Seaway Bank and TruST Company

A Timefor
Celebration
W e a r e n o w o f f i c i a l l y
Seaway Bank and Trust Company
Seaway Bancshares, Inc.
2007 Annual Report

Seaway Bancshares, Inc.
Financial highlights year ended: December 31, 2007 December 31, 2006 % Change
Total Stockholders’ Equity $29,107,889 $26,477,122 9.94%
Return on Average Equity 9.92% 9.23% 7.48%
Total Assets $346,734,308 $358,591,450 (3.31)%
Seaway Bank and Trust Company
Financial highlights year ended: December 31, 2007 December 31, 2006 % Change
Net Income $3,201,531 $2,850,831 12.30%
Total Deposits $301,033,769 $313,836,983 (4.08)%
Total Loans $181,246,604 $174,421,621 3.91%
A Time For Celebration...
As of December 30, 2007 we are...
Quality Service Statement
Seaway Bank and Trust Company will develop and deliver products
and services that satisfy the financial needs of our customers. Our goal
is to be recognized as the premier quality bank in the community we
serve. All marketing, products, systems, processes and training will be
designed to prevent errors and to provide customers with consistently
high levels of quality service, which will be monitored continuously.
If service problems develop, emphasis will be placed on timely and
courteous resolution, including responsive communication with the
customer. Success will be measured in terms of our ability to meet
customers’ requirements, and employees will be rewarded for quality
performance.
Table of Contents
Letter to Our Shareholders ..........................................................................1
Consolidated Financial Statements Seaway Bancshares, Inc. and Subsidiary ..................................7
Consolidated Financial Statements Seaway Bank and Trust Company. ...................................... 11
Notes to Financial Statements ......................................................................15
Independent Auditor’s Report ......................................................................23
Board of Directors and Officers .....................................................................24
Facilities ........................................................................................25
©2008 Seaway Bancshares, Inc. Printed in USA

Letter to Our Shareholders
A Time For Celebration...
As we close the books on another
year, we have cause for celebration.
On December 30, 2007, Seaway
National Bank was granted state
charter status. We are now officially
a State bank — Seaway Bank and
Trust Company!
This exciting development
caps another strong year for us at
Seaway. Earnings were up in 2007,
and growth was at 7 percent. At a
glance, year-end highlights included
the grand opening of our newly
constructed South Branch, remodeling
our home office in Chatham,
relocating our loan production center
in Waukegan to a spacious new
office, celebrating our President’s
35 years of service, and expanding
our ATM network to better serve
our customers.
The secret to Seaway’s success is
really no secret at all. As shareholders,
you know we simply never waiver
from our mission, and we never
lower our standards. Above all, in
2007, we continued to provide the
same common sense solutions to
the members of this community
that we’ve served for more than 40
years.
Still, turbulence in today’s financial
markets does raise important
questions. Is the worst of the fallout
behind us? Does Seaway have what
it takes to ride out whatever ups and
downs may come our way?
Seaway’s response to these
questions is rooted in the bank’s
time-honored mission of serving
the needs of the community. We expect
uncertainty, and so we rely on
strong fundamentals to weather any
storm. We were especially proud of
our strong commitment to our standards
and to our customers in light
of last year’s sub prime mortgage
meltdown. While markets were
teetering, we were introducing new
products for our customers. While
large financial institutions suffered
great losses, we were remodeling a
facility and opening others.
Although our commitment
to community service will never
change, it wasn’t just business as
usual in 2007. We broke new ground
in our outreach efforts when we
teamed up with Northeastern
Illinois University in October to
offer a financial literacy program
that teaches parents of 8th and 9th
Jacoby Dickens
Chairman of the Board
graders how to better manage their
money. It’s a timely endeavor and
just one example of the types of initiatives
Seaway routinely supports
in the community.
Also in 2007, our Board of
Directors bid farewell to William H.
Dunbar, Jr. Mr. Dunbar served on
Seaway’s Board since 1990, and his
experience and knowledge will be
greatly missed.
At the same time, we welcomed
to our Board David A. Kelly. Mr.
Kelly is a lawyer whose expertise in
the fields of accounting and real estate
will make him a valuable asset
for the bank’s Board going forward.
Our core philosophy for 2008
will remain what it has always been
— to make this year better than
last, and to continue to introduce
new and innovative ways to meet
the financial needs of the community,
for the ultimate benefit of our
customers, our employees and our
shareholders.
As we look back over 2007, we
feel the opening of a new South
Facility, remodeling our Main Facility,
expanding our loan production
office, becoming a State chartered
institution and commemorating our
President’s 35 years of dedicated
service are all worth celebrating!
Walter E. Grady
PResident and
Chief Executive officer
Seaway Bancshares, Inc. 2007 Annual Report | 1

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Celebrating
Our New Name
Seaway Bank and Trust Company!
This became Seaway’s new name
on December 30, 2007, when our
application to become a State
chartered bank was approved by the
Illinois Department of Financial
and Professional Regulation.
Seaway has always looked for ways
to better serve its customers, and
this new charter will enable us to
do just that. Now, more time can
be spent on developing innovative
products and services that will make
banking more convenient for our
customers. Additionally, our newly
expanded powers will enable us to
loan larger amounts to our borrowers.
This is exciting news for us and
for our customers.
friends nationwide trust to provide
reliable service. At the same time,
changing our name sparks an excitement
that motivates us to consider
greater possibilities. In 1965, when
a visionary group of entrepreneurs
pooled their resources,
they formed Seaway and
fulfilled their dreams. Forty
years later, not only are we
keeping that dream alive, we
are also helping others to
pursue their dreams.
Our new charter and our
new name represent the
latest chapter in this inspiring
story. We are very happy
to celebrate this episode.
William Bates, Jr.,
Executive Vice
President and General
Counsel, was pivotal
in working to make
Seaway’s state bank
charter a reality.
Our new name indicates that the
fundamentals of our bank have not
changed. We are still Seaway—the
Seaway that our community and
Seaway has always looked
for ways to better serve its
customers, and this new charter
will enable us to do just that.
2 | Seaway Bancshares, Inc. 2007 Annual Report

Celebrating
Our Financial Strength
More than 40 years of doing
business has taught us this:
The more the financial world
changes, the more Seaway should
stay the same. Why? Because Seaway’s
values and commitment are so
fundamental, they transcend time
and keep us financially strong. Even
in the midst of 2007’s sub prime
meltdown, we stayed true to our
mission. We balanced the pursuit
of profitability with a keen sense of
responsibility. We view every loan
we make as a long-term investment
in the community we serve.
Opportunities to make fast money
may be lost, but the interests of our
customers and our relationship with
them are protected.
In 2007, Seaway received a grant
from the Community Development
Financial Institution (CDFI) for
providing affordable housing
mortgages, affordable housing
development, and small business
and commercial real estate to
underserved areas in Illinois and
Indiana. CDFI funds exist to build
healthy communities by helping low
income families create wealth, and
Seaway is helping to lead the way.
This award validates our
understanding of the link between
financial strength and social re-
sponsibility. The award also
acknowledges Seaway’s highly
regarded track record of community
involvement.
Seaway’s strength is reflected in
the communities it serves, as well.
Since the bank’s founding, the economic
strides made in the Chatham
community are nothing short of
remarkable. Homeownership has
increased dramatically. Property
values have risen steadily. National
We view every loan we make
as a long-term investment in the
community we serve.
retailers see this as a viable
community, and so many have
opened their stores here. To be
sure, the rising tide of Seaway’s
success has lifted the fortunes of
the entire community. Chatham’s
growth is a testament to the
bank’s distinctive business model.
It’s also one of our proudest
accomplishments, and we
celebrate this fact.
Seaway Bancshares, Inc. 2007 Annual Report | 3

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Celebrating
Our New Facilities
The new Roseland
branch facility (left).
Walter E. Grady,
President and CEO,
and Claudette Harris,
AVP/Marketing Officer,
On May 18, 2007, Seaway
celebrated the grand opening
of its new facility at 11116 South
Michigan Avenue in Chicago. This
new, state-of-the-art building is a
symbol of Seaway’s genuine commitment
to the revitalization of the
Roseland community. To mark this
auspicious occasion, Cook County
Board President Todd Stroger sent
a proclamation that designated May
18 as Seaway National Bank Day in
Cook County.
Also, in 2007 we completed the
remodeling of the first floor of our
home office in Chatham and relocated
our loan center in Waukegan
to a larger, higher profile location.
The Chatham project represents
our continued efforts to improve
the quality of service we provide
from our home office.
Grand openings were just one story
in a year that was filled with noteworthy
news. Seaway introduced a
number of financial products and
services in 2007—our Platinum
Money Market Account, our free
student checking program, and a
short-term money market product.
At the same time, we made it easier
than ever for Seaway customers to
access their money by joining the
AllPoint/STARsf Network, one of
the country’s leading PIN-secured
debit networks.
at the May 18 ribboncutting
celebration
(above).
This new, state-of-the-art
building is a symbol of
Seaway’s genuine
commitment to the
revitalization of
the Roseland community.
4 | Seaway Bancshares, Inc. 2007 Annual Report

