CBCCounty Bank Corp

CBCCounty Bank Corp2

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COUNTY BANK CORPLakestone Bank & Trust83 West Nepessing St., Lapeer, MI 48446LAKESTONEbank.com 810.664.2977

Stock Transfer AgentAmerican Stock Transfer & Trust Company, LLC6201 15th AvenueBrooklyn, NY 11219(888) 509-4619 option 1or (718) 921-8124 astfinancial.com

Market MakerBoenning & ScattergoodNick Bicking & Tom Dooley 9922 Brewster Lane Powell, OH 43065 (866) 326-8113 boenninginc.com

Independent AuditorsCrowe Horwath, LLP55 Campau Ave. NW, Ste. 500 Grand Rapids, MI 49503 (616) 774-0774 Fax: (616) 752-4226

Stock SymbolCBNC

Annual MeetingThe County Bank Corp annual meeting will be Friday, May 12, 2017, at 3:30 p.m. The meeting will be held at the Countryside Banquet Center, 596 S. Cedar Street, Imlay City, MI 48444

Contents 02 Letter from the Chairman & CEO and President

03 Financial Summary

04 Board of Directors

06 Financial Statement

07 Consolidated Balance Sheets

08 Consolidated Statements of Income

09 Milestones

12 Bank Officers

Both banks enjoyed long and successful experiences as quintessential community banks, proudly ServIng The coMMunITIeS in which they were located. Under the combined banner of Lakestone Bank & Trust, ThAT TrAdITIon conTInueS.

“ “

To our Shareholders, Customers and Friends,

We are very proud of the financial performance that County Bank Corp delivered in 2016 and the value created for the shareholders.

Proud, because it was a year domi-nated by historically low interest rates, modest economic growth, political change, ever-increasing regulatory requirements and most importantly, the corporate merger of Capac Bancorp and County Bank Corp with the corresponding merger of CSB Bank and Lapeer County Bank & Trust Co.

The merger agreement was an- nounced on February 16, 2016 and from that point forward until the banks merged on December 2, the efforts of all of the employees of both banks were either squarely centered on the merger process or the uncertainty

that would seemingly follow. More than any year in recent memory, 2016 required strong management focus and a dedication from employees from both organizations to complete the merger process.

Prior to the merger, both banks enjoyed long and successful experi-ences as quintessential community banks, proudly serving the communi-ties in which they were located. Under the combined banner of Lakestone Bank & Trust, that tradition continues.

With the merger, consolidated year-end corporate assets went from $324 million to $584 million, loans expanded from $170 million to $314 million and deposits increased from $285 million to $520 million.

The Bank now operates 14 branches in three southeastern Michigan counties and provides financial services to over 25,000 customers.

Net income in 2016 was $2.9 million after non-recurring, merger related expenses of $2.7 million. This compares to $3.5 million in 2015. The earnings per weighted shares outstanding were $2.28 compared to $3.25 in 2015.

Cash dividends totaling $2.088 million were paid to shareholders and after adjusting shareholder equity for unrealized losses in the investment portfolio, total shareholders’ equity was $55 million. Unrealized losses or gains in this instance are fair market adjustments to the value of an invest-ment security at any point in time. They are losses or gains if the investment securities are sold and realized at that point in time. Adjust-ments are made directly through the capital account and when they are not other than temporarily impaired adjustments, do not flow through the profit & loss statement.

Credit quality continued to improve during the year, with adversely classified and non-performing loans decreasing over $2 million, resulting in year-end ratios of .7% of net loans and 3.8% of equity capital.

The Bank also continued its unparalleled support of the local communities it serves by contribut-ing over $150,000 in donations and sponsorships. This extraordinary community support was a hallmark of both CSB Bank and Lapeer County Bank & Trust Co. and will continue with Lakestone Bank & Trust.

New officers of the Bank include Kristie Waldorf, manager of the Metamora office and Durynda Kiefer, manager of the Armada office. Also of note, was the opening of our Port Huron loan production office in October.

