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Ahead to 2009 ANNUAL MEETING

A NOTE ON SOCIETY INVESTMENTS

You all are aware that the United States and global economies are experiencing significant volatility that may well trigger a deep recession. One outcome of this situation was the purchase of Merrill Lynch, the firm that advises us and executes most of SCB's purchases and sales of securities and other investments, by Bank of America. The people with whom we work closely at Merrill Lynch foresee no changes in their role or the way in which they work with us. SCB will continue to enjoy unusual access and support. The value of SCB's portfolio continues to perform better than the market as a whole. SCB has avoided investment in stocks, bonds, or derivatives of the companies most severely affected by recent financial turmoil. No sector of the market, of course, is completely insulated from other sectors; a downturn has ripple effects. As we enter this downturn it is important to remind ourselves that our earnings will improve and that because we invest for the longer term we can ride out such downturns. (Without offering a prediction, it's likely that the economy will show lackluster performance through 2009 and perhaps for-much longer.) SCB's position may require us to sell some investment assets to provide short term support for our core business. We should be able to reinvest in assets as favorable low prices in the near term. We continue to rely on the same investment principles that have allowed the Board Designated Reserve to grow over the years and out perform market averages.

Back to TREASURER'S REPORT TO THE MEMBERSHIP

Up to Table of Contents

Ahead to 2009 ANNUAL MEETING