WEST TOWN BANK & TRUST AND SUBSIDIARY Cicero, Illinois. CONSOLIDATED FINANCIAL STATEMENTS December 31, 2015 and 2014

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1 Cicero, Illinois CONSOLIDATED FINANCIAL STATEMENTS

2 Cicero, Illinois CONSOLIDATED FINANCIAL STATEMENTS CONTENTS INDEPENDENT AUDITOR'S REPORT... 1 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS... 2 CONSOLIDATED STATEMENTS OF INCOME... 3 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME... 4 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY... 5 CONSOLIDATED STATEMENTS OF CASH FLOWS

3 Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITOR'S REPORT Board of Directors and Shareholders West Town Bank & Trust and Subsidiary Cicero, Illinois Report on the Financial Statements We have audited the accompanying consolidated financial statements of West Town Bank & Trust and Subsidiary, which comprise the consolidated balance sheets as of, and the related consolidated statements of income, comprehensive income, changes in shareholders equity, and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of West Town Bank & Trust and Subsidiary as of, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Oak Brook, Illinois April 14, 2016 Crowe Horwath LLP 1.

4 CONSOLIDATED BALANCE SHEETS ASSETS Cash and due from banks $ 4,513,711 $ 5,006,796 Interest-bearing deposits with other institutions 7,831,929 2,007,644 Total cash and cash equivalents 12,345,640 7,014,440 Securities available for sale, at fair value 6,370,989 5,689,307 Loans receivable, net of allowance of $1,834,465 and $1,600,000 as of, respectively 162,217, ,931,343 Loans held for sale 14,194,173 28,718,186 Federal Home Loan Bank stock 1,565,272 1,565,272 Property and equipment, net 6,092,130 6,205,430 Bank owned life insurance 4,509,406 4,362,013 Accrued interest receivable and other assets 7,733,011 6,806,018 Total assets $ 215,028,544 $ 184,292,009 LIABILITIES Deposits Noninterest-bearing demand $ 15,659,432 $ 6,216,276 Interest-bearing demand 5,019,934 3,516,777 Money market accounts 21,251,079 19,563,548 Savings 11,192,109 10,349,079 Time deposits 124,814, ,761,432 Total deposits 177,936, ,407,112 Federal Home Loan Bank advances 8,900,000 19,000,000 Accrued interest payable and other liabilities 4,045,106 3,783,453 Total liabilities 190,881, ,190,565 SHAREHOLDERS EQUITY Common stock, $1.00 par value; 4,000,000 shares authorized, 1,364,948 shares issued and outstanding, December 31, 2015, 1,314,347 shares issued and outstanding, December 31, ,364,948 1,314,347 Additional paid-in capital 8,970,213 8,552,947 Retained earnings 13,755,863 10,150,257 Accumulated other comprehensive income 55,799 83,893 Total shareholders equity 24,146,823 20,101,444 Total liabilities and shareholders equity $ 215,028,544 $ 184,292,009 See accompanying notes to consolidated financial statements. 2.

5 CONSOLIDATED STATEMENTS OF INCOME For the years ended Interest income Loans, including fees $ 8,842,888 $ 7,484,294 Interest-bearing deposits with other financial institutions 18,221 5,007 Securities 123, ,817 8,984,679 7,661,118 Interest expense Deposits 1,980,655 1,411,191 Borrowings 17,999 18,028 1,998,654 1,459,219 Net interest income 6,986,025 6,201,899 Provision for loan losses 481, ,736 Net interest income after provision for loan losses 6,504,941 5,331,163 Non-interest income Mortgage banking income, net 13,447,685 12,599,397 Gain on sale of loans 4,756,359 3,267,239 Gain (loss) on sale of securities, net - 32,393 Fees and service charges on deposit accounts 108,968 85,754 Other 3,156,901 3,926,021 21,469,913 19,910,804 Non-interest expense Salaries and employee benefits 15,789,626 13,267,225 Occupancy and equipment expense 1,551,334 1,274,428 Professional fees 601, ,167 Data processing 867, ,174 Advertising expense 1,032, ,676 FDIC deposit insurance premium 90, ,251 Other real estate owned impairment and expenses 10, ,887 Other expenses 1,574,555 1,502,253 21,517,788 18,669,061 Income before taxes 6,457,066 6,572,906 Income tax expense 2,455,844 2,546,731 Net income $ 4,001,222 $ 4,026,175 See accompanying notes to consolidated financial statements. 3.

