A TALK WITH THE CHAIRMAN & CEO

IT’S ALL ABOUT TRUST

FCB FOUNDATION

A VACATION RIGHT INYOUR BACK YARD

ADMINISTRATIVE OFFICE 117 Prospect Street • Stamford, CT 06901 • (203) 462-4200 • www.firstcountybank.com

Keeping up with the rapidpace of change is not a simplething to do in this day andage. This includes positivechanges such as the numerousconstruction projects we’reembarking on for 2008.Chances are very good thatyou will encounter one of the

branch office renovations we are undertaking inorder to offer the best possible banking experi-ence to our customers. We ask for your patienceand understanding if your favorite branch sud-denly turns into a “hardhat zone.” Our contrac-tors will be in and out as quickly as possible andthe end product will be worth it.

This program of upgrades and renovations repre-sents a $2 million investment in the bank’s future.The changes are designed to help us serve you,our core constituency, better than ever. In ourrenovated offices you’ll find such “customer-friendly” amenities as coffee bars and comfortableseating areas, flat screen TVs and computerconsoles for online banking. You can samplethese environments for yourself in our Shippan,West Main, Darien and North Stamford branches.We plan to continue to roll out upgrades in ourGreenwich, Springdale and Westport branchesthroughout the year.

In addition, we are investing $3 million to updateour corporate offices to make them more efficient,and position them for future growth.

Along with the physical changes, we’re continuallydeveloping new financial products to help youmeet your changing needs. These include suchitems as tax-deferred CDs, and a wide range ofmortgage options including the popular jumbo

loans that many institutions have stopped offering.We want to emphasize the fact that we are notmortgage brokers. We take local deposits andoriginate mortgages for our own investment notfor sale to some faraway investor. That wayeveryone in our community benefits.

And that’s what positive change is all about.

Straight Talk with the Bank Chairman & CEOBuilding toward a brighter future

“In our renovated offices you’ll findsuch “customer-friendly” amenities ascoffee bars and comfortable seatingareas, flat screen TVs and computer

consoles for online banking.”

Richard E. TaberChairman & CEO

NEW! ONE YEAR TAX-DEFERRED CD

Earn 3.25%* APY and don’t pay taxes on it until April 2010! Call 203-462-4200 for details.

SPRING 2008

*The Annual Percentage Yield (APY) assumes the principal will remain on deposit for twelve (12) months. The APY is effectiveas of March 24, 2008 and is subject to change thereafter. Fees could reduce earnings. Minimum balance to open the account and earn the APY is $10,000. A penalty may be imposed for early withdrawal. Consult your tax advisor for specific details on how a tax-deferred account will affect you.

Q: What do you think is the #1 concern of investors today?

A: Judging by the calls we’ve been getting, Americans are worriedabout the safety of their investments – and by extension, theirfuture financial well-being. In the midst of the sub-prime mortgagecrisis, record oil prices, escalating foreclosures and increasedunemployment, that’s hardly surprising. But, as difficult as it might be to believe in the middle of all the hype, these downturns areactually part of the regular economic cycle.

Q: What do you think led us here?

A: The factors I just mentioned – leading with the mortgage crisis –have put a lot of pressure on consumers, who comprise 70 percent of our economy. It’s a complex issue, but the bottom line is that somelenders offered mortgages to buyers who could not afford the homesthey bought, often with no income verification. In many cases, the loanswere for the entire purchase price. When interest rates started to rise,borrowers with short-term Adjustable Rate Mortgages found their payments skyrocketing. They borrowed more and more against realestate that failed to keep pace, ultimately leading to a record numberof foreclosures. (Of course, FCB has never offered sub-prime loans,which is one reason we remain a strong resource for our customers.)

At the same time the cost of oil –currently over $100 a barrel – is hitting consumers hard. Not just at

the pump, but at the grocerystore, as transportingfood becomes moreexpensive, and food

crops are divertedto produce

alternativefuels.

Q: Is there an “up side”?

A: Yes, there is! Generally speaking, corporate America is in greatshape, balance sheets are healthy, and profit margins are at histori-cally high levels. In fact, a large number of companies have startedbuying back their own stock. They have cash on hand and see theirstock as a good value. The federal government is offering a stimulusplan via tax rebate checks. And the Fed is also cutting interest rates,which will have a positive influence, especially for the stock market.

