2017 ANNUAL REPORT. S.B.C.P. Bancorp, Inc. Celebrating 110 Years

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1 2017 ANNUAL REPORT S.B.C.P. Bancorp, Inc. Celebrating 110 Years

2 VISION STATEMENT We Partner with our Customers to help them achieve all their Financial Dreams I like face to face interaction. I like going in and making a deposit with a teller. Talking to that person, asking how they are doing. That s something I can t get from a National Bank. Kevin Abercrombie, Lone Girl Brewing

3 DEAR SHAREHOLDERS, INVESTORS AND FRIENDS I am pleased to share with you that 2017 was another very good year for our bank. We experienced tremendous improvement in almost every aspect: January 20, 2018, our bank turned 110 years old! As our corporate records reflect, in 1907 James G. Bailey came to Cross Plains from Ft. Atkinson with the purpose and mission to start a bank. JIM L. TUBBS Total assets for the bank are now in excess of $930 million and when you include the $525 million in wealth management assets and the $300 million in serviced residential mortgages, our bank is an institution of $1.755 billion. In July 2017, loan balances grew by almost $80 million dollars which in turn increased interest income by 18%. We were successful in funding the majority of our loan growth through continued solid deposit growth from our customers. We worked hard with noninterest expense containment and are pleased with maintaining only a 3% increase from the prior year. Last but not least, we were thrilled to have further positive resolution with the legacy problem loans that we have been dealing with. With this continual improvement, our book value per share continues to improve. As you can see from the chart below, the book value has increased by over 42% in the last four years. The bank started on January 20, 1908 with 52 shareholders who raised $15,000 in capital. The original board of directors were: Zander, Saeman, Ripp, Birrenkott, Froggett, Kading, Schwab, Kerl and Bailey. We owe a tremendous amount of gratitude for all of those that came before us. I certainly hope they would be shocked, amazed and proud with what their original investment has become. We are planning many ways to honor the bank s anniversary over the course of this year. We are enhancing our commitment to the communities we serve, improving customer experience, and strengthening internal communications to keep our employees engaged and involved. These are just a few examples of how we are preparing our bank for continued long-term success. During the last 110 years, our bank has experienced and adjusted to changes very well. The differences in the world we live in now is the accelerated pace of change which we now experience. I am very pleased to inform you that our bank team is well prepared to continue to achieve in this environment. Even though we are now 110 years old and have experienced change, the core to our success is still the same: achieve a full banking relationship with our customers and make sure they have a great customer experience! Thank you again for your loyalty and your support! Sincerely, STATE BANK OF CROSS PLAINS President and Chief Executive Officer, State Bank of Cross Plains With the books closed for 2017, it s time to celebrate and recognize the tremendous milestone our bank has achieved. On Jim L. Tubbs President and Chief Executive Officer

4 GIVING BACK State Bank of Cross Plains focuses its corporate giving through organizations which support: Community and economic development Affordable housing and economic revitalizations Education Health and human services CORPORATE GIVING OVERVIEW The State Bank of Cross Plains is proud of our record of involvement with the people and communities we serve. We recognize our civic responsibility and take pride in our efforts to support the communities that help us grow. Our corporate giving is directed towards local entities and non-profit organizations that provide needed services to those communities. State Bank of Cross Plains priority is to support programs and provide resources for: community and economic development, education, health and human services, and community arts. We also support and encourage the service of our employees, who give their time and talent to these worthy causes. In 2017, corporate giving was allocated as follows: Affordable housing and economic revitalizations 2% Community Arts 10% Community Arts Health and Human Services 11% Education 26% Community and economic development 51%

5 During April s Community Banking Month, the Bank promoted contributions for local food pantries. Almost 2,000 non-perishable food items and more than $500 in donations were collected from customers. In addition, State Bank of Cross Plains donated more than $15,000 to local food pantries during the year our largest area of giving. At the conclusion of Community Banking Month, one donating customer from each office was invited to participate in a Supermarket Sweep event (you may recall the game show from days past). Participants were given two minutes to fill their cart at a community grocer with up to $500 in goods for their local food pantry, and they earned themselves a $50 gift card in the process. The event was a great deal of fun for participants and spectators, and the local NBC affiliate broadcast a morning remote during the event in Verona. Last years Community Banking Month event was so successful that we are continuing the event again in Our efforts will make a big difference for them and the families they help... the demand for food has gone up 30% over last year and they re seeing more and more single parents in need Jody Greiber with the help of Waunakee Food Pantry volunteers were able to collect over $600 in non-perishable items during a SBCP-Waunakee grocery sweep on May 4. The sweep was one of four in Dane County to benefit eight local pantries. SBCP offices raised 2000 items and $500 in donations for the sweep. Dick Royston, Director of Mazomanie Food Pantry

