CEO Corner

We had an exciting first half of 2018 as we completed our merger and conversion. While the bulk of operational services have been consolidated, a couple of additional changes are still needed. This includes migrating former ACBB clients who utilize foreign check services to a new platform as well as vault services changes for former BBN clients. The latter includes a new portal, in addition to the way armored car services are provided. Customer training for these will be offered for the remainder of 2018.

We added Joe Krzywicki (see Employee Spotlight) to our senior team. Joe will head up Sales and Marketing and report to Craig Howie, Senior Executive Vice President. Joe is a great addition to ACBB and I hope you’ll get an opportunity to meet him.

Our technology and compliance business continues to grow. Both Jerry Murphy, CEO of BITS, and Nancy Lake, Director of Compliance Anchor, have done a great job. BITS has grown to 103 customers in 18 states, while Compliance Anchor maintains 99 customers in 11 states.

We are currently in test mode for our rollout of Bank AnoVa, which will greatly enhance the way we offer international remittance services. More to come in the near future.

In addition, we continue to participate in discussions and work groups relative to the Fintech industry and Faster Payments initiative. Management and the Board are committed to these efforts and have budgeted significant dollars for future products and services.

Our Board approved an increase in our stock issuance price effective August 1, 2018. The issuance price was raised by $500 per share to $5,000 per share with a minimum 20 share requirement to participate in all of the services ACBB offers. I would like to thank those banks who purchased additional shares to the 20 share level. I would also like to welcome 9 new shareholders who joined the ACBB family thus far in 2018.

The following is a financial recap of the first six months:

Net income at the bank level for the first six months of $3.51MM included merger related expenses of $130 thousand. Total merger related expenses, inclusive of expenses at the Holding Company were $163 thousand as of 6/30/18. We typically budget for a .6% ROAA which provides us a sufficient bank rating while allowing us to invest on initiatives for our and your future banking needs.

Assets at 6/30 of $702.1MM were apprised of:

Total Loans - $309.7MM or 91.3% of which are commercial loan participations. Contact Peter Garland This email address is being protected from spambots. You need JavaScript enabled to view it. or Bill Sayre This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.

Total Investment Securities - $128.5MM, 77.5% of which are MBS

Total Short Term - $231.1MM      Major Components

$  42.1MM Cash and & Due from Banks

$126.3MM FRB Deposits (We keep these deposits at the Fed)

$ 33.3MM Other Interest Earning Deposits

$ 31.3MM Federal Funds Sold (Overnight borrowing to our Shareholders)

Total Liabilities at 6/30/18 of $602.9MM were comprised of the following:

Demand Deposits                $288.1MM (Your DDAs with us)

Escrow Deposits                  $ 15.2MM (Institutions raising capital)

Certificates of Deposits      $106.0MM (Non Brokered CDs)

FHLB Borrowings                  $ 87.6MM

Fed Funds Purchased          $ 87.4MM (Overnight funds purchased from our respondent institutions)

Our Federal Funds business allows us to purchase federal funds, then lend them back in overnight Federal Funds sold to accommodate your overnight borrowing needs, which varies from day to day thus we maintain a healthy cushion. In addition, as of 6/30/18, we acted as agent for approximately $895 thousand in overnight investments. These funds were agented in the fed funds market as well as to the Federal Reserve in Excess Balance Accounts (EBAs).

Total Equity of $99.2MM at 6/30/18 yielded the following risked based capital ratios:

Tier 1 Leverage           -   13.20%

Tier 1 Risked Based   -   24.06%

Total Risked Based    -   25.26%

Please see our Financial Highlights for more information.