2021 Annual Report

Noninterest Income 2021 Compared to 2020 Noninterest income was $5.3 million for the year ended December 31, 2021, compared to $5.8 million for the year ended December 31, 2020, a decrease of $530,000, or 9.1%. The decrease was primarily due to lower gains on sales of securities and swap fees, offset partially by bank owned-life insurance income. 2020 Compared to 2019 Noninterest income was $5.8 million for the year ended December 31, 2020, compared to $3.8 million for the year ended December 31, 2019, an increase of $2.0 million, or 52.6%. The increase was primarily due to an increase in gains on sales of securities, letter of credit fees, and swap fees. The following table presents the major components of noninterest income for the year ended December 31, 2021, compared to the year ended December 31, 2020, and for the year ended December 31, 2020, compared to the year ended December 31, 2019: Noninterest Income: Customer Service Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,007 $ 826 $ 181 $ 826 $ 760 $ 66 Net Gain on Sales of Securities . . . . . . . . . . . . . . . . . . . . 750 1,503 (753) 1,503 516 987 Net Gain on Sales of Foreclosed Assets . . . . . . . . . . . . . — — — — 69 (69) Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,676 1,503 173 1,503 1,184 319 Debit Card Interchange Fees . . . . . . . . . . . . . . . . . . . . . . 563 428 135 428 418 10 Swap Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 907 (907) 907 255 652 Bank-Owned Life Insurance . . . . . . . . . . . . . . . . . . . . . . 316 — 316 — — — Other Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997 672 325 672 624 48 Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,309 $ 5,839 $ (530) $ 5,839 $ 3,826 $ 2,013 Noninterest Expense 2021 Compared to 2020 Noninterest expense totaled $48.1 million for the year ended December 31, 2021, a $2.7 million, or 6.0% increase from $45.4 million for the year ended December 31, 2020. The increase was primarily driven by a $5.3 million increase in salaries and employee benefits as the result of merit increases and increased staff to meet the needs of the Company’s growth, offset partially by a decrease in debt prepayment fees primarily attributable to a $7.0 million non- recurring prepayment fee associated with the early extinguishment of $94.0 million of higher priced FHLB term advances, incurred in 2020. Full-time equivalent employees increased from 183 as of December 31, 2020, to 220 as of December 31, 2021. Despite the uncertainty surrounding the COVID-19 pandemic, the Company continues to add key talent across the organization. Efficiency Ratio. The efficiency ratio, a non-GAAP financial measure, reports total noninterest expense, less amortization of intangible assets, as a percentage of net interest income plus total noninterest income less gains (losses) on sales of securities. Management believes this non-GAAP financial measure provides a meaningful comparison of operational performance and facilitates investors’ assessments of business performance and trends in comparison to peers in the banking industry. The Company’s efficiency ratio, and its comparability to some peers, is negatively impacted by the amortization of tax credit investments, as well as other non-routine items, within noninterest expense. Year Ended December 31, Year Ended December 31, Increase/ Increase/ (dollars in thousands) 2021 2020 (Decrease) 2020 2019 (Decrease)

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