Seaway has always worked hard to
reinforce its culture of commitment.
This culture enables us to
make a difference to the people
we serve. It also helps us to retain
employees who value working for
an institution that is committed to
giving back. To demonstrate our
appreciation for their length of service,
Seaway hosted a Red Carpet
Luncheon in November to honor 38
bank employees who have worked at
the bank for more than 15 years!
The key to our culture of commitment
is our independence. Of
course, we’re in this business to
make a profit. However, we strongly
subscribe to the idea of “doing well
by doing good.” This approach allows
us to invest in groundbreaking
programs like our 1% Down Mortgage
and the Seaway Community
Development Corporation. We’re
also motivated to support local
social services operations.
Our young adults are one of the
largest groups that has benefited
from Seaway’s commitment through
the years. Seaway has always had a
special affinity for youth programs.
Our Management Trainee Program,
Celebrating
A Culture of Commitment
We strongly subscribe to the idea of
“doing well by doing good.”
Board of Education Work-Study
and Intern Programs, and our Bankat-School
Program are shining examples
of initiatives we’ve launched
on behalf of community youth. We
look forward to continuing this
proud tradition in the future.
When it comes to corporate responsibility
and community stewardship,
we are an undeniable leader. Larger
banks may have more resources, but
Seaway has no equal when it comes
to delivering quality care.
Arlene Williams, Executive
Vice President/Lending
(left), demonstrates
Seaway’s culture of
commitment by protecting
the interests and relationships
with customers.
Seaway Bancshares, Inc. 2007 Annual Report | 5

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Celebrating
35 Years at Seaway
Gail L. Bahar, Vice
President/Human
Resources, presents
Mr. Grady with a plaque
commemorating 35
years of service.
In October of 2007, Walter E. Grady,
6 | Seaway Bancshares, Inc. 2007 Annual Report
President and Chief Executive Officer,
celebrated his 35th year at Seaway
Bank. In many ways, Mr. Grady
is the face of Seaway. His hands-on
style epitomizes the personal touch
that defines Seaway’s approach to
customer service. His leadership
acumen has enabled the bank to
enjoy a remarkably consistent rate
of growth. His philosophy “to stay
persistent and focused” has been a
guiding principle for his employees.
During Mr. Grady’s tenure, Seaway
has gone from being a $40 million
bank to a $340 million bank. Today,
Seaway is recognized as one of the
largest Black-owned banks in the
country, with 250 employees and
corporate trust assets exceeding $1
billion. It’s also no small feat for a
community bank in the country’s
third largest metropolis! Seaway’s
new state charter status is the latest
chapter in the bank’s impressive
success story.
A number of successful programs
have been launched on Mr. Grady’s
watch. Seaway’s 1% Down Mortgage
Program has enabled countless
individuals to achieve the dream of
homeownership. Twelve years ago
Seaway looked at the issue of homeownership
and realized that the biggest
impediment to buying a home
was the down payment. Under Mr.
Grady’s direction, Seaway created a
program to help people overcome
that obstacle, and the program has
been a tremendous success.
Seaway has also worked hard under
Mr. Grady’s supervision to be on
the leading edge of technology.
As a result, Seaway became the
first Black-owned bank to be fully
automated. It also became the first
Black-owned bank to provide its
customers with ATM service.
The list of technological strides
Seaway is making under Mr.
Grady continues to grow.
Seaway’s founding mission was
to meet the needs of underserved
communities. Mr. Grady
has worked to uphold this
mission, and his efforts have
served the bank well. They
have also created a sense of
loyalty among the bank’s staff,
many of whom have worked
here for more than twenty
years, and all of whom recognize
Mr. Grady as the driving
force behind Seaway’s continued
growth, prosperity and commitment.
Increased competition and regulations
are making the banking
industry more difficult than ever.
And yet, motivated by past successes,
inspired by its steadfast mission,
Mr. Grady would be the first
to say that Seaway’s future remains
brighter than ever.

Seaway Bancshares, Inc. and Subsidiary
Consolidated Statements of Condition
for the years ended December 31, 2007 and 2006
Assets
2007 2006
Cash and due from banks $ 9,652,122 $ 9,645,098
Interest Bearing Balances 8,760,715 29,401,080
Total Cash and cash equivalents 18,412,837 39,046,178
Securities available-for-sale (Note 3) 132,414,918 130,686,653
Securities held-to-maturity (Note 3) 654,172 660,197
Loans, net of unearned discount (Note 4) 181,246,604 174,421,621
Less-Allowance for possible loan losses (Note 5) (1,840,318) (1,734,781)
Loans, net 179,406,286 172,686,840
Premises and equipment, net (Note 6) 4,872,806 4,593,616
Other real estate owned 231,532 70,881
Intangible Assets (Note 18) 300,000 440,338
Other assets (Note 8) 10,441,757 10,406,747
Total Assets $ 346,734,308 $ 358,591,450
Liabilities and Stockholders’ Equity
Deposits (Note 7)
Non-interest-bearing deposits $ 46,822,228 $ 70,202,716
Interest-bearing deposits 253,326,079 242,844,840
Total Deposits 300,148,307 313,047,556
Federal funds purchased and other borrowed funds 6,125,000 9,048,205
Long-term Debt Subordinated Debentures (Note 9) 6,186,000 6,186,000
Other liabilities (Note 8 and 12) 5,167,112 3,832,567
Total Liabilities 317,626,419 332,114,328
Commitments and Contingencies (Note 7, 13 and 16)
Stockholders’ Equity
Common stock (Note 10) 301,513 301,513
Surplus 3,915,994 3,915,994
Undivided profits (Note 11) 24,875,756 24,530,248
Accumulated Other Comprehensive Income 14,626 (2,270,633)
Total Stockholders’ Equity 29,107,889 26,477,122
Total Liabilities and Stockholders’ Equity $ 346,734,308 $ 358,591,450
The accompanying Notes to Financial Statements are an integral part of these statements.
Seaway Bancshares, Inc. 2007 Annual Report | 7

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Seaway Bancshares, Inc. and Subsidiary
Consolidated Statements of Income
for the years ended December 31, 2007 and 2006
Interest Income
2007 2006
Interest and fees on loans $ 11,929,081 $ 11,276,782
Interest on investment securities
US Government Obligations and Treasury Securities
agency Obligations 5,649,897 5,486,656
mortgage-Backed Securities 410,289 479,139
Obligations of state and political subdivisions 65,748 86,204
Other securities 130,814 150,961
Interest on federal funds sold and other interest-bearing balances 463,127 643,133
Total Interest Income $ 18,648,956 $ 18,122,875
Interest Expense
Interest on time deposits $100,000 or more 5,385,515 5,364,721
Interest on other deposits 2,241,412 1,658,831
Interest on Long-term Debenture 397,760 384,501
Interest on federal funds purchased and other borrowed funds 353,081 359,416
Total Interest Expense 8,377,768 7,767,469
Net interest income 10,271,188 10,355,406
Provision for possible loan losses (Note 5) (80,000) (134,000)
Net interest income after provision for possible loan losses $ 10,191,188 $ 10,221,406
Other Income
Service charges on deposit accounts 3,073,580 2,745,417
Other operating income 5,946,556 5,136,708
Gain on sale of investment securities — 101,651
Total Other Income $ 9,020,136 $ 7,983,776
Other Expenses
Salaries and employee benefits (Note 14 and 15) 10,052,723 9,666,131
Occupancy expense of Bank premises (Note 6) 2,396,680 2,194,550
Other operating expenses 3,999,309 3,899,146
Total Other Expenses 16,448,712 15,759,827
Income before income taxes 2,762,612 2,445,355
Applicable income taxes (Note 8) (5,000) (17,364)
Net Income $ 2,757,612 $ 2,427,991
Net Income Per Share (Note 10) $ 9.15 $ 8.05
The accompanying Notes to Financial Statements are an integral part of these statements.
8 | Seaway Bancshares, Inc. 2007 Annual Report