Q: You say this is good for the stock market. Why? Aren’t stock prices down?

A: Granted, 2008 got off to a dismal start, with the S&P down 12percent so far this year. The good news is that, from a valuationstandpoint, we didn’t go into this downturn with the market drasticallyovervalued. Contrast this to the internet bubble that burst in Marchof 2000; at that time some stocks were drastically overvalued. In this case, the market was fairly valued so the effects aren’t likelyto be so drastic.

Q: So you recommend staying in the stock market?

A: The most important things to look at are your time horizon andyour adversity to risk. Historically, the best long-term returns havecome from stocks, and there is no reason to think that will change.With stock prices down, the stock market begins to look like abargain. Of course we recommend diversification, and asset allocation,spreading the risk between stocks bonds and other investmentvehicles. Right now we’re also advocating dividend-paying stocksthat are yielding over 5 percent. They’re starting to look veryattractive, given the preferential tax treatment the dividends receive.

Q: What do you say to people who are thinking about pulling outof the market?

A: The most important thing for investors to ask themselves beforebailing out is, “if not stocks, what?” Frankly, the alternatives aren’tthat attractive at the moment. Just consider the options:

Interest-bearing accounts. At the moment, money market rates are lowand headed lower. CDs are around 3 percent, although First CountyBank is offering a 3.25% CD with tax-deferred interest (see page 1),which may be an option if you will be needing your funds in a year.

Real estate obviously has its own issues. Everywhere you look you see“for sale” signs. As an investment, real estate will probably be flat foran extended period until the market absorbs the excess inventory.Real estate also has its own issues in terms of the cost of maintenanceand insurance. Obviously it isn’t a liquid investment.

WHERE DO YOU PUT YOUR TRUST?A conversation with David M. Metzgar, CFP, CTFAFirst Vice President, First County Bank Trust & Investment Services

“CONNECT29” Brings Down t

*For illustration purposes only. Rates and figures will vary.

Everyone has heard of Jumbo Jets, but how about Jumbo Mortgages? Jumbos are higher-rate“super-mortgages” that come into play when the loan is higher than Fannie Mae (FNMA) andFreddie Mac mortgage limits (currently $417,000). Here in Connecticut, where starter homescan easily run into the half-million dollar range, a Jumbo is often the only option.

Developed to help FCB customers manage the cost of local real estate, Connect29 is a piggyback loan that lets people borrow up to $417,000 at favorable interest rates with a maximum term of 30 years, then finance to a maximum of $300,000 with a separateloan with a maximum term of 29 years. The blended loan rate is lower than a Jumbo, and closing costs are also less.

Here’s how it works. *Suppose you need to borrow $480,000 to buy a new home. The typicalrate for a Jumbo would be 6.50% on the entire amount. Using the Connect29 program, youborrow your “first” mortgage of $417,000 at a rate of 6.00%, and piggyback your second

m

If you’re a non-profit agency, located in Stamford, Darien,Greenwich, New Canaan, Norwalk or Westport, FirstCounty Bank may have just the opportunity you’relooking for.

Established in 2001 in honor of the Bank’s 150th anniversary, the First County Bank Foundation distributesfunds annually to organizations that directly assistlocal residents, impacting the health and well-beingof people who live and work in lower Fairfield County.Last year, the Foundation collectively awarded morethan $500,000 in grants.

Chairman of the Board and First County Bank CEORichard Taber says, “As a mutual savings bank with no stockholders, First County Bank considers theFoundation a means of paying dividends to the localcommunities. This is our way of ‘giving back’.”

In order to be eligible for funding, agencies must have a non-profit tax-exempt status under section 501(c)(3) ofthe Internal Revenue Code, and must have communitysupport, address community needs, have measurableoutcomes, and demonstrate fiscal and administrativeresponsibility. Only project-specific requests will befunded, and consideration for funding extends only toagencies providing programming in community oreconomic development, or services for children andfamilies. Programs benefiting low/moderate incomepopulations will receive special attention.

Applications will be accepted through April 18, 2008. Toreceive an application, please contact Jennifer DaSilva at(203) 462-4349, email us at foundation@firstcountybank.com,

or stop into any branch location.