6 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended Net income $ 4,001,222 $ 4,026,175 Other comprehensive income (loss): Unrealized gains/losses on securities: Unrealized holding gain (loss) arising during the year (45,681) 84,441 Reclassification adjustment for gains included in net income - (32,393) Tax effect 17,587 (20,003) Total other comprehensive income (loss) (28,094) 32,045 Comprehensive income $ 3,973,128 $ 4,058,220 See accompanying notes to consolidated financial statements. 4.

7 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY For the years ended Accumulated Total Additional Other Share- Common Paid-in Retained Comprehensive holders Stock Capital Earnings Income/(Loss) Equity Balance at January 1, 2014 $ 1,329,177 $ 8,609,781 $ 6,124,082 $ 51,848 $ 16,114,888 Net income - - 4,026,175-4,026,175 Other comprehensive income ,045 32,045 Retirement of ESOP plan (14,830) (118,181) - - (133,011) Stock-based compensation - 61, ,347 Balance at December 31, ,314,347 8,552,947 10,150,257 83,893 20,101,444 Net income - - 4,001,222-4,001,222 Other comprehensive loss (28,094) (28,094) Dividend paid - - (395,616) - (395,616) Stock options exercised 27, , ,688 Warrants exercised at $ , , ,576 Other (3,655) 3, Stock-based compensation - 23, ,603 Balance at December 31, 2015 $ 1,364,948 $ 8,970,213 $ 13,755,863 $ 55,799 $ 24,146,823 See accompanying notes to consolidated financial statements. 5.

8 CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended Cash flows from operating activities Net income $ 4,001,222 $ 4,026,175 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization of property and equipment 429, ,715 Provision for loan losses 481, ,736 Gain on sale of securities - (32,393) Loss (gain) on sale of other real estate owned (1,513) 95,329 Impairment of other real estate owned 110,216 - Security premium discount amortization 68, ,459 Gain on sale of loans (4,756,359) (3,267,239) Gain on sale of mortgage loans (3,486,989) (3,530,076) Origination of mortgage loans held for sale, net of repayments (335,726,844) (283,332,736) Proceeds from sales of loans held for sale 358,494, ,331,916 Stock-based compensation 23,603 61,347 Earnings on bank owned life insurance (147,393) (35,861) Change in accrued interest receivable and other assets (657,394) (3,924,491) Change in accrued interest payable and other liabilities 261,653 1,023,997 Net cash from operating activities 19,093,026 (15,242,122) Cash flows from investing activities Available for sale securities: Purchases (4,101,459) (3,228,597) Sales - 4,074,772 Maturities, prepayments and calls 3,323,038 3,178,285 Loan originations and payments, net (39,266,349) (12,201,547) Proceeds from sale of other real estate owned 120, ,063 Purchase of bank owned life insurance - (4,000,000) Purchase of property and equipment (316,686) (3,701,883) Proceeds from sale of investments in real estate - 121,291 Net cash from investing activities (40,241,073) (14,886,616) Cash flows from financing activities Net increase in deposits 36,529,503 26,104,937 Proceeds from FHLB advances 3,004,300,000 3,257,450,000 Repayments on FHLB advances (3,014,400,000) (3,254,850,000) Proceeds from retirement of ESOP plan - (133,011) Payment of cash dividend (395,616) - Proceeds from exercise of stock options and warrants 444,264 - Net cash from financing activities 26,479,247 28,571,926 Net change in cash and cash equivalents 5,331,200 (1,556,812) Cash and cash equivalents at beginning of period 7,014,440 8,571,252 Cash and cash equivalents at end of period $ 12,345,640 $ 7,014,440 Supplemental disclosures of cash flow information Cash paid during the period for interest $ 1,990,713 $ 1,464,898 Cash paid during the period for taxes 1,613,500 2,408,150 Loans transferred to other real estate owned 498, ,392 See accompanying notes to consolidated financial statements. 6.

