Nexity Bank and WEBTRUST

Report by Management on the Controls over the Banking System
Based on the AICPA/CICA Trust Services Principles and Criteria
for Security and Privacy

To our valued customers:

We understand that for many of you, Nexity Bank is your first experience with Internet Banking. We understand you may be concerned about security issues, and about the confidentiality and integrity of your information being handled via the Internet. Nexity Bank would like to take this opportunity to assure you that we are committed to protecting your personal and financial information. We have the security, technology, and processes in place to protect your information while it is stored or processed inside our systems.

Furthermore, we are the first Internet-only Bank to earn the AICPA/CICA WebTrust Seal of Assurance.

Our Assertion

To earn this seal, we assert that during the period March 15, 2004 through March 14, 2005 we:

•Maintained effective controls to provide reasonable assurance that access to the Banking System was protected against unauthorized access (both physical and logical) and complied with our commitments regarding the security of the Banking System; and

•Maintained effective controls over the privacy of personal information collected by our Banking System to provide reasonable assurance that personal information was collected, used, retained and disclosed based on our commitments in the Nexity Bank privacy statement and complied with our commitments in the privacy statement.

Our financial auditors, Ernst and Young, LLP, periodically examine our information protection and security measures, and our privacy procedures to establish our continuing compliance with the AICPA/CICA Trust Services Security Criteria and Privacy Criteria.

Once you become a Nexity Bank customer, it is our goal to maintain a private and secure environment for your personal information.

David E. Long
President
Nexity Bank
March 15, 2005