Seaway Bancshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows
for the years ended December 31, 2007 and 2006
Operating Activities
2007 2006
Net Income $ 2,757,612 $ 2,427,991
Adjustments to reconcile net income to net cash
provided from (used by) operating activities:
Provision for loan losses 80,000 134,000
Provision for depreciation and amortization 567,843 529,308
Amortization of investment security premiums 42,207 91,002
Accretion of investment security discounts (47,462) (64,222)
Net change in deferred income taxes (6,275) (51,072)
Net decrease (increase) in interest receivable 176,975 (344,615)
Net increase in interest payable 405,385 194,665
Net increase in other assets (71,647) (355,768)
Net increase in other Liabilities 935,435 703,857
Net cash provided from operating activities $ 4,840,073 $ 3,265,146
Investing Activities
Proceeds from sales and maturities of investment securities available for sale 15,265,000 25,892,687
Principal collected on investment securities available for sale 3,018,158 3,988,959
Principal collected on investment securities held for maturity 119,957 135,624
Purchases of investment securities available for sale (17,720,909) (12,880,009)
Purchases of investment securities held to maturity (113,932) (225,603)
Net increase in long-term loans (6,799,446) (11,256,092)
Purchases of premises and equipment (net) (847,033) (2,156,520)
Net increase in other real estate (160,651) (21,122)
Net cash provided from (used by) investing activities $ (7,238,856) $ 3,477,924
Financing Activities
Net (decrease) increase in non-interest-bearing deposits (23,380,488) 31,173,502
Net increase (decrease) in interest-bearing deposits 10,481,239 (12,574,206)
Net (decrease) in federal funds purchased and other borrowed funds (2,923,205) (60,708)
Net increase in Long-Term Debt Subordinated Debentures — 6,186,000
Cash dividends paid (2,412,104) (2,638,239)
Net cash (used by) provided from financing activities (18,234,558) 22,086,349
Net increase (decrease) in Cash and Cash Equivalents (20,583,341) 28,829,419
Cash And Cash Equivalents At Beginning of Year 39,046,178 10,216,759
Cash And Cash Equivalents At Year-End $ 18,412,837 $ 39,046,178
Interest Paid $ 8,377,768 $ 7,382,967
Income Taxes Paid $ 5,000 $ 17,364
The accompanying Notes to Financial Statements are an integral part of these statements.
Seaway Bancshares, Inc. 2007 Annual Report | 9

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Seaway Bancshares, Inc. and Subsidiary
Consolidated Statements of Changes in Stockholders’ Equity
for the years ended December 31, 2007 and 2006
Accumulated
Stockholders’
Other
Common undivided Comprehensive TotaL
Stock Surplus Profits Income eQuity
Balance December 31, 2005 $ 301,513 $ 3,915,994 $ 24,740,496 $ (2,798,944) $ 26,159,059
Dividends - $8.75/ Share — — (2,638,239) — (2,638,239)
Retirement of common stock
Comprehensive Income
Net Income — — 2,427,991 — 2,427,991
Other Comprehensive Income
Unrealized Gain on Available
for Sale Securities, Net of Tax — — — 528,311 528,311
Balance December 31, 2006 $ 301,513 $ 3,915,994 24,530,248 (2,270,633) $ 26,477,122
Dividends $8.00/Share — — (2,412,104) — (2,412,104)
Comprehensive Income
Net Income — — 2,757,612 — 2,757,612
Other Comprehensive Income
Unrealized Gain on Available
for Sale Securities, Net of Tax — — — 2,285,259 2,285,259
Balance December 31, 2007 $ 301,513 3,915,994 24,875,756 14,626 29,107,889
The accompanying Notes to Financial Statements are an integral part of these statements.
10 | Seaway Bancshares, Inc. 2007 Annual Report

Seaway Bank and Trust Company
Statements of Condition
for the years ended December 31, 2007 and 2006
Assets
2007 2006
Cash and due from banks $ 9,651,498 $ 9,644,723
Interest Bearing Balances 8,760,715 29,401,080
Total Cash and cash equivalents 18,412,213 39,045,803
Securities available for sale (Note 3) 132,414,918 130,686,653
Securities held-to-maturity (Note 3) 654,172 660,197
Loans, net of unearned discount (Note 4) 181,246,604 174,421,621
Less-Allowance for possible loan losses (Note 5) (1,840,318) (1,734,781)
Loans, net 179,406,286 172,686,840
Premises and equipment, net (Note 6) 5,014,663 4,735,473
Other real estate owned 231,532 70,881
Intangible assets (Note 18) 300,000 440,338
Other assets (Note 8) 10,226,931 10,220,947
Total Assets $ 346,660,715 $ 358,547,132
Liabilities and Stockholders’ Equity
Deposits (Note 7)
Non-interest-bearing deposits $ 47,707,690 $ 70,992,143
Interest-bearing deposits 253,326,079 242,844,840
Total Deposits 301,033,769 313,836,983
Federal funds purchased and other borrowed funds 6,125,000 9,048,205
Other liabilities (Note 8) 4,313,960 3,162,602
Total Liabilities 311,472,729 326,047,790
Commitments & Contingencies (Note 7 and 16)
Stockholders’ Equity
Common stock (Note 10) 851,010 851,010
Surplus 7,053,958 7,053,958
Undivided profits (Note 10) 27,268,394 26,865,007
Accumulated other comprehensive income 14,624 (2,270,633)
Total Stockholders’ Equity 35,187,986 32,499,342
Total Liabilities and Stockholders’ Equity $ 346,660,715 $ 358,547,132
The accompanying Notes to Financial Statements are an integral part of these statements.
Seaway Bancshares, Inc. 2007 Annual Report | 11

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Seaway Bank and Trust Company
Statements of Income
for the years ended December 31, 2007 and 2006
Interest Income
2007 2006
Interest and fees on loans $ 11,929,081 $ 11,276,782
Interest on investment securities
United States Government Obligations:
US Government and Treasuries 5,649,897 5,486,656
mortgage-Backed Securities 410,289 479,139
Obligations of state and political subdivisions 65,748 86,204
Other securities 118,854 139,898
Interest on federal funds sold and on other interest-bearing balances 463,127 643,133
Total Interest Income $ 18,636,996 $ 18,111,812
Interest Expense
Interest on time deposits $100,000 or more 5,385,515 5,364,721
Interest on other deposits 2,241,412 1,658,831
Interest on federal funds purchased and other borrowed funds 353,081 359,416
Total Interest Expense 7,980,008 7,382,968
Net interest income 10,656,988 10,728,844
Provision for possible loan losses (Note 5) (80,000) (134,000)
Net interest income after provision for possible loan losses $ 10,576,988 $ 10,594,844
Other Income
Service charges on deposit accounts 3,073,580 2,745,417
Other operating income 5,946,556 5,136,708
Gain on sale of investment securities — 101,651
Total Other Income $ 9,020,136 $ 7,983,776
Other Expenses
Salaries and employee benefits (Notes 14 and 15) 10,052,723 9,666,131
Occupancy expense of Bank premises (Note 6) 2,396,680 2,194,300
Other operating expenses 3,941,190 3,849,994
Total Other Expenses 16,390,593 15,710,425
Income before income taxes 3,206,531 2,868,195
Applicable income taxes (Note 8) (5,000) (17,364)
Net Income $ 3,201,531 $ 2,850,831
Net Income Per Share (Note 9) $ 37.62 $ 33.50
The accompanying Notes to Financial Statements are an integral part of these statements.
12 | Seaway Bancshares, Inc. 2007 Annual Report

Seaway Bank and Trust Company
Statements of Cash Flows
for the years ended December 31, 2007 and 2006
Operating Activities
2007 2006
Net Income $ 3,201,531 $ 2,850,831
Adjustments to reconcile net income to net cash
provided from (used by) operating activities:
Provision for loan losses 80,000 134,000
Provision for depreciation and amortization 567,843 529,308
Amortization of investment security premiums 42,207 91,002
Accretion of investment security discounts (47,462) (64,222)
Net change in deferred income taxes (6,275) (51,072)
Net decrease (increase) in interest receivable 176,975 (344,615)
Net increase in interest payable 405,385 194,665
Net increase in other assets (43,096) (355,768)
Net increase in other liabilities 754,577 267,991
Net cash provided from operating activities $ 5,131,685 $ 3,252,120
Investing Activities
Proceeds from sales and maturities of investment securities available for sale 15,265,000 25,892,687
Principal collected on investment securities available for sale 3,018,158 3,988,959
Principal collected on investment securities held for maturity 119,957 135,624
Purchases of investment securities available for sale (17,720,909) (12,880,201)
Purchases of investment securities held to maturity (113,932) (225,603)
Net increase in long-term loans (6,799,446) (11,256,092)
Purchases of premises and equipment (net) (847,033) (2,156,520)
Net increase in other real estate (160,651) (21,122)
Net cash (used by) investing activities $ (7,238,856) $ 3,477,732
Financing Activities
Net (decrease) increase in non-interest-bearing deposits (23,284,453) 31,332,008
Net increase (decrease) in interest-bearing deposits 10,481,239 (12,574,206)
Net decrease in federal funds purchased and other borrowed funds (2,923,205) (60,708)
Net increase in shareholder contribution — 6,000,000
Cash Dividends paid (2,800,000) (2,597,179)
Net cash (used by) provided from financing activities (18,526,419) 22,099,915
Net (decrease) increase in Cash and Cash Equivalents (20,583,590) 28,829,767
Cash And Cash Equivalents At Beginning of Year 39,045,803 10,216,036
Cash And Cash Equivalents At Year-End $ 18,412,213 $ 39,045,803
Interest Paid $ 7,980,008 $ 7,382,967
The accompanying Notes to Financial Statements are an integral part of these statements.
Seaway Bancshares, Inc. 2007 Annual Report | 13

