Two Rivers Financial : Annual Report - 2021

A N N U A L R E P O R T 2 0 2 1

The Two Rivers team has been Unwavering in their Commitment to our customers and their fellow team members.

Two Rivers Financial Group, Inc. Shareholders,

Despite the challenges affecting all of us in 2021, Two Rivers Financial Group, Inc. (TRFG) delivered strong financial results. Two Rivers Bank & Trust (TR Bank) recorded strong fee income from Two Rivers Wealth Management (TR Wealth Management) and the SBA Payment Protection Program (PPP). Technologies resulting from the pandemic allowed our teams to continue to build customer relationships that contributed to strong earnings in 2021.

2021 Highlights

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• TRFG converted to Direct Registration System for TRVR stock on January 31, 2021.
• TRFG transferred its TRVR shares to the OTCQX® Market on February 9, 2021.
• TRFG adopted a stock repurchase program approved on April 21, 2021.
• TR Bank marked a record year of earnings of $10 million, a 1.00% return on average assets (ROAA).
• TR Wealth Management assets under management (AUM) exceeded $1.33 billion.
• TR Bank President & CEO, Shane Zimmerman, celebrated his 1-year anniversary with the Company.

TWO RIVERS FINANCIAL GROUP, INC. (TRFG) reported consolidated net earnings of $9,193,165 in

2021 compared to $20,442,165 in 2020. This represents $4.24 earnings per share in 2021 compared to $9.27 earnings per share in 2020. Book value increased from $47.13 in 2020 to $49.51 in 2021, or 5.05%.

On December 17, 2021, TRFG rewarded shareholders with a cash dividend of $0.68 per share. TRFG has consistently provided shareholders an annual dividend since 1989, with this year's increase of 3.03% marking the fourth increase in the last five years.

TRFG shares (OTCQX®-TRVR) closed the year trading at $42.65. Historic prices, dividend payments and current trading prices can be accessed 24/7 at: http://investors.tworiversfinancialgroup.com/Stock. We are pleased to now trade on the OTCQX® platform. Thank you to our shareholders who have elected to convert to Direct Registration System.

TRFG Board of Directors deployed excess capital through a Stock Repurchase program in April 2021. TRFG repurchased approximately 1.44% of outstanding shares providing greater liquidity, as well as return on equity, for owners of TRVR shares.

TWO RIVERS BANK & TRUST (TR BANK) reported earnings of $10,059,675 in 2021 compared to $9,285,917 in 2020, an increase in earnings of 8.3%. The 2021 bank earnings were a new record high.

In support of businesses and employees in the communities we serve, TR Bank serviced 448 SBA PPP loans totaling approximately $34 million. Since the inception of the SBA program, TR Bank has recorded nearly $110 million in PPP loans. The Residential Mortgage team generated strong fee income through the secondary mortgage market, as well as in-house mortgage products, successfully providing homeownership to 743 individuals. We are proud to have provided support and opportunities for our customers and neighbors.

TR Wealth Management earned more than $4.3 million in revenue and exceeded $1.33 billion AUM. The department successfully converted to a new operating system in 2021 that will enable TR Wealth Management to provide enhanced reporting and tools to our customers.

The Retail Banking team continued to be the face of TR Bank, serving our customers in our branches. They demonstrated tremendous professionalism and resiliency through the varied pandemic conditions. This included sharing team members across the markets we serve. They truly worked as a team in every sense of the word.

The TR Bank website (www.tworivers.bank) received a facelift that enhanced features while continuing to offer the same security and access for our customers. Additional services include checking and savings account opening, the ability to set an appointment with a branch team member, and easy access to apply for a loan. We will continue to add features to the website to make it as easy as possible to help our customers reach their financial goals.

Volunteerism and community support regained momentum in 2021. Team members and community volunteers in the Southeast Iowa market were once again able to participate in the TR Bank Paint-A-Thon. This contribution of time, effort, and funding was especially uplifting during the continuation of the pandemic to both homeowners and volunteers. TRFG remained involved in community priorities with individual volunteer efforts, organizational leadership through boards and committees, and financial support to food pantries, community events and numerous non-profit organizations in the neighborhoods we serve.

The team has been unwavering in their commitment to our customers and their fellow team members. As our customers continued to be faced with professional and personal uncertainties, TRFG was their trusted partner. The value of relationships and their importance was shared with team members this year in meaningful ways by our customers, reinforcing our commitment to our foundation; Relationships Build Success.

I would like to express my sincere gratitude to each team member for their dedication and commitment to TRFG, TR Bank and our customers this past year. Our success is driven by the authentic interactions between customers and team members, and it is our team and their dedication that is our differentiator.

Moving forward, our focus is on providing products and services that forge trusted partnerships and relationships, supporting sustainable growth to build shareholder value. The financial results of 2021 were impressive and in large part were driven by the fee revenue of the SBA PPP. The team has a keen focus on the job at hand, building sustainable relationships and earnings in every neighborhood we serve.

