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Letter from the President

David Kingland

Dear MBT friends:

As I write this letter, we are in summer weather, uncertain markets and news dominated by the BP oil spill. These are also very interesting times in the financial world.

Investors are nervous about the stock market which has fallen back after a large recovery in 2009 and early 2010. Interest rates continue to be near historically low rates. Most people feel rates are going up – but nobody knows when. From what I read, it appears as though interest rates will not change much in 2010 and possibly not in 2011 either. There is too much concern that increasing rates will stop the economic recovery.

One economic indicator that is not mentioned much lately is the rate of inflation. It has been very low for the past 24 months. The real rate of return on your money is the difference between your return on investment and the inflation rate. Years ago, you could get 10% on a CD, but the inflation rate was 9%. Your real rate of return was 1%. Today, if you get 2.5% on a CD and the inflation rate is 1.5% your real rate of return is still 1%.

The last few years have shown that more then ever, it is important to be diversified in your investments, whether in IRAs, 401k, or other investing. The balance of risk and reward are very important and change, as we get closer to retirement. Talk to your MBT bankers and MBT Investment advisors about your financial plans.

Mortgage rates are still close to historic lows. It is a great time to buy or make home improvements. It is a “buyers market” out there!

Our Ultra Checking account continues to be very popular. We open new accounts daily. It is an electronic account, totally free, that pays CD-like rates. Our Personal Bankers are ready to explain how this great account can benefit you.

David Kingland
President and C.E.O.