2019 Annual Report

with yourHometown Banking Hometown Friends!

I am pleased to report that Tri-County Bancorp, Inc. continues to be a vibrant, growing and pro�table banking franchise. Many consumers in our footprint still prefer a community bank. Which is why we’ve created a robust retail delivery system of 12 branch o�ces strategically spread across our market area designed to provide a high level of service to customers wherever and whenever they want. �is strategy has resulted in a strong, stable boost in core deposits, giving us low-cost access to funding we can use to grow our business and o�er a�ordable �nancial services to the areas we serve. Our business model is a powerful, evolving and proactive model that continuously meets the needs and demanding changes of our customers and communities. We have assembled a talented management team that possesses extensive experience and knowledge in their speci�c areas. In 2019, the Bank recorded its 6th consecutive year of all-time record consolidated earnings. Net income for the year increased signi�cantly from $4,430,169 in 2018 to $5,019,074 at year end 2019. �is increase is equivalent to $588,905 and 13.29% year over year. �ese earnings resulted in a Return on Assets of 1.63% which drastically outpaced the state of Michigan average of 0.98%. Total assets, net loans and deposits as of December 31, 2019, were $319,341,335, $249,607,115 and $275,019,539 respectively compared to totals at December 31, 2018, of $297,460,921, $221,387,350 and $262,346,340. �is resulted in a year-over-year increase of 7.36%, 12.75% and 4.83% respectively. Total shareholder equity increased from December 31, 2018 to December 31, 2019 by 16.15% or $5,597,651 from $34,650,429 to $40,248,080. �e total dividend paid in 2019 was 86 cents per share - an increase of 22.85% over 2018. �e stock valuation conducted by an independent 3rd party concluded a value of $66.20 as of December 31, 2019 - an increase

of $16.70 or 33.73% over the prior year end.2019 was an exciting year for the Tri-County Bank

family. In June, we consolidated our 3 existing Brown City locations and moved into our new corporate headquarters located in downtown Brown City. We were very pleased to sell all 3 existing buildings before year end 2019. In October, we opened a new branch in Romeo –our �rst location in Macomb County.

In July, 2019 Glenn Kreiner retired from the Tri-County Bank Board of Directors a�er over 30 years of service. We are very grateful for his many years of wise counsel, commitment, loyalty and integrity. We wish him all the best and hope he fully enjoys his retirement.

In 2019 we implemented new platforms for our debit card processing, deposit account opening and teller processing. �ese platforms enhance our core processing system to provide our sta� a better, more e�cient way to serve our customers. We are excited for the upcoming projects in 2020. We will be introducing some new products and services to help meet the needs of our customers. We will also continue to make information security one of our top priorities. We recognize that the security of information requires an ongoing commitment to protect the customer’s information and deliver exceptional customer service.

My sincerest appreciation goes out to all of the employees and management that have made our success possible. In addition I thank our shareholders, customers and community members who continue to put their trust in our services, our products, and our people. We look forward to continuing to serve you in 2020 and beyond and together making our Bank and our communities the envy of all others.

Sincerely,Michael A. Ford,

President and Chief Executive O�cer

To our Shareholders, Customers and Friends:

MESSAGE FROM THE PRESIDENT

Tri-County Bank was ranked 4th overall of the 87 community banks in Michigan by the Financial Management Consulting Group (FMC). �e performance report considers many key factors such as margin, fee income, e�ciency, asset quality, and earnings.

2016 • 2017• 2018 • 2019Banker’s Caddy LLC ranks the overall performance of a custom peer group of banks located in Michigan and Ohio. Overall bank performance ranking is calculated by using the percentile rankings for certain ratios representing capitalization, asset quality, earnings, liquidity and growth.

RANKED #1 BANK IN OVERALL PERFORMANCE, 4 CONSECUTIVE YEARS BY

BANKER’S CADDY, LLC.

RANKED #4 BY FMC

BauerFinancialAwarded a

5-STAR RATINGFor 31 consecutive quarters!

