Oxford Bank : Annual Report

COMMUNITY INVOLVEMENT

AND SUPPORT

Boys and Girls Club of Greater Flint Clarkston Area Chamber of Commerce Clarkston Area Youth Assistance Corcoran House

Davison Area Chamber of Commerce Davison Youth Baseball

Dragon on the Lake - Lake Orion Dryden Athletic Boosters Club Eagle Scout Project

Everest Collegiate High School & Academy Flint Handmade

Food Council of Michigan Fraser Eye Care Symposium Greater Flint Health Coalition GreenPath Financial Wellness Habitat for Humanity

Kids Kicking Cancer

Lake Orion Community Schools Lake Orion DDA

Lakes Area Chamber of Commerce Lapeer Area Chamber of Commerce LGBT Detroit

Love for a Child, Inc.

LOVE, Inc. of North Oakland County Macomb County Chamber of Commerce Metamora Lions Club

Orion Area Chamber of Commerce Orion Area Youth Assistance Ortonville DDA

Oxford-Addison Youth Assistance Oxford Chamber of Commerce

Oxford Community Memorial & Victims Fund Oxford DDA

Oxford High School Athletics Oxford Police Department Oxford Women's Club

Oxford/Orion FISH - Neighbors Helping Neighbors Paint a Miracle

Plea Foundation PRISM Men's Chorus

Rochester Regional Chamber of Commerce Romeo High School Athletics Romeo/Washington Chamber of Commerce Shiawassee Economic Development Society of St. Vincent de Paul

Toys for Tots

DEAR SHAREHOLDER:

The past year was very much like 2020, in that financially your Company had another outstanding year. Unfortunately, like 2020, our performance was overshadowed by continued pandemic-induced stress, as well as tragedy for our team. Oxford, our headquarters' community, suffered a terrible tragedy with the attack in our schools, which directly impacted many of our own team members' families. On a professional level, the difficulty in finding new team members and having more people out with COVID caused many of our teams to be thinly staffed while busier than we have ever been with adding new relationships.

And despite all of that, our team, as they did in 2020, once again proved why they are one of the best in the business. Besides the outstanding financial results, our team's immediate and comprehensive response to the school tragedy included staffing/supplying the community's candlelight vigil and setting up a victims' fund with our community partners. The fund raised almost $1.6 million and amply demonstrated how we all care very much about helping people at our core. In fact, our team's resilience, engagement and adaptability in the face of everchanging headwinds is why your Board of Directors believes we have such a bright future. We are gratified that our long-term core strategy of developing a valuable team will continue to create value for stakeholders in the future.

As noted in our fourth-quarter press release, our 2022 earnings will be lower than 2021 because of the decline in PPP income and margin compression. Our plan to return to superior earnings growth is to build on the significant growth of new loan and deposit relationships from the PPP while pursuing several growth initiatives. To that end, our most significant tactic is entering the commercial finance business, which includes collateral-intensive lending, general working capital and equipment financing. This initiative makes sense for us solely because we were able to recruit experienced leaders with long, successful performance records in this business. They are the reason we believe the Company will produce strong returns, because of their discipline in risk management and how they embody our entrepreneurial spirit. Besides the outstanding returns, the commercial finance business is countercyclical, will improve geographical diversity due to the need to originate nationally and will allow us to serve more small businesses in our local communities with a true "one-stop shop" model. In 2022, we are focusing on the working capital segment - factoring and asset-based lending - with the acquisition of a small factoring company while starting to build other segments like leasing and alternative energy.

In the conventional business, we are expanding in the Ann Arbor/Washtenaw County market for the same reason as commercial finance - because we could recruit a superior leader with a lifetime of experience and success in an attractive market. We are also opening an LPO in Macomb County, which is important to expand our Metro footprint and small business growth. These initiatives will negatively impact 2022 earnings, although expected to be accretive in 2023.

Early in 2022, we completed a private placement of OXBC stock, some of it to our new Oxford Commercial Finance executive team or important influencers in that space, which bolstered our capital position to undertake the growth planned. With the aforementioned private placement and the sub-debt issued in Q3, the Bank's Tier One Leverage ratio is over 10%. As a result, we have retained additional capital at the Company to support further growth. In addition, we are still interested in repurchasing shares, although, like many things, this could change.