6 OUR MISSION The ongoing mission of the Wealth Management Division is to provide first-rate investment management, trustee, planning, and other fiduciary services to individuals, families, businesses, and other organizations throughout Greater Madison. We succeed at this by: Constantly upgrading knowledge and skills Maintaining staff continuity Remaining flexible and innovative Retaining key functions in-house WEALTH MANAGEMENT AND FINANCIAL ADVISORY % Increase Revenue (consolidated) $2,550,895 $2,229, % Assets Under Mgmt (consolidated) $525,113,852 $438,900, % MAJOR 2017 HIGHLIGHTS 1. Substantially exceeded asset and income growth (illustrated above) goals of 15% and 12% respectively. 2. Assets under management and income again attained record levels in both divisions (Wealth Management and Financial Advisory). 3. Profitability increased by 33.8% over Strengthened and expanded our Wealth Management and Financial Advisory teams and their respective capabilities via significant investments in education and hiring. 5. Continued successful efforts to grow our most profitable service lines. 6. Further enhanced service delivery by leveraging our financial planning capabilities and dedicated Professional Financial Planning team. Being accessible to our valued customers

7 Service Line 2017 Market Value 2016 Market Value % Increase Trusts and Estates $113,410,400 $95,277, % Managed IRAs $57,054,290 $47,832, % Employee Benefit Plans $60,950,471 $46,033, % Investment Management Accounts $73,251,038 $57,794, % DAN SAVAGE 2018 GROWTH DRIVERS/MAJOR INITIATIVES 1. Record asset levels in Wealth Management and Financial Advisory create a solid foundation for achieving record income and profitability levels in 2018 and beyond. 2. Capitalize on the growing retirement wave of Baby Boomers and Rollover Opportunities. 3. Continue to strengthen and leverage our financial planning capabilities. 4. Further solidify our role as a trustee of choice within Dane County s trust and estate planning legal community. 5. Continue to heavily invest in staff education and certification (deep expertise). Senior Vice President and Senior Trust Officer 2017 was another outstanding year for our Wealth Management and Financial Advisory Divisions. We look forward to the challenges and opportunities before us in As a shareholder, we invite you to take advantage of our investment management, trustee, planning, and other capabilities.

8 OUR MISSION To develop relationships with our customers that support them and prepare them for whatever life may bring personally and financially. Our goal is to do this by providing financial products and services, travel, and educational opportunities to enhance their lives. PRIME TIME PLUS CLUB Our Prime Time Plus Club continues to focus on building relationships with customers to support them wherever life leads them. Members tell us the greatest benefits are the friendships they make along the way. Whether reconnecting with old friends they haven t seen in many years, or making new ones, this is a highlight of our club membership. Each year we offer a variety of events to meet the many interests of club members. In 2017 we hosted 7 seminars with almost 250 attendees on topics from Fraud to Alzheimer s to Healthcare Insurance Planning. Our goal is have members look to us as a great resource for knowledge and services. We also strive to offer unique, all-inclusive travel experiences. This year we celebrated Valentine s Day with a beautiful white-linen dinner under the stars, spent an evening in a 5-star tented camp in Kenya, journeyed to the Big Apple in September, ventured to Minneapolis for a 5-day mystery tour and ended up on a yacht in Los Angeles to bring in the New Year! 2018 TRAVEL & SOCIAL HIGHLIGHTS May Washington DC: Your Passport to the World! June Hamilton! in Chicago July / August Journey to the North Cape featuring Norway August Member Appreciation Concert featuring Branson on the Road

