PRESIDENT’S ANNUAL MEETING REPORT TO THE SHAREHOLDERS OF INTEGRITY BANK FOR BUSINESSNovember 9, 2022 Many of us recall the famous Latin question “Quo Vadis?” from movies and literature. “Quo Vadis?” means “Where are you going?” That simple question from our shareholders appears to be very appropriate for this meeting. Since we opened our Bank in May 2021, we have been in a whirlwind of change. First, we had to finish raising capital. At the same time, we had to complete many additional steps to customize our banking technology for our target business client prospects. Then, we had to begin in earnest our solicitations for these new clients. Simultaneously, we had to meet all of the many regulatory requirements for a new bank. Early this year, we had to deal with a rapidly rising interest rate environment in which the Fed Funds rate has increased 375 basis points with another increase expected to occur next month. In the month of October alone, the interest rate for 2-year Treasury notes increased 20 basis points. This volatility in interest rates causes us to change our deposit and lending strategies on the fly. You might think that our banking team is exhausted by all of this. Rather, we are energized by what we have accomplished so far and what we believe the future holds for our Bank. Let’s compare our financial results for the September calendar quarter of 2021 with the September calendar quarter this year. On September 30th of last year, we had assets of approximately $54.5 million, and we had a net loss of approximately $556,000 for the September 2021, calendar quarter. On September 30th of this year, we had assets of approximately $89 million, and we have reduced our net loss to approximately $113 thousand for the September 2022, calendar quarter. This net loss for the September 2022 calendar quarter is actually smaller than what we had projected in our original Business Plan two years ago. This comparison shows the dramatic financial changes taking place at our Bank. But that is only one half of the story. For an even bigger accomplishment, we have now determined the profiles of our best prospects for our customized banking services and have refined our banking niche. Just as importantly, we have also determined the profiles of prospects who are content for now with impersonalized banking services from much larger banks. As a result, we have become much more targeted and efficient in our current business development efforts while we catalog future prospects. Our Chief Development Officer, Neal Crawford, has best described who we are and what we do. According to Neal, Integrity is a private bank for business. Our entire lending and credit team is down one short hallway from my office. Our deposit banking team is down the other hallway in our front lobby. Decisions are made and banking services are rendered quickly, efficiently, and professionally. There are no departments, silos, or other operational barriers to our services. There is no “menu” for loans that limits our flexibility. Such is a private bank for business. Our challenge now is to institutionalize all of our best practices and procedures so that each new client receives the best service that we can offer. We are continuing to tweak our banking technology to provide the maximum flexibility and range of services to our business clients. Our continuing improvements in our services and technology are highlights of our days at Integrity. All of us aspire for Integrity to be the epitome of private banking for business. Before closing, I want to announce that Nancy McManuels has retired from our Bank as our senior operations and compliance executive. Nancy has been a source of great knowledge, strength, and stability for us as we progressed from planning to daily operations. I want to thank Nancy for her contributions to Integrity to place our technology, deposit banking, and compliance on sound footings for the future. Nancy has worked by my side for all three of my banks beginning in 1987. I coaxed her out of retirement to become the fifth member of our team. Nancy agreed to help me open Integrity but reserved the right to return to her retirement as soon as she believed that we were on the right track in her areas of responsibility. Integrity will miss her greatly, but I will miss her even more. Well done, my Friend. I began this report with the question, “Quo Vadis.” This report shows that we know where we are going and how we are going to get there. Thank you, Michael S. Ives
This 2022 Annual Report (the “Report”) and the other written reports and oral statements made from time to time by Integrity Bank for Business, a Virginia banking corporation (the “Bank” or the “Company”), its officers, directors, and authorized representatives may contain “forward looking statements” regarding future events and future results of the Company. Forward-looking statements can be identified by words such as “anticipates,” “estimates,” “intends,” “plans,” “goal,” “seek,” “believes,” “projects,” “will,” “expects,” “strategy,” “future,” “likely,” “may,” “should,” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations, and assumptions regarding the future of its business, future 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 many of which are outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those results indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Any forward-looking statement made by the Company in this Report or any other written or oral information or reports is based only on information currently available to the Company and speaks only as of the date on which it is made. The Company undertakes no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. |