PERFORMANCE RECOGNIZED

FINANCIALS

RESULTS OF OPERATIONSInterest Income $ 10,121 $ 10,850 $ 11,885 $ 13,278 $ 15,314Interest Expense 790 383 794 980 1,860Net Interest Income 9,331 10,467 11,091 12,298 13,454Provision for Loan Loss 172 180 73 394 174Noninterest Income 1,707 2,186 1,805 1,882 2,056Noninterest Expense 7,529 7,858 8,057 8,306 9,092Income before income taxes 3,337 4,617 4,766 5,480 6,244Income Tax Expense 916 1,415 1,430 1,050 1,225Net Income 2,421 3,202 3,336 4,430 5,019

PERIOD END TOTALSTotal Assets $ 246,279 $ 269,739 $ 283,678 $ 297,461 $ 319,341Gross Loans 149,650 171,978 188,384 223,270 251,626Allowance for Loan Losses 1,464 1,587 1,516 1,882 2,018Total Deposits 218,260 240,761 251,685 262,346 275,020Total Borrowed Funds - - - - 3,000Stockholder's Equity 26,181 27,399 30,742 34,651 40,248

PER SHARE DATAEarnings Per Share $ 2.44 $ 3.26 $ 3.38 $ 4.47 $ 5.04Book Value 26.42 27.90 31.11 34.93 40.38Market Price Per Share* 31.50 35.50 39.25 49.25 59.75

PERFORMANCE RATIOSReturn on Average Assets 1.00% 1.24% 1.21% 1.52% 1.63%Return on Average Equity 9.70% 11.95% 11.48% 13.55% 13.40%E�ciency Ratio 68.21% 62.10% 62.48% 58.58% 58.62%

ASSET QUALITY RATIOSNon-Performing Assets/OREO to Loans 0.16% 0.03% 0.00% 0.20% 0.64%Net Charge-O�s to Average Loans 0.12% 0.04% 0.08% 0.01% 0.02%Allowance for Loan Losses to Loans 0.98% 0.92% 0.80% 0.84% 0.80%

CAPITAL RATIOS**Total Risk-Based Capital 17.70% 16.89% 16.92% 16.55% 16.48%Tier 1 Risk-Based Capital 16.74% 15.97% 16.13% 15.71% 15.68%Tier 1 Leverage Capital 10.33% 10.22% 10.85% 11.91% 12.41%

* Based on last trade through each year end.** Indicates ratios attributable to Tri-County Bank

$ IN THOUSANDS, EXCEPT PER SHARE DATA

2015 2016 2017 2018 2019

FINANCIALS

Record Net Income

$5.0 millionTotal Asset Growth

$21.9 millionTotal Loan Growth

$28.4 million

Total Deposit Growth

$12.7 million

15.68%Strong Capital

Position(Tier 1 capital to risk weighted assets)

TRI-COUNTY BANK'SBOARD OF DIRECTORS

2019 HIGHLIGHTS

from left . . .Jeffrey Liebler, Director

Michael A. Ford, Director, President & CEOFrancis Glinski, Chairman; Marlene McLeod, Director

Mark E. Wendt, Vice-Chairman; M. Kelly Martin, Director

TRI-COUNTY BANCORP, INC. HOLDING COMPANY BOARD

Board of Directors from left . . .Timothy Clemans, Director

Aric Crake, DirectorLaurence C Lang II, Chairman

Michael A. Ford, DirectorFrancis Glinski, Director

Mark E. Wendt, Vice-Chairman

Vonda Zuhlke, Secretary (not pictured)

CORPORATE OFFICERS

Michael A. Ford President & Chief Executive Officer

Vonda ZuhlkeSecretary &

Treasurer

SENIOR MANAGEMENT TEAM

from left . . .Mark Shadley, Senior Vice President/Chief Lending Officer

Michael A. Ford, President/Chief Executive OfficerVonda Zuhlke, Executive Vice President/Chief Operations Officer/

Information Securities Officer Michael Boushelle, Senior Vice President/Chief Financial Officer