9 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Principles of Consolidation: The consolidated financial statements include West Town Bank & Trust and its wholly owned subsidiary, West Town Insurance Agency, Inc. (together referred to as the Bank ). Intercompany balances and transactions are eliminated in consolidation. The Bank provides banking services through its offices in Illinois and North Carolina and also maintains loan production offices in North Carolina, Maryland, Pennsylvania and New Jersey. Its primary deposit products are checking, savings, and time certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Additionally, the Bank engages in mortgage banking activities and, as such, originates and sells one-tofour family residential mortgage loans in multiple states. There are no significant concentrations of loans to any one industry or customer. However, the customers ability to repay their loans is dependent on the real estate and general economic conditions in the area. Subsequent Events: The Bank has evaluated subsequent events for recognition and disclosure through April 14, 2016, which is the date the financial statements were available to be issued. Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Cash Flows: Cash and cash equivalents include cash, deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions. Securities: Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment ( OTTI ) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. 7.

10 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Loans Held for Sale: Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Loans held for sale are generally sold with servicing rights released. For loans held for sale that are sold with servicing rights retained, the carrying value of loans sold is reduced by the amount allocated to the servicing right. Gains and losses on sales of loans are based on the difference between the selling price and the carrying value of the related loan sold. Servicing rights and valuation are included in other assets. Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer loans are typically charged off no later than 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to non-accrual status in accordance with the Bank s policy, typically after 90 days of non-payment. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. 8.

11 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Commercial and commercial real estate loans, as well as loans in excess of an established minimum threshold, are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Bank determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The general component covers loans that are collectively evaluated for impairment. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not included in the separately identified impairment disclosures. The general allowance component also includes loans that are not individually identified for impairment evaluation, such as commercial loans below the individual evaluation threshold, as well as those loans that are individually evaluated but are not considered impaired. The general component is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Bank. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans (including troubled debt restructurings); levels of and trends in chargeoffs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; industry conditions; and effects of changes in credit concentration. The following portfolio segments have been identified: commercial, real estate and consumer. The following provides a summary of the risks associated with the various segments of the Bank s loan portfolio, which are factors management regularly considers when evaluating the adequacy of the allowance: Commercial loans are dependent on the strength of the industries of the related borrowers and the success of their businesses. Commercial loans are advanced for equipment purchases or to provide working capital to meet other financing needs of the business. These loans may be secured by accounts receivable, inventory, equipment or other business assets. Financial information is obtained from the borrower to evaluate the debt service coverage and ability to repay the loans. 9.

12 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Commercial real estate loans are dependent on the industries tied to these loans as well as the local commercial real estate market, including available commercial real estate inventories, market demand and time to sell. The loans are secured by the real estate, and appraisals are obtained to support the loan amount. An evaluation of the entities cash flows is performed to evaluate the borrower s ability repay the loan. Residential real estate and home equity loans are affected by the local residential real estate market, the local economy, and movement in interest rates. The Bank evaluates the borrower s repayment ability through a review of credit scores and debt to income ratios. Appraisals are obtained to support the loan amount. Consumer loans are dependent on the local economy. Consumer loans are generally secured by consumer assets, but may be unsecured. The Bank evaluates the borrower s repayment ability through a review of credit scores and an evaluation of debt to income ratios. Servicing Rights: When loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Bank measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with other income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. Servicing fee income, which is reported on the income statement as other income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan and are recorded as income when earned. Servicing fees totals $72,701 and $238,920 for the years ended, respectively. Late fees and ancillary fees related to loan servicing are not material. Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Bank, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Property and Equipment: Land is carried at cost. Property and equipment are stated at cost less accumulated depreciation. Buildings and related components along with furniture, fixtures and equipment are depreciated using the straight-line method. Foreclosed Assets: Foreclosed assets are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrow conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. As of, foreclosed assets were $269,599 and $0, respectively. 10.