Regretfully, we announce the Board of Director retirements of Dr. Ernie Lefever after 20 years and Ron Tosch after 18 years of dedicated service. We wish them well in retirement. They will be missed.

Finally, we would be remiss if we didn’t recognize the tremendous

guidance and support of the Boards of Directors of both banks, which along with the effort of the combined staff, made the merger as seamless as possible.

The annual meeting will be held in Imlay City this year at the Countryside Banquet Center. The facility is located at 596 S. Cedar St. or M-53.

The meeting will be held on Friday, May 12 and begin at 3:30 p.m. Please join us there.

On behalf of the Board of Directors, officers and employees, thank you for your continued support and confidence in Lakestone Bank & Trust.

Very truly yours,

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LCBT & CSB =

Bruce J. cAdy, Chairman & CEO

MIchAel J. Burke, Jr., President

With the merger, consolidated

year-end corporate assets went from $324 million to $584 million, loans expanded

from $170 million to $314 million and deposits increased from $285 million to

$520 million.

2016 Financial Summary

Bruce J. Cady, Chairman & CEO

Michael J. Burke, Jr., President

AT yeAr end (000s omitted) 2016 Total assets $ 583,779

Total deposits 520,316

Total loans 315,318

Total securities 211,063

Total stockholders’ equity 55,000

For The yeAr (000s omitted)

Net income $ 2,911

Cash dividend paid 2,088

Return on average assets (%) 0.70

Return on average stockholders’ equity (%) 6.64

per ShAre

Book value $ 31.45

Net income 2.28

Cash dividends paid 1.40

County Bank Corp 2016 AnnuAl RepoRt 3 2 2016 AnnuAl RepoRt County Bank Corp

County Bank Corp 2016 AnnuAl RepoRt 5

Daniel J Duncan

01 02 03 04

08070605

09 10

11 12 13

14 15

Dr. Ernest Lefever attended Northwestern University in Evanston, Illinois and received his undergraduate B.A. degree and post-graduate M.S. degree from that institution. He gradu-ated cum laude from the Illinois College of Podiatric Medicine and completed a podiatric surgical residency at Northlake Community Hospital in Illinois. Dr. Lefever is Board Certified by the American Board of Podiat-ric Surgery and is a Fellow of the American College of Foot and Ankle Surgeons. He be-gan his practice with a group in Davison, Michigan in 1979 and opened his own practice in Lapeer, Michigan in 1981. Dr. Lefever joined the Professional Foot and Ankle Centers group

in June of 2013 and retired in November of 2016. He is on staff at McLaren Lapeer Region, Genesys Regional Medical Center and Lapeer County Surgery Center.

Dr. Lefever was elected to the Board of Directors in 1996. Over his 20 years of service he served on the Capital, Insurance, In-vestment and Loan committees.

He is a life member of the Lapeer Optimist Club and a member of the Lapeer Elks Club. He enjoys golfing, boating and gardening. Dr. Lefever lives in Lapeer with his wife Vicky. They have two sons and two grandsons.

Board of directors

(from left) 01. Daniel J. Duncan 02. David J. Churchill J.D., 03. Scot

D. Sheldon, 04. Eric E. Burrough, 05. Michael H. Blazo, 06. Michelle M.

Wendling, 07. Patrick A. Cronin, 08. Gary M. Gariglio, 09. Michael J. Burke Jr., 10.

Bruce J. Cady, 11.Gregory A. McConnell, 12. Timothy L. Oesch, CPA, 13. David H. Bush,

O.D., 14. Curt E. Coulter, D.O., 15. Harold J. Burns, CPA

Mr. Ronald Tosch owns and operates Tosch Auction Service and Equipment Sales. The com-pany specializes in farm imple-ment sales, including new and used parts. Much of his time is directed towards the auctioneer service and real estate sales. Mr. Tosch also leads the family farm operations where they primarily produce crops, such as beans and corn.

