Lumbee Guaranty Bank : 2021 Annual Report

2021ANNUAL REPORT

In This

2021

Report

Table of Contents

Selected Financial Data .................................... 1

Leer to the Shareholders ................................ 2

Board of Directors ........................................... 3

Management's Discussion ............................. 4-6

Independent Auditor's Report .......................... 7

Financial Statements ................................... 8-11

Our Team ........................................................ 12

Stockholder Informaon ................................ 13

Lumbee Guaranty Bank - 2021 Annual Report

Selected Financial Data

Selected Financial Data

The following table sets forth certain selected financial data concerning the Bank for the years ended

December 31, 2021, 2020, 2019, 2018, and 2017. This information should be read in conjunction with

The following table sets forth certain selected financial data concerning the Bank for the years ended

December 31, 2021, 2020, 2019, 2018, and 2017. This information should be read in conjunction with and is and is qualified in its entirety by reference to the detailed audited financial statements and notes qualified in its entirety by reference to the detailed audited consolidated financial statements and notes thereto which are included in this Annual Report.

thereto which are included in this Annual Report.

2021

Income Statement Data

(in thousands) Interest Income Interest Expense Net Interest Income

$

Provision for loan loss

Net interest income after provision for loan lossNoninterest income Noninterest expense Income taxes

Net Income

Per Share Data

Net income

$

Year end book value Dividends declared Common Dividends declared Class A

Balance Sheet Data

(in thousands) Loans, net Investments Total Assets Deposits Shareholders' Equity

$

178,701

227,691 103,798 473,266 319,431 421,575 276,842 43,248 36,377

722 703 13,839 11,869

2020	2019	2018
$ 13,623 1,472 12,151 300 11,851 1,995 11,072 307 $2,467 $ 0.73 12.69 0.24 0.30 $ 210,536 136,778 417,194 362,088 42,948	$ 13,437 1,054 12,383 167 12,216 2,194 10,791 516 $3,103 $ 0.91 11.11 0.21 -$ 180,837 104,599 336,329 289,378 37,973

2017

14,561

• $ 12,572

  (325) 118 14,164 11,751 2,026 2,158 11,583 11,171 584 882 $4,023 $1,856

  1.19

• $ 0.54

  12.87 10.52 0.25 0.19

  0.31

  -

• $ 174,928

Lumbee Guaranty Bank - 2021 Annual Report 1

TO OUR SHAREHOLDERS

I am pleased to invite you to our annual shareholders' meeng to be held virtually on Wednesday, May 25, 2022, at 1:00 PM. We have provided specific instrucons in our proxy statement on how to parcipate.

On behalf of our Board of Directors and our employees, let me thank you for your ongoing support of your Bank. Because of your commitment and support, we are able to furnish capital, provide jobs, and reinvest in our local communies here in southeastern North Carolina. Lumbee Guaranty Bank exists to serve the counes of Cumberland, Hoke, and Robeson and the surrounding region by delivering the best financial products via excellent customer service. Thank you for supporng that mission.

Within our Annual Report, you will find last year's financial highlights in summary form, as well as other relevant informaon for your review. You will note that 2021 yielded strong earnings for your bank. As we celebrated our 50th anniversary, it was appropriate that the bank posted record profits to mark such an important milestone.

As the COVID-19 pandemic persisted, our focus remained on protecng the health and safety of our employees and customers while sll connuing to meet the needs of our customers. Despite the challenges presented by the virus, we were able to move our bank forward in many ways in 2021. Some of the accomplishments our employees were able to achieve include:

• • Compleon of forgiveness by the Small Business Administraon of 100% of the nearly 600 Paycheck Protecon Program loans totaling over $31 million - These loans provided needed capital to small businesses in our community and helped protect thousands of jobs in our region.

• • A total redesign and relaunch of our retail checking account lineup - Our new, simplified slate of checking accounts offers greater benefits and improved

  technology to our customers.

• • The introducon of Zelle into our payment opons - This well-known payment soluon is now integrated in our mobile banking app to offer a fast, easy way to transfer money between individuals quickly and safely.

• • The launch of tokenizaon - With Apple Pay, Google Pay, and several other digital wallets, our customers now have access to world-class payment plaorms.

• • The creaon of an insurance partnership - By joining a consorum of community banks in North Carolina, we can now provide an avenue for our customers to request compeve rates on a variety of insurance products.

Addionally, we were able to significantly reduce our non-performing assets and increase efficiency through projects like installaon of a bankwide VoIP phone system. All of these efforts produced, as stated earlier, record earnings, asset growth of 13%, a 12% stock price appreciaon, and an increased dividend for all shareholders.

Fiſty years ago, a group of concerned local leaders had an idea to start a community bank to serve the unserved. What started as just a dream has grown into an instuon of almost $500 million in assets and nearly 100 employees serving a three-county area as a full-service commercial bank. Without your support, the fulfilment of the dream would not have been possible, nor would our connued mission of future growth. Thank you again for helping us be "Your Community Bank".

Please review, vote, and return your proxy card as soon as possible or vote online.

Sincerely,

Kyle R. Chavis

Chief Execuve Officer

2

Lumbee Guaranty Bank - 2021 Annual Report

BOARD of DIRECTORS

LARRY R. CHAVIS

Chairman of the Board Rered, Bank CEO and President

ARNOLD LOCKLEAR

Vice Chairman of the Board

Rered, Aorney

REDELL COLLINS

Secretary of the Board

Owner, Redell Collins Construcon Company

LARRY T. BROOKS

Rered, Principal

SYBIL BULLARD

Vice President of Markeng Southeastern Grain Company, LLC

CHRISTOPHER DIXON

Partner

Haigh, Byrd & Lambert, LLP

DAVID E BROOKS, DVM

Pembroke Veterinary Hospital

DERRICK STATEN

Rered, Banking Execuve

JAMES THOMAS

Rered, BellSouth

Lumbee Guaranty Bank - 2021 Annual Report

3