsidiary of Cherokee Banking Company (CHKJ.OB).
March 2009 Dear Clients and Friends:
Given the anxiety caused by the unprecedented crisis in the financial markets and broader economy, I want to take this opportunity to assure you that Cherokee Bank is financially sound and well-capitalized.
Over the years, we have operated according to conservative banking principles, avoiding risky practices like subprime lending that turned out to be fool's gold. By adhering to a bread-and-butter approach to community banking, we are now in a better position to manage through the current recession.
To be sure, we still face serious challenges stemming from the collapse of the housing and real estate markets. Like most community banks in the Atlanta area, we have outstanding loans to real estate developers and builders. These were sound loans, properly underwritten, to creditworthy borrowers. Yet, some of these loans are not performing, putting a strain on the bank.
Rest assured, we have an experienced management team that has navigated rough markets before, and we have in place a risk management plan that deals head on with our challenges. In fact, when the market started to sour, we changed our mission from one focused on growth to one centered on safety and soundness in everything we do.
To that end, we have undertaken several initiatives aimed at ensuring that we remain a safe and sound institution. These include raising our capital over and above our current well-capitalized level, limiting our expenses, reducing our problem assets and making certain that we have adequate loan-loss coverage.
We know exactly which loans in our portfolio are problematic, and we are actively managing these assets. Also, we have set aside loan-loss reserves not only to cover expected losses but to protect against unexpected losses as well.
This risk management plan, combined with our ability to adapt quickly to changing conditions, is what is going to see us through this economic storm. The markets may not improve anytime soon, but our plan will ensure that Cherokee Bank remains financially sound and well-capitalized.
Thank you for your business and your ongoing support. Dennis W. Burnette President & Chief Executive Officer
Cherokee Bank is a locally owned and managed bank with over $200 million in assets.