Joseph Worden, Senior Vice President/Business Development Officer

Tri-County Bank

6 YEARS OF RECORD EARNINGS

$5,019,0002019

$4,430,0002018

$3,336,0002017

$3,202,0002016

$2,187,0002014

$2,421,0002015

OUR YEAR IN PHOTOS

OUR YEAR IN PHOTOS

DONATIONS THROUGHOUT THE YEAR Yale Bologna Candidates & Festival Yale Senior Center Yale Lions Club Kim Ross Fundraiser Yale Public Schools Sandusky School Peck School Peck Little League Peck Sons Of �e American Legion Sanilac ISD Marlette Sports Boosters Marlette Baseball/So�ball City Of Marlette Festival Marlette Country Christmas Peck Summer Festival Yale Elementary PTO Boardwald Yale-Opoly Boy Scout Troop 132 Yale Car Show Class Sponsorship Greenwood Little League �umb Jackpot Beef Education Yale Public Schools Robotics Team Yale Public Schools Academic Awards Farm Day 2019 (Capac) A.I.C. Kiwanis 2019 Golf Outing Romeo Foundation Armada Agricultural Society Peach Festival Parade Romeo High School Greater Romeo Washington Chamber Of Commerce Blue Water Area Robotics Alliance Armada Fair Romeo Chamber Of Commerce

Parks & Rec Romeo- Washington-Bruce Lapeer County Education & Tech Center Kingston, Marlette & North Branch United Hospice Service Kingston Football Outdoor Night Tuscola Co. Farm Bureau Project Red Kingston Days Parade American Legion Post 7 Golf Scramble Hawaiian Fun Run/Walk Caro Relay For Life Kingston Fire And Rescue Kingston Youth In Government Field Day – Ferkowicz Farm Imlay City Fire Dept. Smoke Detector Program Imlay City Athletic Boosters / Banner Advertising Sign Imlay City Chamber Of Commerce 2nd Annual Busker Festival Imlay City Rotary Club 5K Run/Walk Imlay City Christian School Lapeer County Health Dept. Senior Expo Eastern Michigan State Fair Lapeer Days Partnership Form ICCS Turkey Trot Imlay City Equestrian Team Imlay City DDA Lapeer Area Chamber Of Commerce Romeo Goodfellow Association Capac Chamber Of Commerce

Capac Youth Baseball League/ Team & Field Banner St. Clair Co. Farm Bureau, Project R.E.D. Capac Community Schools Welcome Back Sta� Breakfast Capac American Youth Soccer Organization Region 1296 Capac Area Chamber Of Commerce Lapeer County 4-H Auction Committee Hog Town Inc. Deckerville Bike Tour Tuscola Co. Farm Bureau/ Dinner On �e Farm 2019 Lapeer Days Festival Lapeer Co. Health Dept. Senior Expo Veterans Esteem Team Brown City Schools Digital Ads Sanilac Co. 4-H Fair W 1st Annual 3D Archery Fundraiser/ United Hospice Mid �umb Bowmen Youth League Sponsorship Heritage Festival Almont Athletic Boosters North Branch Area Business Association North Branch Schools Welcome Back Breakfast North Branch Days (Cutest Baby) North Branch Summer Rec. North Branch Lion’s Club (Bump & Run/ 5K) Port Huron Rotary

SCHOLARSHIP WINNERS

COLORING CONTEST WINNERS

Michael A. Ford.................................................................................................... President, Chief Executive O�cerVonda Zuhlke............................ Executive Vice President, Chief Operations O�cer, Information Securities O�cerMark Shadley................................................................................... Senior Vice President, Chief Lending O�cerMichael G. Boushelle................................................................................. Senior Vice President, Chief Financial O�cerJoseph Worden...................................................................... Senior Vice President, Business Development O�cerBlair Christner...............................Vice President, Branch Administrator, Retail Loan O�cer, Brown City Branch ManagerBradley Bissett................................ Vice President, Chief Credit O�cer, ERM O�cer, Commercial Loan O�cer Frederick Manuilow........................................................................................ Vice President, Commercial Loan O�cerJennifer Vanecek.......................................................................................... Vice President, Senior Mortgage LenderPaul Burgess..................................................................Vice President, Senior Ag Loan O�cer, Security O�cerKendra Jickling............................................ Vice President, Marlette Branch Manager, Commercial Loan O�cerKimberly Davis.......................................................................................... Vice President, Romeo Branch ManagerKelly Wood.......................................................................................... Vice President, Controller, HR ManagerEric Bucklew..............................................................................Vice President, Information Technology ManagerPeggy Kalbfleisch................................................................................. Vice President, BSA/OFAC/AML/CIP O�cerChad Stoldt.........................................................................Assistant Vice President, Commercial Loan O�cerGavin Frederick......................................... Assistant Vice President, Credit Analyst, Commercial/Ag Loan O�cerLouann Krzak...............................................................................Assistant Vice President, Yale Branch ManagerSheryl Cribbins..............................................Assistant Vice President, Peck Branch Manager, Retail Loan O�cerTara Antonelli.........................................Assistant Vice President, Almont Branch Manager, Retail Loan O�cerJoanne Wills......................................................................Assistant Vice President, Compliance & CRA O�cerMaria Fleisher................................................................. Assistant Vice President, Assistant Chief Operations O�cerKaren Crews............................................................... Assistant Vice President, Loan Documentation Manager Dove Waltz...............................................................................Kingston Branch Manager, Marketing Director EmilyAnn Connors.................................................................................................................... Capac Branch ManagerHeather Hart............................................................................................................. Imlay City Branch ManagerJill Bahrke........................................................................................................ North Branch Branch ManagerMaryLou Jacobs......................................................................................................................... Collections ManagerEmily Losinski.............................................................................................................................................. AuditorAbigail Hunter..................................................................................Compliance O�cer, IRA/HAS AdministratorJolene Harding......................................................................................................... FHLMC Custodial Accounting

TRI-COUNTY BANK MANAGEMENT

«««« ««

«««15 Years«10 Years

«««««5 Years

Brenda Ginn

Pamela Klauer

Paul Burgess

EmilyAnn Connors

MaryLou Jacobs

FeliciaDudley

Robert Jacobson

Sarah Kennedy

MILESTONES

TRI-COUNTY BANK LOCATIONSKINGSTON

5915 State StreetKingston, Michigan 48741

989.683.2023 – Telephone989.683.2024 – Fax

BEN’S SUPERMARKET BRANCHMARLETTE

3418 Main StreetMarlette, Michigan 48453

989.635.0639 – Telephone989.635.0638 – Fax

MARLETTE3482 S. Main Street

Marlette, Michigan 48453989.635.3320 – Telephone

989.635.3366 – Fax PECK2 E. Lapeer Street

Peck, Michigan 48446810.378.5505 – Telephone

810.378.0005 – Fax

YALE7514 S. Brockway RoadYale, Michigan 48097

810.387.3201 – Telephone810.387.9520 – Fax

NORTH BRANCH6681 Bernie Kohler Drive

North Branch, Michigan 48461810.688.4163 – Telephone

810.688.4158 – Fax

IMLAY CITY6730 Newark Road

Imlay City, Michigan 48444810.724.0090 – Telephone

810.724.7875 – Fax

FRONNEY’S SUPERMARKET BRANCH

CAPAC3433 Capac Road

Capac, Michigan 48014810.395.8113 – Telephone

810.395.8230 – Fax

ROMEO209 S. Main Street

Romeo, Michigan 48065586.331.6888 – Telephone

ALMONT4511 Van Dyke

Almont, Michigan 48003810.798.3907 – Telephone

810.798.8859 – Fax

MORTGAGE CENTER4511 Van Dyke

Almont, Michigan 48003800.346.9909 – Toll Free

810.798.3872 – Fax

BEN’S SUPERMARKET BRANCHBROWN CITY4436 Main Street

Brown City, Michigan 48416810.346.8100 – Telephone

810.346.8200 – Fax

MAIN OFFICE4190 Main Street

Brown City, Michigan 48416810.346.2745 – Telephone

810.346.2500 – Fax

OPERATIONS810.346.4760 – Telephone888.346.0800 – Toll Free

810.346.3342 – Fax