TO OUR GOOD FRIENDS,

2004 was a good year for banks in general and for Jefferson as well. Year-end assets increased by 10.2% to $719,750,194. The 3.8% improvement in earnings (to $6,901,140) was hampered by expenses associated with the opening of our new branch in O'Fallon, as well as a substantial reduction in mortgage loan fee income. The O'Fallon facility has been open for five months and deposits there exceed $20 million. We have great expectations for this branch located within a high growth and development community.

In last year's message, I mentioned that we are witnessing a "merging of the merged" and that trend continues unabated. One consequence of this seems to be a proliferation of start-up banks appearing on an almost weekly basis. The viability of these new banks is based on the premise that clients will never tire of switching from old to new banks and we believe that the foundation of that premise may be beginning to erode. What does not erode, however, is the continuity, quality of service and experience of the bankers at Jefferson Bank.

If you are not now a customer, we are as near as your phone and you are cordially invited to call – and a real person will answer. And for all of our customers, a continuing thank you for your business.

Sincerely,

Michael J. Ross,
Chairman of the Board