Mr. Tosch was elected to the Board of Directors of Capac Bancorp, Inc. in 1998, which then merged with County Bank Corp in 2016. He served on the

Audit Committee. Mr. Tosch brought extensive knowledge of equipment and farming operations to the board and helped grow the Bank’s agricultural relationships.

Mr. Tosch lives in Capac with his wife Kim and their two children.

Ronald Tosch ReTiRes from the Board of Directors

eRnesT W. lefeveR, d.P.M. ReTiRes from the Board of Directors

6 2016 AnnuAl RepoRt County Bank Corp County Bank Corp 2016 AnnuAl RepoRt 7

The full Consolidated Financial Statements and Auditor’s Report may be found at http://www.astproxyportal.com/ast/19082/. Stockholders can request a copy of the Consolidated Financial Statements to be sent via mail by contacting American Stock Transfer & Trust Company, LLC, at (888) 509-4619.

ASSeTS 2016 2015Cash and cash equivalents $ 22,029 $ 15,933

Time deposits in other financial institutions 952 1,490Available for sale investment securities 208,556 121,575Restricted investment securities 2,507 1,425Net loans 313,634 169,539Premises and equipment, net 10,067 6,493Bank owned life insurance 15,360 4,401Core deposit intangible 1,936 -Accrued interest receivable and other assets 8,738 3,340 Total assets $ 583,779 $ 324,196

lIABIlITIeS And STockholderS’ eQuITyLiabilities Deposits Interest bearing $ 397,097 $ 229,775 Non-interest bearing 123,219 55,257 Total deposits 520,316 285,032

FHLB advances 2,578 -Federal funds purchased 3,000 -Accrued interest payable and other liabilities 2,885 2,079 Total liabilities 528,779 287,111

Stockholders’ equity Common stock, $5 par value, 3,000,000 shares authorized, 1,748,592 and 1,080,946 shares issued and outstanding at December 31, 2016 and 2015, respectively 8,743 5,404 Surplus 25,992 8,634 Retained earnings 24,455 23,632 Accumulated other comprehensive loss (4,190) (585) Total stockholders’ equity 55,000 37,085

Total liabilities and stockholders’ equity $ 583,779 $ 324,196

Grand Rapids, MichiganMarch 24, 2017

We have audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheets of County Bank Corp as of December 31, 2016 and 2015 and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows for the years then ended; and in our report dated March 24, 2017, we expressed an unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived.

Stockholders and Board of DirectorsCounty Bank CorpLapeer, Michigan

crowe horwath llpIndependent Member Crowe Horwath International

Crowe Horwath LLP

county Bank corp

conSolidated Balance SheetS

December 31, 2016 and 2015(dollars in Thousands except Per share data)

2016 report oF independent auditorS on condenSed Financial inFormation

8 2016 AnnuAl RepoRt County Bank Corp County Bank Corp 2016 AnnuAl RepoRt 9

county Bank corp

conSolidated StatementS oF income

The full Consolidated Financial Statements and Auditor’s Report may be found at http://www.astproxyportal.com/ast/19082/. Stockholders can request a copy of the Consolidated Financial Statements to be sent via mail by contacting American Stock Transfer & Trust Company, LLC, at (888) 509-4619.

2016 2015Interest income Loans (including fees) $ 10,480 $ 8,488 Investment securities: Taxable 2,015 2,284 Non-taxable 1,083 539 Other 92 27 Total interest income 13,670 11,338

Interest expense on deposits and borrowings 663 587

Net interest income 13,007 10,751

Provision for loan losses (300) (600)

Net interest income after provision for loan losses 13,307 11,351

Noninterest income Service charges on deposit accounts 1,325 1,216 Bargain purchase gain from merger 1,177 - Net gain on sales or calls of investment securities 201 12 Net gains on sales of loans 278 117 Net gain on sales of other real estate owned 153 34 Earnings from bank owned life insurance 235 114 Trust income 697 717 Debit card interchange income 711 488 Other 1,031 728 Total noninterest income 5,808 3,426