Thank you for your continuing commitment as an owner, and hopefully a customer, of Oxford Bank Corporation.

David P. Lamb

President, Chief Executive Officer Oxford Bank Corporation

Consolidated Balance Sheet

Assets 2021	2020
Cash and due from banks Interest-bearing time deposit at banks Investment securities - Available for sale Investment securities - Held to maturity Federal Home Loan Bank stock Loans - Net of allowance for loan losses of $5,474 and $4,897 as of December 31, 2021 and 2020, respectively Premises and equipment - Net Accrued interest receivable and other assets	$157,959 12,889 137,482 1,322 698 411,208 8,489 20,818	$36,085 14,128 91,228 1,455 574 537,163 8,254 10,260
Total assets	$750,865	$699,147
Liabilities Deposits: Noninterest bearing Interest bearing	$162,948 505,914	$141,738 446,165
Total deposits Borrowings Accrued interest, taxes and other liabilities	668,862 15,680 3,596	587,903 51,021 5,225
Total liabilities Stockholders' Equity Common stock - No par value; 10,000,000 shares authorized; 2,233,597 and 2,313,582 shares issued and outstanding at December 31, 2021 and 2020, respectively Unearned equity compensation Additional paid-in capital Retained earnings Accumulated other comprehensive income	688,138 22,941 - 1,306 38,481 (1)	644,149 25,285 (13) 867 27,598 1,261

Total stockholders' equity	62,727	54,998
Total liabilities and	$750,865	$699,147
stockholders' equity

Consolidated Statement of Operations

YEARS ENDED DECEMBER 31, 2021 AND 2020 (000'S OMITTED, EXCEPT PER SHARE DATA)

Interest Income	2021	2020
Loans	$24,816	$21,318
Debt securities:
Taxable	1,052	1,220
Tax exempt	63	33
Other	425	596
Total interest income	26,356	23,167
Interest Expense	1,314	1,963
Net Interest Income	25,042	21,204
Provision for Loan Losses	550	1,440
Net Interest Income After	24,492	19,764
Provision for Loan Losses
Noninterest Income
Service charges - deposits	466	394
ATM fee income	704	588
Gain on sale of loans	1,531	938
Loan servicing income	1,194	468
Other	783	712
Total noninterest income	4,678	3,100
Noninterest Expense
Salaries and employee benefits	8,074	7,389
Occupancy and equipment	1,930	1,697
Data processing	2,353	2,065
Other loan expense	123	366
Other	2,875	2,460
Total noninterest expense	15,355	13,977
Income - Before income taxes	13,815	8,887
Income tax expense	2,932	1,886
Consolidated Net Income	10,883	7,001
Earnings per Weighted Average Share - Basic	$4.77	$3.05

Consolidated Statement of Changes in Stockholders' Equity

Common StockBalance - January 1, 2020

Comprehensive income:

Consolidated net income

Change in net unrealized gain on securities available for sale - Net of tax effect of $182

Grant of restricted stock units (23,563 shares)

Equity compensation expense

$25,285

- -

Balance - December 31, 2020

- - $25,285

Comprehensive income:

Consolidated net income

Change in net unrealized loss on securities available for sale - Net of tax effect of ($335)

Repurchase of Shares

Grant of restricted stock units (13,971 shares)

Equity compensation expense

- -(2,344) - - - - (2,344)

Balance - December 31, 2021

- - $22,941

COVID-19 Data

# SBA PPP loans originated in 2020

# SBA PPP loans originated in 2021

$ SBA PPP loans originated in 2020

$ SBA PPP loans originated in 2021 $ SBA PPP loans outstanding at

Dec 31, 2021

# Loans deferred during the pandemic # Loans remaining on deferral at

1,350

591 $247,256 $96,882 $61,630

253

-

Dec 31, 2021

Unearned Equity

CompensationAccumulatedAdditional

Paid-in CapitalRetained Earnings

Other Comprehensive

(Loss) IncomeTotal

$(64)

$547

$20,597

$225 $46,590

- -

- -7,001

- 7,001

-

1,036 1,036

- 51 $(13)

320 - - 320

- - - 51

$867

$27,598

$1,261

$54,998

- -- -

10,883

-

10,883

-

(1,262) (1,262)

- 13

439 - - 439

- - - 13

-

$1,306

$38,481

$(1)

$62,727