An Euler-Bernoulli beam system under the local internal distributed control and boundary point observation is studied. An infinite-dimensional observer for the open-loop system is designed. The closed-loop system that is non-dissipative is obtained by the estimated state feedback. By a detailed spectral analysis, it is shown that there is a set of generalized eigenfunctions, which forms a Riesz basis for the state space. Consequently, both the spectrum-determined growth condition and exponential stability are concluded.