Unaudited Pro Forma Condensed Combined Balance Sheet

March 31, 2018

(Dollars in Thousands, Except Per Share Data)

Pro Forma Condensed Combined Statement of Operations (Unaudited)

For the Three Months Ended March 31, 2018

(Dollars in Thousands, Except Per Share Data)

Pro Forma Condensed Combined Statement of Operations (Unaudited)

For the Year Ended December 31, 2017

(Dollars in Thousands, Except Per Share Data)

(1)

To record the payment of the total purchase price of $4.6 million, redemption of note payable and accrued interest of $3.1 million, $1.5 million of accrued interest on subordinated debentures, $120,000 of expenses and the elimination of Hometown’s historical equity accounts of $1.4 million.

(2)

To record estimated transaction expenses to be incurred totaling $2.5 million, or $2.0 million (net of tax).

(3)

To adjust loans of Hometown to approximate fair value. The loan fair value adjustment includes a $4.2 discount adjust for credit deterioration of the acquired portfolio and a $1.8 million discount for the impact of changes in market interest rates. In addition, $439,000 of deferred loan costs were eliminated.

(4)

To eliminate Hometown’s allowance for loan losses of $2.3 million.

(5)

To record a fair value adjustment to increase premises and equipment by $798,000. The adjusted amounts will be depreciated over the straight-line method over 39 years.

(6)

To record fair value adjustment to reduce foreclosed assets held for sale by $400,000.

(7)

To record a core deposit intangible of $3.5 million to be amortized over a 7 year useful life using an accelerated method.

(8)

To record the fair value adjustment to increase deferred tax assets by $1.3 million.

(9)

To record a fair value adjustment to increase time deposits by $247,000. The amount will be accreted over 2 years.

(10)

To record redemption of Hometown note payable to bank of $3.0 million.

(11)

To record the fair value adjustment on subordinated debentures of $176,000. The amount will be accreted over 2 years.

(12)

To record the payment of accrued interest on note payable to bank ($97,000), accrued interest on subordinated debentures ($1.5 million) and various other closing expenses

(13)

To record goodwill of $2.6 million resulting from the difference between purchase price and identifiable adjustments to net assets as follows (dollars in thousands):

(14)

To record accretion on the credit and interest rate adjustments on the loan portfolio.

(15)

To record accretion on the interest rate adjustments for time deposits.

(16)

To record accretion on interest rate adjustment on subordinated debentures.

(17)

To record decreased depreciation expense on the fair market value adjustments of premises and equipment and the impairment expense recognized for the fiscal year 2017.

(18)

To record amortization of core deposit intangible.

(19)

To record tax effect at an effective rate of 20%.

(20)

Impairment charge is a non-recurring expense that represents write-downs on Hometown’s banking facilities for the year ended December 31, 2017.