On behalf of the Board of Directors, I invite you to electronically attend the virtual meeting which will be held on Wednesday, February 23, 2022, at 5:30 pm, CST.

Registration information for virtual attendance can be found at: http://investors.tworiversfinancialgroup.com. Please register in advance as once the annual meeting is in session, registration is closed.

Please vote by following the instructions on the Annual Meeting Notice as soon as possible. You may vote your proxy via telephone, internet or mail. It is the Board's recommendation you vote your shares for each of the director nominees presented on your proxy. Your vote is important.

For our shareholders, customers and team members who have been affected by the virus, I offer my sincere sympathies. May 2022 be a year of recovery for our communities and country.

Respectfully,

FRANK J. DELANEY

Chair & Interim CEO

Two Rivers Financial Group, Inc.

IN THOUSANDS, EXCEPT FOR SHARE DATA

CONSOLIDATED BALANCE SHEETS | December 31, 2021, 2020 and 2019 (unaudited)

ASSETS	2021	2020	2019
Cash and due from banks	$147,008	$135,858	$12,730
Federal funds sold	$579	$286	$214
Investment securities	$173,503	$108,526	$85,291
Loans before allowance for loan losses	$637,481	$728,325	$718,997
Allowance for loan losses	($9,884)	($10,760)	($7,804)
Goodwill and other intangibles	$8,689	$8,896	$14,465
Other assets	$36,151	$39,470	$38,162
Total assets	$993,527	$1,010,601	$862,055

LIABILITIES AND STOCKHOLDERS' EQUITY	2021	2020	2019
Deposits	$846,269	$829,108	$705,657
Securities sold under agreements to repurchase	$26,937	$33,125	$21,317
Borrowings	$0	$25,234	$35,400
Junior subordinated debentures	$10,310	$10,310	$10,310
Other liabilities	$3,143	$9,844	$6,605
Total liabilities	$886,659	$907,621	$779,289
Stockholders' equity	$106,868	$102,980	$82,766
Total liabilities and stockholders' equity	$993,527	$1,010,601	$862,055

		2021		2020	2019
Book value		$49.51		$47.13	$37.52
Tangible book value		$45.49		$43.06	$30.96
CONSOLIDATED STATEMENTS OF INCOME |	Years Ended December 31,	2021, 2020 and 2019	(unaudited)
		2021		2020	2019
Interest income		$29,246		$33,675	$35,541
Interest expense		$2,074		$4,245	$8,337
Net interest income		$27,172		$29,430	$27,204
Provision for loan losses		$510		$3,050	$1,255
Net interest income after provision for loan losses		$26,662		$26,380	$25,949
Non-interest income		$13,653		$23,026	$17,713
Net gain on sale of subsidiary		($19)		$13,391	$0
Operating expenses		$28,888		$36,451	$35,959
Income taxes		$2,215		$5,904	$2,316
Net income		$9,193		$20,442	$5,387
		2021		2020	2019
Earnings per share		$4.24		$9.27	$2.42
Cash dividends declared per common share		$0.68		$0.66	$0.64

IN THOUSANDS

BALANCE SHEETS | December 31, 2021, 2020 and 2019 (unaudited)

ASSETS	2021	2020	2019
Cash and due from banks	$137,008	$135,858	$11,950
Federal funds sold	$579	$286	$214
Investment securities	$173,503	$108,526	$85,291
Loans before allowance for loan losses	$637,481	$728,325	$718,997
Allowance for loan losses	($9,884)	($10,760)	($7,804)
Goodwill and other intangibles	$8,689	$8,896	$9,104
Other assets	$33,599	$34,987	$35,781
Total assets	$980,975	$1,006,118	$853,533

LIABILITIES AND STOCKHOLDERS' EQUITY	2021	2020	2019
Deposits	$848,202	$848,667	$706,708
Securities sold under agreements to repurchase	$26,938	$33,125	$21,317
Borrowings	$0	$25,000	$35,000
Other liabilities	$2,659	$3,623	$4,729
Total liabilities	$877,799	$910,415	$767,754
Stockholders' equity	$103,176	$95,703	$85,779
Total liabilities and stockholders' equity	$980,975	$1,006,118	$853,533

STATEMENTS OF INCOME | Years Ended December 31,	2021, 2020 and 2019 (unaudited)
		2021		2020		2019
Interest income			$29,246		$33,674	$35,532
Interest expense			$1,875		$3,953	$7,797
Net interest income			$27,371		$29,721	$27,735
Provision for loan losses			$510		$3,050	$1,255
Net interest income after provision for loan losses			$26,861		$26,671	$26,480
Non-interest income			$13,551		$11,969	$9,119
Operating expenses			$27,788		$26,617	$26,513
Income taxes			$2,564		$2,737	$2,051
Net income			$10,060		$9,286	$7,035

Wholly owned subsidiary of Two Rivers Financial Group Inc.