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February 6, 2023

Dear Fellow Shareholders,

At our Annual Meeting in November, I asked the famous question, “Quo Vadis?” for our Bank which is Latin for “Where are you going?” Perhaps, the better question is “Where are we going together?” Either way, this question is so appropriate for our Bank, and I will try to provide you with further direction for Integrity.

We tell our clients and prospects that Integrity is a Private Bank for Business. This simple phrase encompasses all that we offer:

       1.   Direct access to our senior management;
       2.   Unequaled deposit banking services;
       3.   Lending decisions made locally and knowledgeably by senior management; and
       4.   Deposit and lending services customized for the specific needs of our clients.

There is one facet of our deposit banking services that I wish to bring to your attention. A significant part of our deposit accounts transition for a new client is our analysis and recommendations to improve the security of the client’s banking procedures. We try to identify and educate the client’s team on specific banking security risks and make recommendations to eliminate or limit these risks. When appropriate, we make recommendations to the client for layered employee access and transaction capabilities to improve security without sacrificing efficiency. This is but one of the many deposit banking services that distinguish us from our banking competitors, both large and small.

In addition, unlike many community banks, Integrity maintains a high level of liquidity. On December 31, 2022, Integrity had approximately $16 million in cash and on deposit with various financial institutions and had unpledged highly marketable United States Treasury securities and “plain-vanilla” mortgage-backed securities of approximately $13 million for total short-term liquidity of approximately $29 million. With these resources, Integrity handles multimillion-dollar transactions regularly and without ado. This is the essence of a modern business bank focused on sophisticated clients with large financial resources.

We are moving toward profitability but have not yet reached this short-term goal. For the calendar quarter ending December 31, 2022, we had a net loss of approximately $60,000. We expect that net losses will continue for several more calendar quarters as we add more employees and manage the impact of the current interest rate environment on our Bank.

Following our deposit balances one quarter to the next may be challenging for you. One of the characteristics of a true business bank is the seasonality of its deposits. Often, business and trust clients accumulate funds in their accounts over the course of the year and then disburse significant portions of these funds in December to the owners and employees of our business clients and to the beneficiaries of our trust clients. Integrity is no exception to this as we experienced these types of distributions in December from continuing clients. Typically, the balances in these client accounts grow back the following year for distributions in December of that year. We expect this process to recur at Integrity in future years from our routine deposit banking operations.

The evolution and focus of our Bank are progressing. We have the most success with business client prospects who are thoughtful about their businesses and therefore thoughtful about their banking relationships.

For dynamic growing businesses, all banks are not the same. Instead of call centers indifferent to business clients, we offer direct access to senior management with the ability and authority to make things happen quickly and efficiently. Instead of remote credit departments that act slowly, we offer local lending decisions made promptly and knowledgeably by senior management with the authority to act on their word.

Independence, knowledge, experience, responsiveness, and competence are the hallmarks of Integrity. This is the Bank that we designed two years ago, and this is the Bank that we have become.

Mike Ives
President and CEO
Integrity Bank for Business


The above letter from the CEO of Integrity Bank for Business (the “Bank”) may contain “forward looking statements” regarding future events and future results of the Bank. Forward-looking statements can be identified by words such as “anticipates,” “estimates,” “intends,” “plans,” “believes,” “projects,” “will,” “expects,” “may,” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance, but are based only on the Bank’s current beliefs, expectations, and assumptions regarding the future of its business, plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and outside of the Bank’s control. The Bank’s actual results and financial condition may differ materially from those indicated in forward-looking statements, and therefore you should not rely on forward-looking statements. Any forward-looking statement made by the Bank is based only on information available to the Bank as of the date on which it is made, and the Bank has no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.

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