All Deposits Insured In Full

FDIC Insurance

Effective July 21, 2010

The standard FDIC deposit insurance coverage has increased permanently to $250,000 per depositor per ownership category.

Effective December 31, 2010

NOTICE OF CHANGES IN TEMPORARY FDIC INSURANCE COVERAGE FOR TRANSACTION ACCOUNTS

All funds in a "noninterest-bearing transaction account" are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC's general deposit insurance rules.

The term "noninterest-bearing transaction account" includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, money-market deposit accounts, and Interest on Lawyers Trust Accounts ("IOLTAs").

For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.

For additional detailed information on all FDIC insurance coverage, visit the FDIC's website "Are My Deposits Insured?"

The Depositors Insurance Fund (DIF) is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at Massachusetts-chartered savings banks. https://www.difxs.com/DIF/Home.aspx

The combination of FDIC and DIF insurance provides customers of Massachusetts-chartered savings banks with full deposit insurance on all their deposit accounts. No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

Questions and Answers about deposit insurance at Mt. Washington Bank:

Q: My bank displays both the FDIC and DIF logos. What does membership in these organizations mean?

A: As a member of both the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF), your bank provides full insurance for its customers' deposits and accrued interest without limit or exception. Each depositor is insured by the FDIC to at least $250,000. All deposits above the FDIC insurance amount are insured by the Depositors Insurance Fund (DIF).

Q: Are all types of deposit accounts fully insured in a bank providing both FDIC and DIF insurance?

A: Yes. All types and classes of deposit accounts are covered, including savings accounts, checking and NOW accounts, certificates of deposit (CDs), money market deposit accounts, and retirement deposit accounts.

Q: I am a depositor at an out-of-state branch of a DIF member bank. Are my deposits covered by DIF insurance?

A: Yes. Several DIF member banks have branches in neighboring states. As a depositor in a DIF member bank, your deposits are fully insured. DIF coverage is not affected by where a depositor resides or where a member bank branch is located.

Q: Are there any forms, applications, or special account titles required to receive full deposit insurance?

A: No. There are no forms, applications, or special account title requirements. Full deposit insurance protection works simply. You automatically receive this added insurance benefit when you make any deposit at a DIF member bank.

Q: Does the DIF insure investments in bank mutual funds or annuities?

A: No. Both the FDIC and the DIF insure only bank deposits, and do not insure bank mutual funds or annuity products.

Q: How do I know if my bank provides DIF insurance coverage?

A: Most member banks display DIF signs on doors and at teller stations, and note their membership in advertisements and marketing brochures. Look for "Member FDIC / Member DIF". If you are not sure, ask a customer service representative.

Q: How financially strong is the DIF?

A: No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

The DIF has over $350 million in assets. During the recession of the early 1990s, the worst financial period in the history of the Massachusetts savings bank industry, the DIF paid out more than $50 million to protect over 6,500 depositors in 19 failed member banks. Yet the DIF emerged from this period financially stronger than before the recession began.

Q: Is the DIF a federal or state agency?

A: No. The DIF is a private, industry-sponsored insurance company and is not backed by the federal government or the Commonwealth of Massachusetts.

Q: How are the assets of the DIF invested?

A: Massachusetts law and the DIF's investment policies restrict the DIF to investments suitable for an organization that insures the public's deposits, primarily U.S. Treasury and federal agency obligations, and obligations fully guaranteed by the U.S. government. DIF investments are regularly reviewed by its Board of Directors to assure conformity with both the law and DIF investment policies.

Q: Does the DIF monitor the financial condition of its member banks?

A: The DIF receives financial reports from its member banks on a quarterly basis. In addition, formal examinations are conducted regularly by the FDIC and the Massachusetts Division of Banks. The DIF meets regularly with officials of both agencies to review and evaluate the condition of its member banks.

Q: Is the DIF subject to any form of regulatory scrutiny?

A: Yes. The DIF is examined annually by the Massachusetts Division of Banks and audited by an independent auditor.