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Seaway Bank and Trust Company
Statements of Changes in Stockholders’ Equity
for the years ended December 31, 2007 and 2006
Accumulated
Stockholders’
Other
Common undivided Comprehensive Total
Stock Surplus Profits Income eQuity
Balance December 31, 2005 $ 851,010 1,053,958 26,611,355 (2,798,944) $ 25,717,379
Dividends - $30.52/Share — — (2,597,179) — (2,597,179)
Investment by Parent 6,000,000 6,000,000
Comprehensive Income
Net Income — — 2,850,831 — 2,850,831
Other Comprehensive Income
Unrealized Gain on Available
for Sale Securities, Net of Tax — — — 528,311 528,311
Balance December 31, 2006 $ 851,010 7,053,958 26,865,007 (2,270,633) $ 32,499,342
Dividends - $32.90 /Share — — (2,800,000) — (2,800,000)
Comprehensive Income
Net Income — — 3,201,531 — 3,201,531
Other Comprehensive Income
Unrealized Gain on Available
for Sale Securities, Net of Tax — — — 2,285,259 2,285,259
Balance December 31, 2007 $ 851,010 7,053,958 27,266,538 14,626 $ 35,186,132
The accompanying Notes to Financial Statements are an integral part of these statements.
14 | Seaway Bancshares, Inc. 2007 Annual Report

Notes to Financial Statements
for the years ended December 31, 2007 and 2006
Note 1 - Summary of Significant Accounting and Reporting Policies
The financial reporting and accounting policies of Seaway Bancshares, Inc. (the “Corporation”)
and its subsidiary, Seaway Bank and Trust Company (the “Bank”), conform to
accounting principles generally accepted in the United States and to general practices
within the banking industry. The following is a summary of the significant accounting
policies.
Nature of Operations
Seaway Bancshares, Inc. is a bank holding company whose principal activity is the ownership
and management of its wholly-owned subsidiary Seaway Bank and Trust Company.
The Bank generates commercial, mortgage and consumer loans and receives deposits
from customers located primarily in Chicago, Illinois and the surrounding area. On
December 30, 2007, the Illinois Department of Financial and Professional Regulation
(IDFPR) approved the conversion of Seaway National Bank of Chicago to a bank
chartered by the State of Illinois. IDFPR issued a charter to the converting bank under
the name of Seaway Bank and Trust Company. The Bank is subject to regulation by the
Federal Deposit Insurance Corporation.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Corporation
and the Bank. All intercompany accounts and transactions have been eliminated in
the consolidated financial statements.
In accordance with Financial Accounting Standards Board Interpretation No. 46,
(R), “Consolidation of Variable Interest Entities” [“FIN 46 (R)”], The accompanying
consolidated financial statements do not include the accounts of a wholly-owned
financed subsidiary (the “Trust”). The Trust was formed for the sole purpose of issuing
Trust Preferred securities and, in turn, purchasing subordinated debentures from the
Corporation.
Under the provisions of FIN 46 (R), the Trust is considered a “Variable Interest Entity”
(“VIE”), which can only be consolidated if the Corporation is subject to a majority
of the risk of loss from the VIE activity or is entitled to receive a majority of the entity’s
residual returns. The design of the Trust, which is very common in the banking industry,
is such that the Corporation is neither subject to the majority of risk of loss nor entitled
to receive the majority of any residual returns. As a result, the Trust is not consolidated.
The Corporation does, however, report the subordinated debentures sold to the
Trust as a liability in the Consolidated Balance Sheets and associated interest expense in
the Consolidated Statements of Income.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates.
Investment Securities
Investment Securities are classified as follows:
Classification
Accounting Treatment
Held-to-Maturity
Carried at Amortized Cost
Trading Securities
Carried at fair value with unrealized holding gains
and losses included in earnings.
Available-For-Sale
Carried at fair value with unrealized holding gains
and losses excluded from earnings, and reported as
a separate component of Shareholders’ equity, net
of tax, as accumulated other comprehensive income
The decision to purchase securities is based on a current assessment of expected
economic conditions including the interest rate environment. The determination to sell
such securities is based on management’s assessment of changes in economic or financial
market conditions, interest rate risk and balance sheet and liquidity positions. The
adjusted cost of the specific security sold is the basis for determining gains and losses.
Loans
The Corporation’s loan portfolio includes residential and commercial mortgages,
commercial and consumer loan products. Loans are stated at unpaid principal balances,
less the allowance for loan losses and net deferred loan fees and unearned discounts.
Unearned discount is recognized as income over the terms of the loan by the sum-of-themonth
digit method, the result of which is not materially different from that obtained
by using the interest method. Interest on other loans is reported on the accrual basis
throughout the terms of the loans.
Loans are placed on a non-accrual (cash) basis for recognition of interest income
when interest earned in excess of ninety days is delinquent or principal is delinquent in
excess of ninety days and the loan is either not well collateralized or is in the process of
collection. The non-recognition of interest does not constitute forgiveness of the interest.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level that, in management’s judgment,
is adequate to provide for estimated probable losses from loans. The amount of the allowance
is based on management’s formal review and analysis of potential losses, as well
as prevailing economic conditions. The allowance is increased by provisions for losses,
which are charged to earnings and reduced by charge-offs, net of recoveries.
The allowance consists of specific, general, and unallocated components. The specific
component relates to loans that are classified as doubtful, substandard, or special
mention. For such loans that are also classified as impaired, an allowance is established
when the discounted cash flows (or collateral value or observable market price) of the
impaired loan is lower than the carrying value of that loan. The general component covers
non-classified loans and is based on historical loss experience adjusted for qualitative
factors. An unallocated component is maintained to cover uncertainties that could affect
management’s estimate of probable losses.
While management uses available information to recognize losses on loans, further
reduction in the carrying amounts of loans may be necessary based on changes in local
economic conditions. It is reasonably possible that the estimated losses on loans may
change materially in the near term. However, the amount of the change that is reasonably
possible cannot be estimated.
Impairment of Loans
Loans are considered impaired when it is probable that the total amount due, including
accrued interest, will not be collected according to the contracted terms and schedules
of the Loan Agreement. Income related to impaired loans is recognized when earned,
unless the loan has also been placed on a non-accrual (cash) basis, for the recognition of
interest income.
Fees Related to Lending Activities
Loan origination fees and direct loan origination costs that are incurred on a specific
loan are offset against each other and the net amount is deferred and recognized over
the life of the loan as an adjustment of the loans’ yield. Commitment fees and direct loan
origination costs that are incurred to make a commitment to originate a specific loan
shall be offset against each other and only the net amount is deferred and recognized
over the life of the loan as an adjustment of the loans’ yield.
Premises and equipment
Premises and equipment are stated at cost less accumulated depreciation. Depreciation
is computed on the straight-line method over the estimated useful lives of the related
assets, ranging from 3 to 40 years.
Income Taxes
Prior to 2001 the Corporation filed a consolidated Federal Income Tax return with
Seaway National Bank (the “Bank”). Amounts provided for income taxes were based on
income reported for financial statement purposes. Provisions for deferred income taxes
were made as a result of timing differences between the period in which certain income
and expenses are recognized for financial reporting purposes and the period in which
they affect taxable income. The principal items causing these timing differences were
the provision for possible loan losses and depreciation. Effective January 1, 2001, the
Corporation and the Bank jointly elected to be treated as an S Corporation for federal
income tax purposes. As an S Corporation, both the Corporation and the Bank are liable
for federal corporate level income taxes on certain “built-in gains” existing at December
31, 2000, which are recognized after that date and any applicable state corporate level
income taxes, (including the Illinois Replacement Tax). As a further consequence of the
S Corporation election, both the Corporation and the Bank were required to revalue
deferred tax assets and liabilities at the lower statutory tax rates applicable to S Corporations.
In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes -an interpretation
of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and
measurement process for recording in the financial statements uncertain tax positions
taken or expected to be taken in a tax return in accordance with SFAS No. 109 “Accounting
for Income Taxes.” Tax positions must meet a more-likely-than-not recognition
threshold at the effective date to be recognized upon the adoption of FIN 48 and in
subsequent periods. The accounting provision of FIN 48 was effective for the Company
beginning January 1, 2007. The impact of adoption on the Bank’s financial position and
results of its operations was not material.
Earnings Per Share
Earnings per share is computed by dividing income by the weighted average number of
shares outstanding during the period.
Cash Flow Reporting
The Corporation uses the indirect method to report cash flows from operating activities.
Under this method, net income is adjusted to reconcile to net cash flow from operating
activities. Net reporting cash transactions is used when the balance sheet items consist
predominantly of maturities of three months or less, or where otherwise permitted. Other
items are reported gross. Cash and cash equivalents consist of cash and due from banks.
Seaway Bancshares, Inc. 2007 Annual Report | 15

