Jeff Dick
President and CEO
MainStreet Bank

Welcome to our first issue of MainStreet Connection.

Anyone who banks with MainStreet knows we're never too busy to answer questions. Now, through this monthly newsletter, we can do even more to share good answers and sound advice about everything from banking technology to how to finance college or business expansion when home equity isn't the answer.

Like everything we do at MainStreet, we've designed MainStreet Connection to make it easy to put good-sense solutions into action. Use this month's articles to cut your taxes, investment risk, and the chance of identity theft. We even have a special discount for you on the LifeLock program. To learn more about anything mentioned in the newsletter, just click on one of the Quick Connect links over at the right.

In addition, I hope you'll check out MainStreet Outlook. It's my monthly take on what's happening with the local economy and how it affects your business decisions and personal finances.

So let's get started! And remember, we always enjoy hearing from you. Send us your questions, reply with comments, share it with friends and colleagues, and make the MainStreet Bank community yours. Feedback@mstreetbank.com

Creative Solutions - Protect yourself from identity thieves posing as the IRS ... Get LifeLock™ for less

Tax season is open season for identity thieves hunting Social Security and bank account numbers. If you get a call or e-mail from an IRS representatives asking for information to wire you a refund or rebate, check directly with the IRS before doing anything. Be particularly wary of IRS e-mails notifying you of an audit or supposed changes in the tax law. Just clicking a link can download harmful "malware" into your computer.

This tax season — and year round — here are three easy practices that give you a strong front-line defense against identity theft.

1. Safeguard information: Shred documents. Don't carry your Social Security card in your wallet or write the number on checks. Never give out information by phone, mail or Internet unless you're sure you know with whom you're dealing. Secure personal information if you employ outside help or are having work done in your home or office.

2. Be alert: Act quickly if bills don't arrive as expected or you get unexpected credit cards, statements, or credit denials. Inspect your statements carefully.

3. Get "LifeLock" service now ... and save $21: MainStreet Bank president Jeff Dick was impressed with LifeLock ads featuring the Social Security number of its founder. After investigating how LifeLock protects against identity theft, Jeff not only signed up, he created a LifeLock program right here at MainStreet. You don't even have to be a customer to join — just sign up and get a full year of LifeLock protection. The regular annual fee is $120, but newsletter readers who sign up through our Web site pay just $99. MainStreet makes it extra easy to get on board. Plus, while we save you money, LifeLock's guarantee saves you from the fear and frustration of having your identity stolen.

StreetSmart - IRAs, short-term loans and the Bear Stearns scare

Traditional vs. Roth: Which is right for you? There's still time to use an IRA to cut 2007 taxes. One of the best places to put your IRA contribution is a Certificate of Deposit — you have until April 15, 2008. But first, choose the IRA that's right for you. Here are three key differences:

1. Deductibility: Roths aren't tax deductible. Traditional IRAs are typically tax deductible, unless your income and participation in an employer-sponsored retirement plan disqualify you.

2. Penalties: Since traditional IRAs use pre-tax dollars, taxes and penalties can apply to withdrawals. But Roth contributions are made with after-tax dollars. The "capital" in your IRA can be withdrawn at any time without penalty. Plus, any interest that remains on deposit for five years is not taxable and can be withdrawn without penalty.

3. Distributions: Traditional IRA distributions have to begin by age 701/2. With a Roth, you are not required to take distributions.
We can e-mail you a chart showing differences, plus a link to a helpful IRS document covering all there is to know about IRAs. Click here.

Owe Taxes? If you don't have the cash to pay by April 15th, you can file for an extension. Remember that accountants charge for filing extensions, and hefty interest accrues. MainStreet customers often find it's better to use a short-term loan to pay taxes up front. This information is not meant to provide legal or accounting advice.  We recommend that you consult your tax advisor regarding the regulations and how they apply to your particular tax situation.

Lessons from Bear Stearns. If last-minute action hadn't saved Bear Stearns, could brokerage clients have turned to the Securities Investor Protection Corporation (SIPC) to restore their assets? Note, this protection is limited: If a brokerage goes bankrupt, the SIPC steps in. But is a brokerage engages in fraud or bad investment practices, you're on your own. That's very different from the FDIC insurance that covers bank accounts. To learn more about FDIC protection, Click here.

MainStreet Answers

Q. FDIC insures CDs up to $100,000 – how can I protect larger amounts?

A. Easily — with CDARS. The Certificate of Deposit Account Registry Service (CDARS) lets you invest up to $50 million in CDs — all FDIC-protected. At MainStreet, for example, we can spread a customer's investment into multiple CDs, each funded up to $100,000 to retain FDIC protection. MainStreet summarizes all CD investments, automatically tracks maturity dates, and handles rollovers, withdrawals, and new deposits all through one point of contact.

MainStreet Outlook

The Federal Reserve seems to be having difficulty finding the right combination remedy to knock out our financial ills. Is it feed a mortgage crisis and starve the dollar? The Fed has already dropped its discount rate 2% and pumped hundreds of billions of dollars into the financial system to no visible avail. The Congress recently passed its economic stimulus package which won't find its way into the economy until the second half of the year. Oil prices broke $100 per barrel and gold hit $1,000 an ounce. The dollar continues to lose ground.

"Market correction" is easy to say if you’re not trying to sell or refinance your house. Nevertheless, nobody disputes the need for a market correction in our area. Only a year ago, a friend of mine indicated that he couldn't afford to buy a home in his own neighborhood.

But when will it end? Fortunately our free market economy will prevail. New businesses are already finding an opportunity to purchase foreclosed properties and capitalize on the opportunities lost by others. Not only will this activity stimulate the economy, it will also help to stimulate the transfer of ownership and prevent homes from sitting empty.

So when will it end? There is some optimism that things will look a little brighter toward the latter half of 2008.