13 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Federal Home Loan Bank (FHLB) Stock: The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Bank-Owned Life Insurance: The Bank has purchased life insurance policies on certain current and former key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Loan Commitments and Related Financial Instruments: Financial instruments include off-balance-sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Mortgage Banking Derivatives: Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. The Bank enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on sales of loans. Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black- Scholes model is utilized to estimate the fair value of stock options, while the market price of the Bank s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Bank recognizes interest and/or penalties related to income tax matters in income tax expense. Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, which are also recognized as separate components of equity. 11.

14 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements. Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to shareholders. Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders equity. NOTE 2 - SECURITIES AVAILABLE FOR SALE The amortized cost, unrealized gains and losses, and fair value of securities available for sale at were as follows. Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value 2015 Collateralized mortgage obligations agency residential $ 2,101,338 $ 1,670 $ (1,559) $ 2,101,449 Collateralized mortgage obligations non-agency residential 117,029 28,837 (125) 145,741 Mortgage-backed agency residential 4,063,952 74,110 (14,263) 4,123,799 Total $ 6,282,319 $ 104,617 $ (15,947) $ 6,370, U.S. government-sponsored enterprises $ 1,000,000 $ - $ (3,940) $ 996,060 Collateralized mortgage obligations agency residential 798,902 5, ,632 Collateralized mortgage obligations non-agency residential 136,094 32, ,290 Mortgage-backed agency residential 3,637,547 82,778-3,720,325 Total $ 5,572,543 $ 120,704 $ (3,940) $ 5,689,

15 NOTE 2 - SECURITIES AVAILABLE FOR SALE In 2015, the Bank did not sell any securities. In 2014, the Bank sold $4,074,772 of securities, which resulted in gross gains of $35,141 and gross losses of $2,748. Contractual maturities of debt securities at year-end 2015 were as follows. Securities not due at a single maturity date, primarily collateralized mortgage obligations, and mortgage-backed securities are shown separately. Amortized Cost Fair Value Collateralized mortgage obligations and mortgage-backed securities $ 6,282,319 $ 6,370,989 $ 6,282,319 $ 6,370,989 Securities pledged at year end 2015 and 2014 had a carrying amount of $670,574 and $996,060 and were pledged to secure public deposits. At year end 2015 and 2014, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders equity. The following table summarizes securities with unrealized losses at, aggregated by major security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses December 31, 2015 Available for sale Collateralized mortgage obligations agency residential $ 1,902,462 $ (1,559) $ - $ - $ 1,902,462 $ (1,559) Collateralized mortgage obligations non-agency residential 3,631 (125) - - 3,631 (125) Mortgage-backed agency residential 1,073,141 (14,263) - - 1,073,141 (14,263) Total available for sale $ 2,979,234 $ (15,947) $ - $ - $ 2,979,234 $ (15,947) December 31, 2014 Available for sale U.S. government-sponsored enterprises $ 996,060 $ (3,940) $ - $ - $ 996,060 $ (3,940) Total available for sale $ 996,060 $ (3,940) $ - $ - $ 996,060 $ (3,940) Unrealized losses on securities have not been recognized into income because management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the securities approach maturity. 13.

16 NOTE 3 - LOANS Loans at were as follows: Commercial $ 31,649,654 $ 17,039,817 Real Estate: Commercial real estate 78,385,562 61,983,384 Residential real estate 51,520,204 44,390,618 Consumer 1,483,044 1,328, ,038, ,742,483 Net deferred loan costs 1,013, ,860 Allowance for loan losses (1,834,465) (1,600,000) Loans, net $ 162,217,923 $ 123,931,343 Included above, the Bank has net SBA loans totaling $55,500,305 and $32,641,374 and USDA loans totaling $11,415,863 and $14,300,104 at year-end 2015 and 2014, respectively. The Bank has granted loans to executive officers, directors and their related business interests. These loans totaled $1,034,373 and $712,163 at. The following table presents the activity in the allowance for loan losses by class of loans for the years ended : Commercial Residential Real Real Commercial Estate Estate Consumer Total 2015 Allowance for loan losses: Beginning balance $ 24,226 $ 1,021,998 $ 547,292 $ 6,484 $ 1,600,000 Provision for loan losses 12, ,110 (143) (4,313) 481,084 Loans charged off - - (250,413) - (250,413) Recoveries - - 3,794-3,794 Ending balance $ 36,656 $ 1,495,108 $ 300,530 $ 2,171 $ 1,834, Allowance for loan losses: Beginning balance $ 30,709 $ 489,173 $ 582,480 $ 4,638 $ 1,107,000 Provision for loan losses (6,483) 532, ,500 4, ,736 Loans charged off - - (380,610) (3,048) (383,658) Recoveries - - 5,922-5,922 Ending balance $ 24,226 $ 1,021,998 $ 547,292 $ 6,484 $ 1,600,