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Derivatives
The Financial Accounting Standard Board (FASB) Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended, established accounting and
reporting standards for derivatives. These standards require that all derivatives be recognized
at their fair value as either assets or liabilities on the balance sheet and specify the
accounting for changes in fair value depending upon the intended use of the derivative.
FAS No. 133, as amended, in the year 2001. The Corporation’s utilization of derivative instruments
for trading or non-trading is minimal, and the provisions of these standards are
not applied because the impact on the Corporation’s financial statements is not material.
Goodwill
The Corporation adopted FAS 142 effective January 1, 2002. The Corporation periodically
evaluates goodwill for impairment by comparing the carrying value to implied fair value.
The fair value is determined using a reasonable estimate of future cash flows from the
operations and a risk adjusted discount rate to compute a net present value of future cash
flows. Information pertaining to the accounting for goodwill is presented in Note 18.
Note 2 - Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each
class of financial instruments for which it is practicable to estimate such value:
Cash and short-term investments
For those short-term instruments, the carrying amount is a reasonable estimate of fair
value.
Investment securities
Fair value equals the quoted market price, if available. If a quoted market price is not
available, fair value is estimated using quoted market prices for similar investment
securities.
Loans
The fair value is estimated by discounting future cash flows using the appropriate rate
from the treasury yield curve, adjusted for credit risk and allocated expense.
Deposit liabilities and short-term borrowings
The fair value of demand deposits, savings accounts, NOW and money market deposits
is the amount payable on demand at the reporting date. The fair value of fixed maturity
certificates of deposit is estimated by discounting future cash flows using the appropriate
rate from the treasury yield curve adjusted for allocated expense. For short-term
borrowings the carrying amount is a reasonable estimate of fair value.
Long-term debt and securities sold not owned
The fair value of long-term debt and securities sold not owned are estimated by discounting
future cash flows using an appropriate rate from the treasury yield curve adjusted for
allocated expenses.
Core Deposit Intangibles
The fair value of core deposit intangibles is the present value of the projected cash
flow of core deposits discounted at the appropriate rate from the treasury yield curve
adjusted for allocated expenses and service charge income.
December 31, 2007: cOnsolidated Bank Only
estimated Fair Value approximate Carrying Value estimated Fair Value Approximate Carrying Value
Financial Assets:
Cash and Short-term Investments $ 18,463,000 $ 18,463,000 $ 18,462,000 $ 18,462,000
Investment Securities 131,951,000 131,951,000 131,951,000 131,951,000
Loans 177,571,000 181,246,000 177,571,000 181,246,000
Unallocated Reserves for loan losses — (1,840,000) — (1,840,000)
Loans, Net 177,571,000 179,406,000 177,571,000 179,406,000
Total Financial Assets $ 327,985,000 $ 329,820,000 $ 327,984,000 $ 329,819,000
Financial Liabilities
Deposits 300,148,000 300,148,000 301,034,000 301,034,000
Short-Term Borrowings 1,125,000 1,125,000 1,125,000 1,125,000
Long-Term Debt 10,660,000 11,186,000 5,597,000 5,000,000
Total Financial Liabilities 311,933,000 312,459,000 307,756,000 307,159,000
Core Deposit Intangibles 12,631,000 0 12,691,000 0
Fixed Assets and Net Other Assets and Liabilities 11,747,000 11,747,000 12,528,000 12,528,000
Net Total Asset Value $ 40,430,000 $ 29,108,000 $ 45,447,000 $ 35,188,000
December 31, 2006: cOnsolidated Bank Only
estimated Fair Value approximate Carrying Value estimated Fair Value Approximate Carrying Value
Financial Assets:
Cash and Short-term Investments $ 39,046,000 $ 39,046,000 $ 39,046,000 $ 39,046,000
Investment Securities 131,346,000 131,346,000 131,346,000 131,346,000
Loans 169,138,000 174,422,000 169,138,000 174,422,000
Unallocated Reserves for loan losses — (1,735,000) — (1,735,000)
Loan, Net 169,138,000 172,687,000 169,138,000 172,687,000
Total Financial Assets $ 339,530,000 $ 343,079,000 $ 339,530,000 $ 343,079,000
Financial Liabilities
Deposits 313,047,000 313,047,000 313,837,000 313,837,000
Short-Term Borrowings 48,000 48,000 48,000 48,000
Long-Term Debt 15,089,000 15,186,000 9,050,000 9,000,000
Total Financial Liabilities 328,184,000 328,281,000 322,935,000 322,885,000
Core Deposit Intangibles 19,513,000 0 19,612,000 0
Fixed Assets and Net Other Assets and Liabilities 11,679,000 11,679,000 12,305,000 12,305,000
Net Total Asset Value $ 42,538,000 $ 26,477,000 $ 48,512,000 $ 32,499,000
16 | Seaway Bancshares, Inc. 2007 Annual Report

Note 3 - Investment Securities
The following is a summary of investment securities classified as available-for-sale, at December 31, 2007:
amortized Cost Gross Unrealized Gross Unrealized F fair Value
holding Gains H holding Losses
Equity Securities $ 1,068,453 179,091 — $ 1,247,544
United States Government Agencies 118,076,148 107,681 — 118,183,829
Obligations of State and Political Subdivisions 914,853 26,536 — 941,389
Mortgage-Backed Securities 11,110,933 — 124,067 10,986,866
Other Investment Securities 1,150,000 — 94,710 1,055,290
Total $ 132,320,387 313,308 218,777 $ 132,414,918
The following is a summary of Investment securities classified as held-to-maturity, at December 31, 2007:
amortized Cost Gross Unrealized Gross Unrealized F fair Value
holding Gains H holding Losses
Other Investment Securities $ 654,172 — — $ 654,172
Total $ 654,172 — — $ 654,172
At December 31, 2007, investments in debt securities with a fixed maturity, classified as available-for-sale, are scheduled to mature as follows: (based on amortized cost:)
maturity
Within One Year one Through Five Years five Through Ten Years A after Ten Years
United States Government Agencies $ 6,999,591 31,164,469 43,687,968 $ 36,224,120
Obligations of State and Political Subdivisions 190,000 724,853 — —
Mortgage-Backed Securities 220,088 7,363,892 3,275,171 251,782
Other Investment Securities 50,000 1,000,000 50,000 50,000
Total $ 7,459,679 40,253,214 47,013,139 $ 36,525,902
At December 31, 2007, investments in debt securities classified as held-to-maturity, are scheduled to mature as follows:
maturity
Within One Year one Through Five Years five Through Ten Years A after Ten Years
Other Investment Securities $ — 14,251 35,980 $ 603,941
Total $ — 14,251 35,980 $ 603,941
The following is a summary of investment securities classified as available for sale, at December 31, 2006:
amortized Cost Gross Unrealized Gross Unrealized F fair Value
holding Gains H holding Losses
Equity Securities $ 1,328,851 433,898 — $ 1,762,749
United States Government Agencies 116,990,058 — 2,420,549 114,569,509
Obligations of State and Political Subdivisions 1,276,053 44,464 1,320,517
Mortgage-Backed Securities 12,126,145 — 192,957 11,933,188
Other Investment Securities 1,150,000 — 49,310 1,100,690
Total $ 132,871,107 478,362 2,662,816 $ 130,686,653
The following is a summary of investment securities classified as held-to-maturity, as of December 31, 2006:
amortized Cost Gross Unrealized Gross Unrealized F fair Value
holding Gains H holding Losses
Other Investment Securities $ 660,197 — — $ 660,197
Total $ 660,197 — — $ 660,197
At December 31, 2006, investments in debt securities with a fixed maturity, classified as available-for-sale, are scheduled to mature as follows: (based on amortized cost)
maturity
Within One Year one Through Five Years five Through Ten Years A after Ten Years
United States Government Agencies $ 1,000,000 39,149,118 50,269,877 $ 26,571,063
Obligations of State and Political Subdivisions 365,000 911,053 — —
Mortgage-Backed Securities 197,553 7,565,323 2,867,733 1,495,536
Other investment Securities — 1,100,000 50,000 $ —
Total $ 1,562,553 $ 48,725,494 $ 53,187,610 $ 28,066,599
At December 31, 2006, investments in debt securities classified as held-to-maturity, are scheduled to mature as follows:
maturity
Within One Year one Through Five Years five Through Ten Years A after Ten Years
Other Investment Securities $ — 18,875 50,713 $ 590,609
Total $ — 18,875 50,713 $ 590,609
Seaway Bancshares, Inc. 2007 Annual Report | 17