9 ATTENDANCE Five extended tours with 239 members Six day trips for 514 members (including a trip to see Hamilton in Chicago) Seven seminars hosting 248 members Member Appreciation Event entertaining more than 900 guests Total event attendance for 2017 of 2,262 members Our club encompasses 3,662 households and 6,187 members Prime Time Plus member balances comprise 38% of Bank s total deposits LOIS BOEHNEN If you aren t a Prime Time Plus Club member yet, please ask any one of our staff members how to join us! It s our bank s way of saying thank you for your business! Relationship Banking Officer Prime Time Plus Club 2018 LEARNING HIGHLIGHTS February - Financial Partners Presentation March and June - Long-term Care 1.0 and 2.0 April - Special Needs Trust Presentation

10 BOARD OF DIRECTORS Back row (left to right): Stephen B. Grundahl, Vernon W. Wendt, Daniel F. Kuehn, William H. Saeman, Catherine J. Durham, Daniel N. Rashke, Vernon J. Jesse, OUR MISSION The State Bank of Cross Plains shall ethically provide high quality financial and related services in order to fulfill community and customer needs, while producing superior long-term financial results for shareholders and rewarding employment for associates. Front row (left to right): Jim L. Tubbs, Charles L. Saeman

11 DEAR SHAREHOLDERS, CUSTOMERS AND FRIENDS Jim Tubbs, our Bank President and CEO, has identified a list of significant accomplishments during the fiscal year It was indeed a very good year. Putting a spotlight on items mentioned in this report, the gains in earnings, dividend payout and book value per share (at $76.28) are particularly pleasing to all of us as Shareholders. The better news is that near-term prospects encourage us to anticipate even more revenue increases from solid asset growth and from advantages available from recent tax reform. In this anniversary year we will look back with pride on where we have come from, while intently focused on where we can go from here. It is amazing to think about how changed the bank is from 1908 when it was formed 110 years ago, even though key values have remained the same. In 1908, the expressed purpose of forming the bank was to promote commerce for the three unincorporated settlements which would become the incorporated Village of Cross Plains in That Mission of service remains the same but now the State Bank is in 8 communities (Cross Plains , Mt. Horeb , Middleton , Madison 2001, Waunakee , Verona and Oregon , and Black Earth ). We now have 9 full service branches and a Madison Loan Production office which opened early in From 52 shareholders in 1908 we now have over 600. Those first investors raised $15,000 in capital and again in the days of the Great Depression $15,000 was raised to recapitalize the Bank. Invested and retained capital now exceeds $73 million dollars. A good number of people have served the Bank over the last 110 years. Mr. James Bailey was the primary employee that first year when the first loan registered was only $150. Today Bank employment at our various offices is very close to 200. And today it is not uncommon to have loan requests that exceeds $10 million. Reflecting on our current Asset size of $936 million, it is incredible to note that the bank had Assets of $105,000 by It is also interesting for me to recall that at the time I started working at the Bank in 1972, Assets were less than $9 million. Looking to the future, it will not be long before the bank exceeds $1 Billion in Bank Assets without counting Wealth Management and Serviced Residential Mortgages. Ongoing Strategic Planning and leadership at Board and Bank levels have ensured that we will be ready for that significant milestone having the right people, with the right skills and technological tools to meet the demands of an ever-changing world. With the past in the past, our gaze will be forward. We thank our Shareholders and Investors, as well as our clients and friends, for your support and we look forward to serving the commerce of our communities. Sincerely, Charles L. Saeman President and Chairman, SBCP Bancorp. Inc. Chairman State Bank of Cross Plains CHARLES L. SAEMAN Chairman of the Board, State Bank of Cross Plains; President of S.B.C.P. Bancorp, Inc.

12 S.B.C.P. BANCORP, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2017 and 2016 (in thousands) Assets Cash and due from banks...$ 20,981...$ 35,454 Federal Funds sold ,002 Total cash and cash equivalents... 20, ,456 Investment securities...141, ,135 Loans, net of allowance for loan losses...716, ,123 Premises and equipment, net of depreciation...15, ,231 Intangible assets...6, ,026 Other assets...36, ,358 Total assets...$ 936,660...$ 878,329 Liabilities and Stockholder s Equity Noninterest bearing...$ 158,875...$ 136,026 Interest bearing...652, ,758 Total deposits , ,784 Federal Funds purchased...2, Securities sold under repurchase agreements...4, ,426 Other borrowings...7, ,150 Subordinated debentures...31, ,720 Other liabilities...6, ,986 Total liabilities , ,066 Stockholder s equity: Common stock, $2 par value, 1,150,000 shares authorized, 963,365 shares outstanding...1, ,948 Paid in capital...14, ,283 Retained earnings...58, ,570 Accumulated other comprehensive income...(814)...(690) Treasury Stock, at cost: -10,492 shares...(848)...(848) Total stockholder s equity...73, ,263 Total liabilities and stockholder s equity...$ 936,660...$ 878,329 Certain reclassifications and adjustments may have been made to prior period results as appropriate.

13 S.B.C.P. BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Income For the Years Ended December 31, 2016 and 2015 (in thousands) Interest Income: Loans, including origination fees... $ 30,035...$ 24,527 Investment securities...3, ,601 Federal funds sold Total interest income...33, ,407 Interest Expense: Deposits...3, ,139 Other borrowings Subordinated debentures...1, ,393 Total interest expense , ,892 Net interest income...28, ,515 Provision for loan losses (2,350) Net interest income after provision for loan losses...$ 28,983...$ 26, Noninterest Income: Customer service fees...$ 1,510...$ 1,439 Mortgage banking income...1, ,156 Wealth management fees...2, ,230 Other income...2, ,278 Total noninterest income...8, ,103 Noninterest Expense: Salaries and benefits...14, ,164 Office occupancy and equipment...2, ,877 Data processing and office operations...2, ,259 Other expenses...5, ,127 Total noninterest expense...24, ,427 Income before income taxes...12, ,541 Provision for income taxes...4, ,595 Net income...$ 7,425...$ 6,946 Certain reclassifications and adjustments may have been made to prior period results as appropriate.

14 FINANCIAL HIGHLIGHTS S.B.C.P. BANCORP, INC. (IN THOUSANDS) CHANGE % CHG Average Loans...$698, $591,618...$107, % Average Deposits...$755, $681,226...$74, % Average Assets...$902, $817,943...$84, % Year End Assets...$936, $878,329...$58, % Off-Balance Sheet Assets Under Management or Serviced...$837, $756,761...$80, % Total Assets Supported... $1,774,246...$1,635, $139, % Net Income...$7, $6, $ % Return on Average Equity % % % % Return on Average Assets (Bank-only) % % % % Stockholders Equity...$73, $67,263...$6, % Tier One Capital to Average Assets % % % % Total Capital to Risk-Weighted Assets % % % % Book Value per Share...$ $ $ % Earnings per Share...$ $ $ % Analysis of Loan Loss Reserve Balance January 1...$6, $8, ($2,602) % Recoveries...$314...$ $ % Charge-offs...($586)... ($398)...($188) % Provision for Loan Losses...$0...($2,350)...$2, % Balance December 31...$5,833...$6,105...($272) % Analysis of Retained Earnings Balance January 1...$52, $46,828...$5, % Net Income...$7, $6, $ % Change in accounting...$125...$0... $ % Dividends Paid to Shareholders...($1,204)...($1,204)...$ % Balance December 31...$58,916...$52, $6, % Certain reclassifications and adjustments may have been made to prior period results as appropriate.

15 OUR CORE VALUES FAMILY We believe our bank family is our most important asset. CUSTOMER RELATIONSHIPS We are committed to providing service excellence and developing customer relationships. TEAMWORK We encourage teamwork in everything we do. COMMUNITY We will continue to be an active participant in our communities. INTEGRITY We insist on confidentiality, honesty, and integrity. FLEXIBILITY We will remain flexible, innovative, and progressive. CELEBRATION We believe in fun and celebration. INDEPENDENCE We will remain an Independent Community Bank.

16 crossplainsbank.com Black Earth 1030 Mills Street (608) Cross Plains Main 1205 Main Street (608) Cross Plains Motor 2535 Main Street (608) Madison 455 S. Junction Road, Ste. 100 (608) Middleton 8301 University Avenue (608) Mount Horeb 1740 Springdale Street (608) Oregon 744 N. Main Street (608) Verona 108 N. Main Street (608) Waunakee 610 W. Main Street (608) Madison East Loan Production Office 2418 Crossroads Drive, Ste (608)