17 NOTE 3 - LOANS The following table presents the balance in the allowance for loan losses and the recorded investment in loans by class of loans based on impairment method as of : Commercial Residential Real Real Commercial Estate Estate Consumer Total 2015 Allowance for loan losses balance: Individually evaluated for impairment $ - $ 3,271 $ 19,156 $ - $ 22,427 Collectively evaluated for impairment 36,656 1,491, ,374 2,171 1,812,038 Total ending allowance balance $ 36,656 $ 1,495,108 $ 300,530 $ 2,171 $ 1,834,465 Loans: Loans individually evaluated for impairment $ - $ 2,170,843 $ 3,159,147 $ 1,963 $ 5,331,953 Loans collectively evaluated for impairment 31,649,654 76,214,719 48,361,057 1,481, ,706,511 Total ending loans balance $ 31,649,654 $ 78,385,562 $ 51,520,204 $ 1,483,044 $163,038, Allowance for loan losses balance: Individually evaluated for impairment $ - $ 38,705 $ 249,187 $ - $ 287,892 Collectively evaluated for impairment 24, , ,105 6,484 1,312,108 Total ending allowance balance $ 24,226 $ 1,021,998 $ 547,292 $ 6,484 $ 1,600,000 Loans: Loans individually evaluated for impairment $ - $ 5,443,410 $ 3,784,397 $ - $ 9,227,807 Loans collectively evaluated for impairment 17,039,817 56,539,974 40,606,221 1,328, ,514,676 Total ending loans balance $ 17,039,817 $ 61,983,384 $ 44,390,618 $ 1,328,664 $124,742,

18 NOTE 3 - LOANS The following table presents information related to impaired loans by class of loans as of and for the years ended : Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized 2015 With no related allowance recorded: Commercial real estate $ 1,568,698 $ 1,568,698 $ - $ 2,578,507 $ 119,921 $ 119,921 Residential real estate 3,053,963 2,853,479-2,914, , ,902 Consumer 1,963 1,963-2, ,624,624 4,424,140-5,495, , ,122 With an allowance recorded: Commercial real estate 602, ,145 3, ,145 36,918 36,918 Residential real estate 385, ,668 19, , , ,813 22, ,732 36,918 36,918 Total $ 5,612,472 $ 5,331,953 $ 22,427 $ 6,414,745 $ 314,040 $ 314, With no related allowance recorded: Commercial real estate $ 4,508,821 $ 4,508,821 $ - $ 84,511,529 $ 173,407 $ 173,407 Residential real estate 2,145,846 2,145,846-2,172, , ,489 6,654,667 6,654,667-3,821, , ,896 With an allowance recorded: Commercial real estate 934, ,589 38, ,658 44,474 44,474 Residential real estate 1,638,551 1,638, ,187 1,649,022 98,534 98,534 2,573,140 2,573, ,892 6,684, , ,008 Total $ 9,227,807 $ 9,227,807 $ 287,892 $ 9,320,107 $ 416,904 $ 416,904 The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some may only be included in one category. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of : Loans Past Due Over 90 Days Nonaccrual Still Accruing 2015 Residential real estate $ 2,105,561 $ - Consumer 1,963 - Total $ 2,107,524 $ Commercial real estate $ 917,783 $ - Residential real estate 2,398,405 - Total $ 3,316,188 $ - 16.

