2009 Annual Report

Apple Bank for Savings remained one of the strongest depository institutions in the nation during 2009, a year marked by financial crisis for the country.  Apple Bank's balance sheet is comprised primarily of high-quality liquid securities and mortgage loans, and its capital ratios are among the strongest in the industry.  It has avoided investing in sub-prime and Alt-A mortgage products that have adversely affected many other institutions.  The Bank funds its assets with core customer deposits and capital rather than relying on borrowing in volatile capital markets.  97% of Apple Bank's loan portfolio is comprised of well-secured mortgage loans on residential, multi-family, and commercial properties in New York City and its suburbs and government-guaranteed commercial loans.  Like many other community banks, Apple's earnings were adversely affected by a very large increase in the cost it must pay for FDIC insurance, as well as by the effects of the Federal Reserve's low interest rate policy.  The Bank's careful attention to credit quality has allowed it to remain profitable throughout the present crisis.

Apple Bank has not sought or received any taxpayer funds in connection with government programs designed to support the banking system.

Highlights of 2009 include:

• Net income of $20.5 million
• Deposits of $5.9 billion
• Non-performing loans of only $3.0 million in a loan portfolio of $2.4 billion
• Total capital and reserves of $639 million
• Capital ratios that are substantially in excess of regulatory requirements.

Apple Bank is a state-chartered savings bank that traces its New York origins back to 1863.  It operates from 50 full-service branch locations in the metro New York area and is the third largest savings bank in New York State.

Financial Data as of December 31, 2009

*Apple Financial Holdings is the holding company that owns 100% of Apple Bank.

Disclaimer required by Part 350.4 (d) of the FDIC Rules and Regulations: This statement has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation.