Letter from President and CEO, Robert M Jara

Dear Customers, Shareholders, Employees and Friends:

         The past twelve months have borne witness to extraordinary events for our economy, our industry and our region. Developments and insecurity relayed in newspaper and online articles about banks are perhaps causing you uneasiness as a depositor, shareholder or employee of First CornerStone Bank. As President and CEO of the Bank, I would like to share some thoughts on these issues to better communicate the efforts and health of our Bank.

         In the wake of the worst financial crisis in recent memory, the landscape of the financial industry has changed swiftly and significantly. The combination of asset de-valuation, increased loan losses, and more stringent capital standards, has impacted many small lending institutions, nationally and within the Greater Philadelphia Region. Where other banks retreated from lending early in the economic downturn, FCSB continued to conservatively support our long term business customers in an effort to help them survive the downturn. While in many cases our support was the much needed lifeline, the Bank has experienced more cases than expected of local borrowers unable to honor their obligations as commercial real estate values and business revenues drastically declined.

         As the Bank approaches its ten year anniversary, we have grown from a small de novo bank to a financial institution with over $223 million in total assets, $175 million in loans and five branch locations. First CornerStone meets and exceeds all FDIC requirements to be an adequately capitalized institution. As we enter a new decade, our Board of Directors and major shareholders have developed a plan to further strengthen our balance sheet and enhance our capital base. These improvements will be accomplished through prudent management of our loan portfolio, bolstering our reserves and relying upon our many dedicated employees. From identifying multiple options for our local business customers feeling the effects of the economy to maintaining a slow, steady growth plan, the Bank is dedicated to providing a long term return to all stakeholders.

         Community banks have long been an essential resource for small businesses to fund growth or maintain stability. In the second quarter of 2009, banks with assets totaling less than $1 billion accounted for nearly 50% of all small business lending. On the other hand, larger financial institutions with assets totaling $100 billion or more (the largest benefactors of federal government rescue efforts) accounted for 22% of all small business lending. Community banks, like First CornerStone Bank, play an integral role in supporting the small businesses that employ nearly 50% of our nation's workforce.

          I wish all of our customers, shareholders and employees a prosperous new year. I sincerely thank you for your past, present and continued support of this Bank and our mission. First CornerStone Bank will continue to be Your Bank of Choice.

Sincerely,

Robert M Jara