19 NOTE 3 - LOANS The following table presents the aging of the recorded investment in past due loans by class of loans as of : Greater Than Days Days 89 Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total 2015 Commercial $ - $ - $ - $ - $ 31,649,654 $ 31,649,654 Commercial real estate 1,002, ,002,997 77,382,565 78,385,562 Residential real estate 1,379,833 58, ,420 2,073,132 49,447,072 51,520,204 Consumer ,483,044 1,483,044 Total $ 2,382,830 $ 58,879 $ 634,420 $ 3,076,129 $ 159,962,335 $ 163,038, Commercial $ 200,000 $ - $ - $ 200,000 $ 16,839,817 $ 17,039,817 Commercial real estate 5, , ,783 61,060,601 61,983,384 Residential real estate 443, , ,979 1,783,442 42,607,176 44,390,618 Consumer 3,937 2,792-6,729 1,321,935 1,328,664 Total $ 652,589 $ 390,603 $ 1,869,762 $ 2,912,954 $ 121,829,529 $ 124,742,483 Troubled Debt Restructurings: The Bank has allocated $3,271 and $198,023 in the allowance for loan losses for customers whose loan terms have been modified in troubled debt restructurings as of. The $2,009,549 and $2,945,392 of troubled debt restructurings at are included in impaired loans above. The Bank has not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings as of. During the year ending 2015, there were no loans modified as troubled debt restructurings. During the year ending 2014, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a deferral of payments on the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2014: Pre-Modification Post-Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment 2014 Commercial real estate 1 $ 780,460 $ 780,460 Residential real estate 1 94,897 94,897 Total 2 $ 875,357 $ 875,357 The troubled debt restructurings described above had no material impact on the allowance for loan losses and resulted in no charge-offs during A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. 17.

20 NOTE 3 - LOANS There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months in The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the year ended December 31, 2014: 2014 Number Recorded of Loans Investment Troubled Debt Restructurings That Subsequently Defaulted: Residential real estate 1 $ 750,016 Total 1 $ 750,016 The troubled debt restructuring that subsequently defaulted described above did not increase the allowance for loan losses and resulted in no charge-offs during the year ended December 31, Credit Quality Indicators: The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis includes nonhomogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a quarterly basis. The risk category of homogeneous loans is evaluated at origination and when a loan becomes delinquent. The Bank uses the following definitions for risk ratings: Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a welldefined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Pass Substandard Doubtful Total December 31, 2015 Commercial $ 31,649,654 $ - $ - $ 31,649,654 Commercial real estate 77,668, ,980-78,385,562 Residential real estate 49,586,768 1,933,436-51,520,204 Consumer 1,481,081 1,963-1,483,044 Total $ 160,386,085 $ 2,652,379 $ - $ 163,038,

21 NOTE 3 - LOANS Pass Substandard Doubtful Total December 31, 2014 Commercial $ 17,039,817 $ - $ - $ 17,039,817 Commercial real estate 59,478,947 2,504,437-61,983,384 Residential real estate 41,623,743 2,766,875-44,390,618 Consumer 1,328, ,328,664 Total $ 119,471,171 $ 5,271,312 $ - $ 124,742,483 NOTE 4 - LOAN SERVICING Loan servicing rights are included in other assets on the consolidated balance sheet. Activity for loan servicing rights follows for 2015: Loan servicing rights Beginning of year $ 3,173,328 Additions 1,811,967 Disposals (1,643,379) Other changes in fair value 933,835 End of year $ 4,275,751 Fair value at year-end 2015 was determined using discount rates ranging from 10.0% to 12.0%, prepayment speeds ranging from 4.5% to 12.0%, depending on the stratification of the specific right, and a weighted average default rate of 1.75%. NOTE 5 - PROPERTY AND EQUIPMENT Year-end property and equipment were as follows: Land $ 900,507 $ 900,507 Buildings 5,185,028 5,001,338 Furniture, fixtures and equipment 1,363,366 1,524,985 7,448,901 7,426,830 Accumulated depreciation and amortization (1,356,771) (1,221,400) Property and equipment, net $ 6,092,130 $ 6,205,430 Depreciation and amortization expense was $429,986 and $360,715 for 2015 and

