DILUTION

Organizers/directors are paying $10.00 per share for the common stock, the same price offered to you. Accordingly, there is technically no present dilution in your investment in the common stock. The book value of Bankshares, however, will be less than ten ($10.00) dollars per share, due to organizational expenses involved in opening Smith River. Please see "Use of Proceeds" on page 10.

In addition to the stock purchased, however, the organizers/directors also are receiving one warrant for each share of stock, at no additional cost to them. Accordingly, we expect that 87,500 warrants will be issued. Each warrant will allow the holder to purchase additional shares of stock at ten ($10.00) dollars per share. Similarly, the Board has already agreed to and intends to issue to Mr. McCullar on the date Smith River opens options to purchase 30,000 shares of common stock, 10,000 of which will become exercisable on each of the first three anniversaries of Smith River's opening at the fair market value of the stock on the date of grant. Any holder of these warrants or options can trade the warrants for the same number of shares of common stock at a price per share of $10.00, or in the case of Mr. McCullar's options, at the fair market value when Smith River opens. If our stock market value exceeds these values in the future when the warrants and options are exercisable, the holders of the warrants and options can obtain additional shares at less than fair market value at the time of exercise. Depending on the number exercised, this could influence the market to reduce the trading price of our stock and could have a material effect on the value of the stock you hold. See "Certain Transactions-Warrants and Stock Options" at pages 25-26.