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
During 2007, sales proceeds and gross realized gains and losses on investment securities classified as available-for-sale and held to maturity were:
available for Sale
held to Maturity
Sales Proceeds $ 15,265,000 $ —
Gross Realized (Losses) — —
Realized Gains $ — $ —
During 2006, sales proceeds and gross realized gains and losses on investment securities classified as available-for-sale and held to maturity were:
available for Sale
held to Maturity
Sales Proceeds $ 25,892,687 $ —
Gross Realized (Losses) — —
Realized Gains $ 101,651 $ —
Investment securities carried at approximately $102,986,212 and $105,523,978 at December 31, 2007 and 2006 respectively, were pledged to secure public deposits and for other purposes
required by law.
Note 4 - Loans
Major classifications of loans included in the accompanying Statements of Condition at December 2007 and 2006 are as follows:
2007 2006
Consumer Loans $4,130,092 $4,528,892
Commercial and Industrial Loans 22,555,480 24,229,351
Real Estate Loans 125,209,853 126,037,111
Real Estate Construction Loans 29,351,302 19,626,741
Gross Loans 181,246,727 174,422,095
Less-Unearned Discount (123) (474)
Loans, Net of Unearned Discount $181,246,604 $174,421,621
At December 31, 2007 and 2006, loans aggregating $2,144,347 and $4,143,519 respectively, were outstanding to Officers, Directors and principal shareholders of the Bank or to corporations
in which such officers or directors had a beneficial interest. These loans were all made with substantially the same interest rates and collateral requirements as comparable loans to
non-related borrowers. During 2007, and 2006, new loans to such related parties amounted to $65,482 and $681,035 respectively. Loan repayments during the year amounted to $754,752
and $500,420 respectively. Non-accrual loans at December 31, 2007 and 2006 approximated $1,868,085 and $2,781,173 respectively. The amount of interest income, which would have
been recorded if the loans were on an accrual basis, would have approximated $111,357 during 2007, and $242,948 during 2006. Commercial and multi-family real estate loans aggregated
approximately $25,000,200 and $26,920,143 at December 31, 2007 and December 31, 2006 respectively. A majority of these properties are located in the Chicago metropolitan area.
These loans are collateralized by the related properties and the loan-to-value ratios generally do not exceed 75 percent.
Note 5 - Allowance for Possible Loan Losses and Impaired Loans
As of December 31, 2007 and December 31, 2006, the total recorded investment in impaired loans was $2,576,824 and $4,278,568, respectively. Of these amounts, in 2007 and 2006,
$936,201 and $1,534,780 were subject to an allowance for possible loan losses of $72,823 and $85,960, respectively. During 2007, the average recorded investment in impaired loans was
$2,939,857 and $4,844,238 in 2006. Interest income recognized in 2007 and 2006 during the period in which the loans were impaired was $140,588 and $152,573. The amount of income
that would have been recorded on a cash basis during 2007 and 2006 would have been $154,180 and $143,458.
Following is a summary of the activity in the Allowance for Possible Loan Losses:
2007 2006
Balance at Beginning of Year $ 1,734,781 $ 2,131,380
Recoveries credited to the allowance 335,431 43,034
Provision for possible loan losses 80,000 134,000
Loans charged-off (309,894) (573,633)
Balance at End of Year $ 1,840,318 $ 1,734,781
18 | Seaway Bancshares, Inc. 2007 Annual Report

Note 6 - Premises and Equipment
A summary of premises and equipment at December 31, 2007 and 2006 is a follows:
C o cOnsolidated Bank Only
2007 2006 2007 2006
Premises $ 7,033,362 6,832,250 7,175,219 $ 6,974,107
Equipment 4,872,710 4,184,106 4,872,710 4,184,106
11,906,072 11,016,356 12,047,929 11,158,213
Less-Accumulated Depreciation (7,033,266) (6,422,740) (7,033,266) (6,422,740)
Net Book Value $ 4,872,806 4,593,616 5,014,663 $ 4,735,473
Depreciation charged to consolidated operating expenses amounted to $567,843 and $529,308 for 2007 and 2006 respectively. Equipment rental expense for 2007 and 2006 was $13,816
and $13,846 respectively.
Note 7 - Deposits
C o cOnsolidated Bank Only
2007 2006 2007 2006
Non-Interest-Bearing Deposits
Deposits of individuals, partnerships and corporations $ 10,786,500 37,606,235 11,671,962 $ 38,395,662
Deposits of the United States Government 136 745 136 745
Deposits of state and political subdivisions 34,177,972 27,271,120 34,177,972 27,271,120
Certified and official checks 1,857,620 5,324,616 1,857,620 5,324,616
Total non-interest-bearing deposits 46,822,228 70,202,716 47,707,690 70,992,143
Interest-Bearing Deposits:
Deposits of individuals, partnerships and corporations 187,580,551 176,929,243 187,580,551 176,929,243
Deposits of the United States Government 8,513,676 11,311,702 8,513,676 11,311,702
Deposits of state and political subdivisions 53,527,751 53,152,334 53,527,751 53,152,334
Other Depository Institutions in US 3,704,101 1,451,561 3,704,101 1,451,561
Total Interest-Bearing Subdivisions 253,326,079 242,844,840 253,326,079 242,844,840
Total Deposits $ 300,148,307 313,047,556 301,033,769 $ 313,836,983
Certificates of deposit of $100,000 or more included in the balance of interest-bearing deposits amounted to $99,172,123 and $99,818,269 at December 31, 2007 and 2006 respectively.
Certificates of deposits maturing in years ending December 31, at December 31, 2007:
2008 $ 96,425,514
2009 10,954,786
20010 2,342,128
20011 560,247
20102 and thereafter 23,896,427
$ 134,179,102
At December 31, 2007, deposits of executive officers, directors, and principal shareholders of the Bank and corporations in which such officers or directors had a beneficial interest total
approximately $9,556,601.
Seaway Bancshares, Inc. 2007 Annual Report | 19

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Note 8 - Income Taxes
Effective January 1, 2001, the Corporation and the Bank jointly elected to be treated as an S Corporation for federal income tax purposes. As an S Corporation, the Corporation and the
Bank are generally only currently liable for federal corporate level income taxes on certain “built-in gains” existing at December 31, 2000 which are recognized after that date and any
applicable state corporate level income taxes (including the Illinois Replacement Tax). As a further consequence of the S Corporation election, the Corporation and the Bank have been
required to revalue certain deferred tax assets and liabilities at the lower statutory tax rates applicable to S Corporations.
The current and deferred components of income tax expenses are as follows:
C o cOnsolidated Bank Only
2007 2006 2007 2006
Current Federal $ 16,827 $ $ 16,827
State 14,169 (1,878) 12,064 (1,878)
Deferred (9,169) 2,415 (7,064) 2,415
Total $ 5,000 17,364 $ 5,000 $ 17,364
The sources of timing differences resulting in deferred income taxes and the tax effects for the years ended December 31, 2007 and 2006, on a consolidated and bank basis are as follows:
C o cOnsolidated Bank Only
2007 2006 2007 2006
Loan loss deduction charged to operating expenses
less than (in excess of) that for income tax purposes $ (1,583) 5,949 (1,583) $ 5,949
Depreciation expense for income tax purposes in excess
of the amount charged to operating expense (1,729) 688 376 688
State Income Tax — —
Accretion of bond discount, Net 446 (292) 446 (292)
Other (6,303) (3,930) (6,303) (3,930)
$ (9,169) $ 2,415 (7,064) $ 2,415
As a result of FAS 115, which relates to the recording of unrealized security gains and losses, the following deferred tax items are not included in the above tables and are charged or credited
directly to shareholders’ equity: at December 31, 2007, and 2006, $86,549 and $92,824 of tax liabilities, respectively, were recorded for unrealized security gains relating to securities
classified as available for sale.
The effective tax rates for both the Corporation and the Bank are less than the statutory Federal Income Tax rates. The reasons for the difference between such rates and the Federal
Income Tax statutory rates for 2007 and 2006 are as follows:
December 31, 2007 cOnsolidated Bank Only
amount percent of Pretax Income A amount percent of Pretax Income
Tax expense at statutory rate $ 866,487 34.0% 1,088,521 34.0%
Increase (reduction) in taxes resulting from:
S Corporation Election (802,517) (31.5) (1,024,551) (32.0)
Tax Exempt Interest (20,001) (0.8) (20,001) (0.8)
Built-In Gains Tax
State Replacement Tax 12,064 0.5 12,064 0.4
Other (51,033) (2.0) (51,033) (1.6)
Net Reduction (861,487) (33.8) (1,083,521) (33.8)
$ 5,000 0.2% $ 5,000 0.2%
December 31, 2007 cOnsolidated Bank Only
amount percent of Pretax Income A amount percent of Pretax Income
Tax expense at statutory rate $ 974,701 34.0% $ 974,701 34.0%
Increase (reduction) in taxes resulting from:
S Corporation Election (939,760) (32.8) (939,760) (32.8)
Tax Exempt Interest (29,387) (1.0) (29,387) (1.0)
Built-In Gains Tax 16,827 0.6 16,827 0.6
State Replacement Tax (1,876) (0.1) (1,878) (0.1)
Other (3,141) (0.1) (3,141) (0.1)
Net Reduction (957,337) (33.4) (957,339) (33.4)
$ 17,364 0.6% $ 17,362 0.6%
Included in Other Liabilities in 2007 and Other Assets in 2006 of the Consolidated and Bank-Only Statements of Condition are deferred tax assets and liabilities as follows:
C o cOnsolidated Bank Only
2007 2006 2007 2006
Deferred Tax Asset $ 54,944 $ 43,061 $ 54,944 $ 43,061
Deferred Tax Liability (93,983) (99,434) (93,983) (99,434)
Net Deferred Tax Assets/(Liabilities) $ (39,039) $ (56,373) $ (39,039) $ (56,373)
20 | Seaway Bancshares, Inc. 2007 Annual Report