22 NOTE 5 - PROPERTY AND EQUIPMENT Operating Leases: The Bank leases certain branch properties and equipment under operating leases. In addition, the Bank rents loan production offices on a month-to-month basis. Rent expense was $396,669 and $459,382 for 2015 and Rent commitments, excluding loan production offices rented on a month-to-month basis, were as follows: 2016 $ 282, , , , ,529 Thereafter 259,045 Total $ 1,418,233 NOTE 6 - DEPOSITS Time deposits that meet or exceed the FDIC insurance limit of $250,000 at year-end 2015 and 2014 were $28,283,044 and $9,683,367. At December 31, 2015, scheduled maturities of time deposits were as follows: 2016 $ 65,630, ,014, ,377, ,642, ,887,905 Thereafter 262,101 $ 124,814,061 At, deposits from officers and directors of the Bank totaled $410,009 and $642,870. At December 31, 2015, total brokered deposits was $5,660,000. NOTE 7 - FEDERAL HOME LOAN BANK ADVANCES At December 31, advances from the Federal Home Loan Bank were as follows: Maturing in January 2016, at fixed rate of 0.16% $ 8,900,000 $ - Matured in January 2015, at fixed rate of 0.13% - 19,000,000 $ 8,900,000 $ 19,000,000 All advances matured in January 2016 and were renewed upon maturity. Each advance is payable at its maturity date, with a prepayment penalty. The advances were collateralized by $137,878,791 and $89,143,348 of loans under a blanket lien arrangement at. The remaining qualifying mortgage loan collateral is approximately $57,725,000 and $30,422,000 at December 31, 2015 and 2014, respectively. 20.

23 NOTE 8 - INCOME TAXES Income tax expense consists of the following: Current tax expense $ 2,689,546 $ 1,822,641 Deferred tax expense (233,702) 724,090 $ 2,455,844 $ 2,546,731 Effective tax rates differ from the federal statutory rate of 34% applied to income before income taxes due primarily to non-deductible expenses, stock-based compensation, and increases in the cash surrender value of life insurance. Deferred taxes include the following gross amounts of deferred tax assets and liabilities at December 31, 2015 and 2014: Deferred tax assets $ 1,470,091 $ 1,016,522 Deferred tax liabilities (2,254,642) (2,051,685) Net deferred tax liability $ (784,551) $ (1,035,163) Temporary differences between the amounts reported in the consolidated financial statements and the tax basis of assets and liabilities result in deferred taxes. Temporary differences resulting in deferred tax assets arise primarily from the allowance for loan losses, mark-to-market on held for sale loans, deferred compensation, and impairment losses on securities available for sale. Deferred tax liabilities arise primarily from depreciation on fixed assets, originated loan servicing rights, prepaid expenses, deferred loan costs, and net unrealized gains on securities available for sale. The Bank does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Bank is subject to U.S. federal income tax and income tax of the state of Illinois, as well as various other states in which the Bank operates. The Bank is no longer subject to examination by taxing authorities for years before NOTE 9 - COMMITMENTS AND CONTINGENCIES Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. The contractual amounts of financial instruments with off-balance-sheet risk at year end were as follows: Commitments to make loans $ 21,031,753 $ 15,996,330 Unused lines of credit 14,123,515 7,614,

24 NOTE 10 - REGULATORY MATTERS The Bank is subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate certain regulatory action that could have a direct material effect on the financial statements. The final rules implementing Basel Committee on Banking Supervision s capital guidelines for U.S banks (Basel III rules) became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Capital amounts and ratios for December 31, 2014 are calculated using Basel I rules. Management believes the Bank met all capital adequacy requirements to which it was subject at December 31, The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. At actual capital levels and minimum required levels under the regulatory framework for prompt correction action regulations for the Bank were as follows. Minimum Required Minimum Required to be Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Regulations Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) 2015 Total capital (to risk-weighted assets) $ 25, % $ 14, % $ 17, % Tier 1 (core) capital (to risk-weighted assets) 23, , , Common Tier 1 (CETI ratio) 23, , , Tier 1 (core) capital (to average assets) 23, , , Total capital (to risk-weighted assets) $ 21, % $ 11, % $ 14, % Tier 1 (core) capital (to risk-weighted assets) 19, , , Tier 1 (core) capital (to average assets) 19, , ,