November 2008

Dear Covenant Bancshares Shareholder:

As you know we acquired the Community Bank of Lawndale on March 12, 2008.  We officially changed the bank name to Covenant Bank on June 1st.  Covenant Bank is an FDIC member bank.  Each depositor is insured up to $100,000.00, ($250,000.00 on IRA Accounts) by the Federal Deposit Insurance Corporation.

We are working diligently to make the bank a success.  We have already taken the following actions:

• We have recruited and installed a new Management Team.
• We have increased capital by over $3 million.
• We are expanding – We opened a new Loan and Deposit Production Office in the Forest Park Plaza on June 15, 2008.  We have also expanded the bank’s products and services.

The banking business is a highly regulated and capital intensive business.  We have a proactive plan to develop multiple locations and significantly increase the bank’s assets beyond $70 million.

In our effort to grow the bank and increase the value of your investment, we have decided to offer additional shares of stock to existing and new investors.  We are offering new shares at $10.00 per share.  We require a minimum purchase of 100 shares or $1,000.00.  You can access the necessary paperwork by logging on to www.bwm.org, by picking up a circular at our location in the Forest Park Mall, or by calling (708) 697-5121 to receive information by mail.

Covenant Bank is the first step in a long-term plan to create a banking franchise that will help rebuild communities, promote entrepreneurship, and create jobs and income opportunities within the communities we will serve. 

I sincerely hope you will increase your investment and also become a customer of Covenant Bank.  We currently offer free checking, a 12-month Certificate of Deposit paying 3.75%, and a full array of loan products.  We look forward to serving you not only as a shareholder of Covenant Bancshares, Inc., but also as a customer of the new “Covenant Bank”.

Sincerely,

Dr. William S. Winston
Chairman of the Board

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