Note 9 - Long-Term Debt-subordinated Debentures
In 2006, the Corporation formed a wholly-owned unconsolidated finance subsidiary
(“Trust”), for the sole purpose of issuing $6 million of Trust Preferred securities. The
proceeds of the Trust Preferred securities, along with proceeds of $186,000 from the
issuance of common securities by the Trust to the Corporation, were used to purchase
$6.186 million of the Corporations fixed rate junior subordinated notes (“Debentures”).
The Debentures mature 30 years from the issuance date, but are redeemable (at
par) at the Corporation’s option at any time commencing on the fifth anniversary of the
issuance (or upon the occurrence of certain other prescribed events). Interest payments
on the debentures are payable quarterly. So long as an event of default has not occurred
(described further below), the Corporation may defer interest payments for up to 20
consecutive quarters. Events of default include failure to pay interest at maturity, or filing
bankruptcy.
If the Corporation were to elect to defer interest on the Debentures, the Corporation
would generally be restricted from declaring or paying any dividends to common
shareholders or repurchasing its common stock.
Debentures outstanding totaled $6.186 million at December 31, 2007. The scheduled
maturity of the Debenture is $6.186 million in 2036. Interest and fees included in interest
expense totaled $385,000 at December 31, 2007. The Debenture interest rate is fixed
for 5 years at 6.43% and then after floating at the 6 month Libor rate plus 159 basis points.
Note 10 - Common Stock
The following schedule summarizes the information concerning the common stock of the Corporation and the Bank at December 31, 2007 and 2006.
C o cOnsolidated Bank Only
2007 2006 2007 2006
Par Value $ 1 $ 1 $ 10 $ 10
Shares Authorized 400,000 400,000 93,750 93,750
Shares Outstanding 301,513 301,513 85,101 85,101
Weighted average number shares outstanding 301,513 301,513 85,101 85,101
Note 11 - Regulatory Matters
The Corporation’s principal source of income is the payment of dividends on the stock
of the banks owned by the Corporation. Illinois law restricts the Banks’ ability to pay
these dividends. Under the Illinois Banking Act, no dividend may be declared by an
Illinois state-chartered bank (i) except out of the bank’s net profits and (ii) unless the
bank has transferred to surplus at least one-tenth of its net profits since the date of the
declaration of the last preceding dividend, until the amount of its surplus is at least equal
to its capital. Net profits under the Illinois Banking Act must be adjusted for losses and
bad debts (i.e. debts owing to the bank on which interest is past due and unpaid for a
period of six months or more unless such debts are well secured and in the process of
collection).
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
(“FDICIA”), no insured depository institution may declare any dividend if, following the
payment of such dividend, the institution would be undercapitalized.
The Bank is required to have minimum tier one and total risk based capital ratios of
6% and 10% respectively. The Bank’s actual ratios as of December 31, 2007 and December
31, 2006 were 17.73% and 18.71% and 17.53 % and 18.52% respectively. The Bank’s leverage
ratio at December 31, 2007 and December 31, 2006 was 10.30 % and 10.05% respectively.
Note 12 - Acquisition of Seaway Bank and Trust Company
Common Stock
On September 29, 1987, the Corporation consummated a transaction in which it acquired
the remaining 1,130 shares of bank common stock. Under the terms of this transaction,
the Bank was merged with an interim bank. The bank resulting from the merger
continued to conduct the business of the Bank with the same officers and directors, and
with all the same rights, duties, powers and obligations which the Bank held immediately
prior to the merger. Upon consummation of the merger, the holders of the remaining
1,130 shares of Bank common stock relinquished any ownership interest in the Bank
and became entitled to receive $145.00 cash for each of their shares. At September 29,
1987, the Corporation owned 100% of outstanding common stock of the Bank. Payment
to the holders of the 1,130 shares of Bank common stock is made by the Corporation
upon delivery of the certificates representing such shares. As of December 31, 2007 and
2006, 315 shares respectively, had not been delivered to the Corporation. The amount
due to these shareholders was $45,675 at December 31, 2007 and December 31, 2006,
respectively.
Note 13 - Seaway Community Development Corporation
On March 15, 1997 the Corporation guaranteed a $400,000 Line of Credit extended to
Seaway Community Development Corporation (SCDC) by Bank of America, N.A. Effective
November 30, 2007, the Corporation guaranteed the renewed Line of Credit Agreement,
which expires on November 30, 2008. At December 31, 2007 and 2006, SCDC had
outstanding advances of $94,965 and $194,965 respectively.
Note 14 - Profit Sharing Trust
On January 1, 1977, the Board of Directors of the Bank adopted an Employee Profit Sharing
Plan for those employees with a minimum of one year of service. Effective January 1,
1989, the Board of Directors adopted the Seaway National Bank Employee Savings Plan.
The two plans were merged as of March 31, 1990 to form the Seaway National Bank Profit
Sharing Trust (the “Trust”). The Trust qualifies under Internal Revenue Code sections
401 and 501.
The Bank makes contributions to the Trust from its current or accumulated profits,
as well as, a matching contribution on behalf of each qualified employee equal to 25%
of the employee’s matchable salary reduction of up to 4%. Employees may elect to make
a salary reduction contribution on an optional basis up to a maximum of 12% of their
annual earnings. Contributions of the Bank and employees are subject to certain Internal
Revenue Code limitations. Vesting in the Trust begins after two years of service and
employees are fully vested after seven years of service. The Bank’s contributions to the
Trust were $178,560 and $100,000 in 2007 and 2006, respectively.
Seaway Bancshares, Inc. 2007 Annual Report | 21

