Industry Letter

Implementation of Community Deposit Program

June 26, 2008

To the Institution Addressed:

Re: Implementation of Community Deposit Program

The Office of the State Comptroller, in conjunction with the New York State Banking Department, will begin accepting applications from local banks for participation in the Community Bank Deposit Program. Under the Program, the State Comptroller and the New York State Department of Tax and Finance are authorized to deposit funds under their control into local banks in order to enhance economic development in their respective communities. The Program was expanded by legislation enacted last year to include nationally chartered banks whose principal offices are located in New York State allowing a greater number of banks whose roots are in New York State to participate in the program.

The purpose of the program is to deposit State funds into local banks to help New York State obtain the economic benefits and stimulus which result from the placement of deposits in local banks. Participating banks will be assessed based on their demonstrated history of meeting community needs, as measured by their home mortgage, small business, small farm and community development lending. It is expected that banks receiving such deposits shall use these funds to stimulate local economic development.

The deposits, up to $10 million per institution, will be made in the form of six month Certificates of Deposit. The rates on the certificates will be set on a bidding basis with the minimum rate equivalent to the current six month Treasury Bill rate. The maximum amount of funds that the Comptroller can deposit under this program will not exceed $250 million.

If your bank wishes to participate in this program, you must submit an application to the Banking Department who will review the application and then submit it with their recommendation to the State Comptroller. After the application has been reviewed and approved by the State Comptroller’s office, your bank will be added to the approved list of banks who may participate in the program.

Copies of the application are available on the Banking Department’s Web site at www.banking.state.ny.us/cbdp.htm For more information and a copy of the program guidelines, please contact Donna Benson at the Office of the State Comptroller at 518-474-7701 or Deputy Superintendent Martin D. Cofsky at the New York State Banking Department at 212-709-1552.

Sincerely,