The First County BankFoundation is SeekingGrant Applications

Commodities are not for amateur investors; you need someexpertise to compete in that game. For example, at an all-timehigh, will oil and gold prices continue upward or have theypeaked? It’s a huge gamble, and commodities offer no payoutwhile you hold them.

Q: Do you feel discouraged about the long-term outlook?

A: Some people are saying that the best days are over for the U.S.economy. I disagree with that. We’re still by far the largest economyand one of the most productive as well. Looking forward, I believe theFederal Reserve will continue to ease interest rates. Lenders will con-tinue to tighten their credit standards, which will ultimately preventcrises like the sub-prime situation. The stock market has beenthrough periods like this before, and it is due for better performancein the not-too-distant future.

Q: Do you have advice for bank customers who are concerned?

A: Yes. It is so important in times like this not to panic, and to staythe course. I believe there’s no point in losing sleep over yourinvestments. If you have a portfolio you’re worried about, we’ll behappy to sit down and take a look at what you have, and give youour professional opinion on stocks we think are good investments,those we don’t.

Q: So you recommend professional investment management.

A: Let’s put it this way: let the professionals who have expertise atpicking stocks and reading the market, who do it 24/7, be the onesto lose sleep. Not you. This is what we do, and we can do it for youso you can turn your attention to other matters.

Dave M. Metzgar can be contacted directly at (203) 462-4267 or at dmetzgar@firstcountybank.com.

the Cost of Mortgages.

F I R S T F O C U S • S P R I N G 2 0 0 8

$10,000

$1000

$100

$10

$1

$0

1925 1940 1955 1970 1985 2000 2010

8 Decades of Stock Returns

$3,247S&P 500

Total Return Index

Stocks have averaged a 10%annual rate oftotal return since1925.

10.4% c.a.r.

mortgage of $63,000 at a fixed rate of6.50%. This represents a significantsavings over the life of the loan.

Connect29 is also great for buyerswho have 10 percent to put down.Ordinarily, they would have to buyPrivate Mortgage Insurance (PMI). Using Connect29, the homebuyer can borrow 80% for the first mortgage put 10% on the piggyback, avoiding the need for PMI.

Whether you’re a first time homebuyer or looking to refinance, you’ll want to check into Connect29. Ask any of our customer service representatives how this innovative loan can cut your costs of home ownership.

LOWER INTEREST RATE

LOWER CLOSING COSTS

NO PMI

117 Prospect Street • Stamford, CT 06901

Turn Your Home into a Summer Destination

FREEA good first step is to eliminate clutteraround the house (have a yard sale!) Then:

• Wash windows and curtains to brighten every room

• Clean up your yard, cut back overgrown shrubs and trees, and compost dead plants

• Get weeds under control with layers of newspaper and several inches of compost (local tree trimming companies often offer wood chips for free)

• Make a garden path from broken concrete (check local construction sites or companiesfor freebies)

• Ask friends for cuttings or divisions of plants you like– and offer yours in return

INEXPENSIVEA fresh coat of paint gives any room a newlease on life. Other ideas include:

• Update that old bathtub with a glossy epoxy finish designed for home use

• Rent an industrial strength carpet cleaner or floor buffer to refresh floors

• Replace old-fashioned door and drawer pulls • Replace tired old lighting fixtures with new, energy-smart ones

• Replace thirsty, high-maintenance plants with drought-tolerant varieties

• Add a soothing water feature to your yard; modern pumps and pond liners are easy for do-it-yourselfers to install

INVESTMENTMaintaining the value of your home in a flatmarket may justify the cost of renovation.Bathrooms and kitchens are the most pop-ular rooms to improve on because they addto the resale value of your home. And out-doors, professional landscaping or a newdeck or “outdoor room” will enhance thebeauty and appeal of your property. If youdecide to go this route, be sure to stop byany branch and ask about loans that canhelp make this happen.

Ah, spring. The time when a young man’s fancy lightly turns to thoughts of…vacation! However, with money tight and oil at an all time high, people are thinking twice about packing up and taking off. According to the Travel Industry Association, the Travel Price Index rose 8.4% this January compared to last. Gasoline was up 34.4%, lodging almost 5% and airfares nearly 9%.

This summer we will be staying home in droves. So what better place to put your time, efforts, and maybe even that hard-won tax refund? Here is a list of steps that you can take to increase your pleasure in staying home– not to mention the value of your property.