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Note 15 - Stock Option Plan
In December of 1998, The Seaway National Bank Incentive Stock Option Plan (ISO) was
established. Participants in the Plan shall be selected by the Board of Directors from
among the Bank’s executive officers and any other key employees of the Bank who have
the capability of making a substantial contribution to the Bank. The aggregate number
of shares, which may be issued under the options granted pursuant to the Plan shall be
25,000 Common Shares. The grant of incentive stock options (ISO) will be considered
annually at a regularly scheduled board meeting. The price per share of Common Stock
payable upon exercise of an ISO shall be equal to 110% of the fair market value of a share
of Common Stock on the date the ISO is granted. The Bank will engage the services
of an independent business valuation company to determine the fair value of a share of
Common Stock on the date the ISO is granted. Each ISO shall be fully exercisable upon
issuance and may be exercised during a period of ten (10) years, commencing on the date
of grant. The Plan was terminated effective October 1, 2003 by the Board of Directors in
August 2003.
In August 2003, The Board of Directors approved the Executive Incentive Plan
(Phantom) and the Supplemental Executive Retirement Plan, (SERP). These plans were
designed to replace the ISO Plan. The Board of Directors in December 2007 and 2006,
respectively, awarded 550 and 500 Phantom Stock Units. The expense recorded in 2007
and 2006 for the Phantom Plan was $63,703 and $26,313, respectively. The SERP Plan
provides an incentive for continuing performance by key executives and provides for
additional retirement benefits. During 2003, The Bank purchased a $4.3 million bankowned
life insurance contract to fund the plan. The contract has been reported in the
financial statement in other assets. At December 31, 2007 and 2006 cash surrender value
was $5,061 and $4,871 million, respectively. The expense for the SERP recorded in 2007
and 2006 was $293,421 and $239,777, respectively.
Note 16 - Commitments and Contingencies
The Bank’s financial statements do not reflect various commitments and contingent liabilities which arise in the normal course of business and which involve elements of credit risk,
interest rate risk and liquidity risk. These commitments and contingent liabilities are commitments to extend credit and standby letters of credit. A summary of the Bank’s commitments
and contingent liabilities at December 31, 2007 and 2006 are as follows:
aPProximate Amount
2007 2006
Commitments to Extend Credit $ 53,657,751 $ 62,370,402
Home Equity Loans $ 462,667 $ 504,267
Standby Letters of Credit $ 341,870 $ 929,100
Commitments to extend credit, home equity lines of credit and standby letters of credit all include exposure to some credit loss in the event of non-performance by the customer. The
Bank’s credit policies and procedures for credit commitments and financial guarantees are the same as those for the extension of credit that are recorded on the Statement of Condition.
Because these instruments have fixed maturity dates and because many of them expire without being drawn upon, they do not generally present any significant liquidity risk to the Bank.
Generally, home equity lines are secured by real property and standby letters of credit are secured by deposits or other acceptable collateral. The Bank does not anticipate any losses
as a result of these commitments.
The Bank is a defendant in legal actions arising from normal business activities. Management believes that those actions are without merit or that the ultimate liability, if any, resulting
from them will not materially affect the Bank’s financial position.
Note 17 - Retirement of Certain Seaway Bancshares, Inc.
Common Stock
On September 27, 2000, Seaway Bancshares, Inc. made an offer of $80.00 a share to any
stockholder who owned 500 or fewer shares of common stock. This offer expired on
October 27, 2000. Related to this offer 1,171 shares valued at $93,680 were tendered.
On October 19, 2000 the Board of Directors of Seaway Bancshares, Inc. approved
a resolution to effectuate a reverse stock split on a 101 to 1 basis on all of the issued
and outstanding shares of record on the close of business on November 14, 2000, and
to retire fractional shares at a price of $77.00 per share. The Corporation retired 479
shares valued at $36,883 under this resolution. The Corporation upon completion of the
stock split, acquired from shareholders who owned fewer than 100 shares of the common
stock, 316 shares that were not tendered at December 31, 2000 under the November 14,
2000 offer. The value of these shares acquired, but not tendered, was $2,695 at December
31, 2007 and 2006, respectively, and is included in Other Liabilities on the Seaway
Bancshares, Inc. financial statements. The Corporation authorized a 100 to 1 stock split
effective as of 12:00 a.m. on November 15, 2000.
Note 18 - Intangible Assets
In late December, 2000, certain assets of the banking operations of Highland Community
Bank were acquired. The excess of the cost of this acquisition over the fair value
of the acquired net assets at the date of acquisition is reported as intangible assets. The
Corporation adopted FAS 142 effective January 1, 2002, and accordingly, has ceased
amortizing amounts related to goodwill starting from that date.
As required by FAS 142, goodwill is subject to an annual impairment test. The test
consists of a two-step process whereby a determination is made as to whether impairment
exists, and then whether an adjustment is required. Impairment losses were
recognized in 2007 in the amount of $140,338. The aforementioned banking operations
have been submitted to bid by the City of Chicago. A number of local Banks and Financial
Service Companies, along with Seaway Bank and Trust Company have submitted
bids. Currently, it is impossible to predict the outcome of the bidding process. We are
confident that we have submitted a highly competitive bid. However, our analysis indicates
that it would be prudent to recognize an impairment loss to accurately report the
current fair value of the goodwill.
22 | Seaway Bancshares, Inc. 2007 Annual Report

Independent Auditor’s Report
To the board of directors and stockholders of seaway bancshares, inc. and subsidiary
We have audited the accompanying consolidated statements of financial condition of Seaway Bancshares, Inc. (a
Delaware Corporation) and Subsidiary as of December 31, 2007 and 2006, and the related consolidated statements
of income, changes in stockholders’ equity, and cash flows for the years then ended and the accompanying
statements of financial condition of Seaway Bank and Trust Company as of December 31, 2007 and 2006, and the
related statements of income, changes in stockholders’ equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an
opinion on these financial statements based upon our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Seaway Bancshares, Inc. and Subsidiary and Seaway Bank and Trust Company as of December 31, 2007
and 2006, and the results of operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Washington, Pittman & McKeever, LLC
Chicago, Illinois
March 7, 2008
Seaway Bancshares, Inc. 2007 Annual Report | 23

Seaway Bancshares, Inc. 2 0 0 7 A n n u a l R e p o r t
Board of Directors and Officers
Seaway Bank and trust company
Board of Directors
Jacoby Dickens
Chairman of the Board
Walter E. Grady
President & Chief Executive
Officer
Richard S. Abrams
Executive Vice President &
Chief Operating Officer
William Bates, Jr.
Executive Vice President &
General Counsel
Joseph Caldwell
President
Tailo-Rite Clothing Care
James Compton
President & Chief Executive
Officer - Retired
Chicago Urban League
Dr. Elnora Daniel
President
Chicago State University
Phyllis Davis
President
Phyllis Davis Real Estate
David A. Kelly
Vice President - Retired
NiSource, Inc.
Jory Luster
President
Luster Products
officers
Sandra Alfonso
Airport Operations Officer
Gail L. Bahar
VP/Human Resources Officer
David Becerra
Retail Loan Officer —
Waukegan LPO
Virgil Booker
VP/Retail Loan Officer
Ronald Branch
Commercial Loan Officer
Terrence Chambers
Business Development Officer
Danny Davis
Commercial Loan Officer —
Waukegan LPO
Terrence Grady
Commercial Loan Officer
Claudette Harris
AVP/Marketing Officer
Daren Hobbs
AVP/Commercial Loan Officer
David Hollins
AVP/Operations Officer
TyAnna Holmes
Bookkeeping Officer
Kathleen Martin
Teller Operations Officer
Patricia McCreary
SVP/Cashier
Jacqueline McCune
Trust Officer
Tracy Meeks
VP/Commercial Loan Officer
Musibau Oriola
VP/Airport Operations Officer
Trina E. Phelps
VP/Internal Auditor/Loan Review
Officer
Morris Simpson
Assistant Comptroller
Alice Stewart
Business Development Officer
Daniel Taylor
Interim SCDC Director
Brenda Terrell
Administrative Services/Security
Officer
Denise Weaver
VP/BSA/Compliance Officer
Arlene Williams
EVP/Lending
Addie Collins
AVP/Retail Loan Officer
Lois B. Jenkins
VP/Trust Officer
Dwayne Shipp
VP/Comptroller
April Wright
AVP/Loan Operations/
Credit Administration Officer
24 | Seaway Bancshares, Inc. 2007 Annual Report

Banking Facilities
Design: Stephen B. Starr Design, Inc. Editorial: Kevin Cranfill Principal Photography: Jim Morris Photography Printing: Elk Grove Graphics
Main Bank
645 East 87th Street
Chicago, IL 60619
West Facility
Chatham Ridge Shopping Center
8652 South Lafayette Avenue
Chicago, IL 60620
South Facility
11116 South Michigan Avenue
Chicago, IL 60628
East Facility
825 East 87th Street
Chicago, IL 60619
Loan Production Office
1334 North Lewis Avenue
Waukegan, IL 60085
Airport Facilities
O’Hare International Airport
Foreign Currency Exchange
Terminals 1, 2, 3 and 5
Depository, Terminals 2 and 5
Chicago, IL 60666
Midway International Airport
Foreign Currency Exchange
Concourse A
5700 South Cicero Avenue
Chicago, IL 60638
Additional ATM Facilities
City Colleges of Chicago
City of Chicago Revenue Office
2006 East 95th Street
Chicago, IL 60617
2550 West Addison
Chicago, IL 60618
Kimbark Liquors
1214 East 53rd Street
Chicago, IL 60615
McCormick Place
2301 South Lake Shore Drive
Chicago, IL 60615
Skyway Bowl
9915 South Torrence Avenue
Chicago, IL 60617
YMCA
6330 Stony Island
Chicago, IL 60637

Seaway Bancshares, Inc.
645 East 87th Street
Chicago, Illinois 60619
773. 487. 4800
www.seawaybank.us