TO OUR VALUED WOODTRUST CUSTOMERS
On the heels of the recent Silicon Valley Bank and Signature Bank failures, depositors and bank customers across the U.S. naturally have questions about the safety, soundness, and management of their own banks in the wake of these events. These failed banks operated with an inappropriately low level of liquidity and had taken extra risk in their bond and loan portfolios during the past number of years, reaching for additional earnings when interest rates were historically low. The increases in interest rates by the Federal Reserve in the last year exposed this underlying situation and elevated level of risk, leading to failures from insufficient liquidity. Bank failures have happened before and they will happen again, so we feel it is important to communicate with you about how WoodTrust is positioned differently and why your deposits are safe.

THE WOODTRUST DIFFERENCE
As a family-owned and operated bank, it is our own capital at risk and that fact alone leads us to be more conservative than our peers in the management of the company. We think for the long term (decades, not months or years) and understand there will always be times of stress ahead – and we fully appreciate we will never know the timing or the actual spark(s) that will create the stress event. We work not to predict the future, but rather to always prepare for the unknown.

WoodTrust has operated in a steady manner since 1891 and has successfully navigated every conceivable boom, bust, and panic situation, and our family owner/operators have been responsible for the management of the business since 1980. Over the last 43 years, we have been very conservative in the management of the bank and always lean towards sacrificing short-term earnings for the benefit of long-term safety, liquidity, and the protection of customer funds. We will always treat your assets as if they were our own.

So, what specifically does it mean to run a “conservative” bank? It means we never want to put our customers, associates, or shareholders in a negative situation that cannot be weathered or where the future of the bank is placed in the hands of a third party, such as a regulatory agency. That is why we place great emphasis on: (1) striving for the highest regulatory ratings; (2) being well-capitalized; (3) operating with much greater-than-normal liquidity; and (4) maintaining prudent diversification in business lines, deposit customers, and loan customers.

At WoodTrust, we have a simple business model where we safeguard the deposits of family, friends, and neighbors in our communities and we provide loans to local businesses and individuals to help them create employment, buy homes, and enhance their lives. Through our WoodTrust Asset Management division, we prudently manage money for businesses, individuals, families, and non-profit organizations in over 35 states, resulting in an extremely diversified business model. You can sleep soundly knowing we have your best interests in mind and that we manage a conservative banking enterprise that will be around for decades to come.

If you have any questions or concerns about the current environment, please reach out to your primary WoodTrust contact. We will answer any questions you have and we are enormously appreciative of your continued business and confidence.

Sincerely,

Steve Bell, Chairman

Chad Kane, President