2021ANNUALREPORT

OUR PURPOSE IS TO

EMPOWER CREATORS

by

by

and thereby

PROVIDING

SERVING

ACHIEVING

meaningful financial

those in our care and

superior results

resources and

in our community

human connections

with our very best

that make an impact

HONOR, CAMARADERIE & EXCELLENCE

Contents

Drawing on the strength of our community, Studio Bank flourished in 2021. Here, we are pleased to capture some of the highlights of the year, as well as a comprehensive summary of our organization's financial performance. Inside this annual report you will find:

  • SHAREHOLDER LETTER FROM AARON DORN
  • FINANCIAL HIGHLIGHTS
  • SPECIAL LOAN PROGRAMS
  • PROGRESS & EXPANSION
  • WORKPLACE CULTURE
  • IN THE COMMUNITY
  • LEADERSHIP & BOARDS
  • AUDITED FINANCIAL REPORT
  • SHAREHOLDER INFORMATION

STUDIO BANK 2021 ANNUAL REPORT

SHAREHOLDER LETTER

Dear Shareholders,

A message from Aaron Dorn, Studio Bank's Chairman of the Board, President, and CEO

These are exciting times at Studio Bank! It is a privilege to reflect back on 2021 and report to you the incredible progress our team has made.

2021 was another year of major milestones - record growth on our balance sheet and income statement, accelerated additions to our banking team, commencement of our plans for a new location in Williamson County, a new long-term strategic plan, and our emergence from regulatory "de novo" status! And all of this was accomplished amid the ongoing pandemic and economic uncertainty. While we continued to operate under a hybrid strategy of working from home and office, our workplace culture continued to thrive. We empowered our team members with modern technology to provide our clients the very best in service and banking solutions. Our team is also passionate about serving our Nashville-area community, and we participated in many meaningful volunteer events and sponsorships in 2021, which are discussed in more detail later in this report.

STRONG INCOME GROWTH

We grew total assets in 2021 by 41 percent to $611 million! It was a year of accelerating operating leverage as the bank continued to scale earnings faster than expenses. We generated robust growth in net interest income of 69 percent. We also continued to benefit from the wave of mortgage refinancing activity that resulted from low interest rates. Our most significant noninterest expense, employee compensation, grew by only 20 percent. This factor, along with sound management of other expense categories, enabled our efficiency ratio to improve to 74 percent in 2021 from 85 percent in 2020. All of these efforts led to a five-fold increase in pretax income to $4.3 million for the year.

STUDIO BANK 2021 ANNUAL REPORT

Given the consistent profitability of Studio Bank for the previous ten calendar quarters, management determined it was appropriate to fully reverse the $2.9 million valuation allowance against

the deferred tax assets which resulted from the start-up of the institution. The value to reduce tax liabilities for future earnings is now reflected in our financial statements, resulting in after-tax net income of $6.6 million in 2021.

Additional important highlights of 2021 include:

  • Deposits:
    Growth of 46%, or $172 million
  • Non-InterestChecking Accounts:
    Growth of 117%, or $83 million
  • Total Checking Accounts: Growth of 50%, or $72 million
  • Loans:
    Growth of 53%, or $138 million
  • Cost of Funds:
    Declined 51bps on average, ended the year at 29 bps
  • Net Interest Margin:
    3.34% with PPP fees, 3.18% excluding PPP fees
  • Mortgage Division Fee Income:
    Maintained 93% of volume versus a historic 2020
  • Total Equity:
    $54.6 million, reflecting growth of $5.7 million, and per share of $8.81
  • OTC Pink "STBK" Trade at 12/31/2021: $13.50 per share

FINANCIALS BY THE NUMBERS

As of 12.31.21

$611mm

Total Assets

$547mm

Total Deposits

4,224

Deposit Accounts

$400mm

Total Loans

1,042

Number of Loans

$55mm

Total Equity

$83mm

Market Capitalization

FUELING OUR SUCCESS

Our success to date and our wonderful workplace culture continue to attract some of the best talent in the Nashville banking community.

STUDIO BANK 2021 ANNUAL REPORT

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Disclaimer

Studio Bank published this content on 03 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 June 2022 04:31:01 UTC.