Noninterest expense Salaries and employee benefits 7,196 5,574 Merger expenses 2,650 28 Occupancy and equipment 1,408 1,086 Professional fees 1,087 992 FDIC Insurance 139 161 Other 3,145 1,980 Total noninterest expense 15,625 9,821

Income before income tax expense 3,490 4,956

Income tax expense 579 1,445

Net income $ 2,911 $ 3,511

Net income per basic share of common stock $ 2.28 $ 3.25

Years ended December 31, 2016 and 2015(dollars in Thousands except Per share data)

30 yearS

2016 Mile

st

on

eslAurIe verBeke,

SENIOr ACCOuNtINg PrOCESSOr

45 YEARS

lAurA penzIen, MOrtgAgE LOAN OffICEr

kIMBerly hIll, AVP, DEErfIELD BrANCh MANAgEr

colleen SuTTon, rEtAIL uNDErwrItINg

OffICEr

30 YEARS

25 YEARS

It’s our dedicated, professional staff that ensures a superior customer experience.

“ “

Bruce J. cAdy ChAIrMAN & CEO

10 2016 AnnuAl RepoRt County Bank Corp

left to right:

holly SchulTz, CuStOMEr SErVICE

SPECIALISt

kArI rIder, BANk OPErAtIONS

SPECIALISt

gAry drAInvIlle, SVP, ChIEf truSt OffICEr

pATrIcIA kendzIerSkI, ASSIStANt MANAgEr,

YALE

kIM STAnek, LOAN OPErAtIONS

ASSIStANt

not pictured: krISTen leTke,

tELLEr, ALMONt

alan curtiS retires after 38 years

As the Vice President and Senior Lender, Alan Curtis is well known throughout the community.

Curtis began his career with Lapeer County Bank & Trust Co. in July of 1977 as an Agricultural Representative. He was appointed Assistant Cashier, then promoted to Loan Officer, Commercial Loan Officer, and most recently Vice President and Senior Lender in 2006. Alan played an important role in the success of the Commercial Loan Department at Lapeer County Bank & Trust Co.

“Throughout his career, Alan has been an outstanding community banker, focused on building up the community around him,” said Bruce Cady, Chairman & CEO. “We have been fortunate to have his expertise throughout the years. He will be missed.”

During his career, Curtis was a fixture in the community. He was an active member of the Family Literacy Center Board and the Economic Club of Lapeer. He was also a passionate supporter of 4-H programs.

In his retirement, Curtis plans to spend more time with his wife, children and grandchildren.

left to right:

cherry newlon, AVP, LOAN OPErAtIONS MANAgEr

lAurIe chATeAuverT, BANk OPErAtIONS SPECIALISt

JAneT lewIS, MOrtgAgE LOAN OffICEr

JoSeph worden, VP, OPErAtIONS & CrA OffICEr

dAnIelle chATeAuverT, AVP, MArkEtINg DIrECtOr

Al BuTler, COurIEr

20 YEARS 5 YEARS

left to right:

AMy nowAk, AttICA ASSIStANt

BrANCh MANAgEr

SylvIA Senkow, EMMEtt tELLEr

lAurIe deMAnuel, AVP, MEMPhIS BrANCh MANAgEr

deBorAh BurTon, ASSIStANt MANAgEr, EMMEtt

not pictured: chrISTA Belcher,

tELLEr, CAPAC

15 YEARS

left to right:

TherSeA hIckS, ASSIStANt MANAgEr,

DOwNtOwN IMLAY CItY

duryndA kIeFer, AVP, ArMADA BrANCh MANAgEr

not pictured: JennIFer huBBArd,

CuStOMEr SErVICE SPECIALISt

SAndrA denSMore, tELLEr, CAPAC

10 YEARS

2016 offiC

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sExECUTIVE OFFICERSBruce J. Cady, Chairman & CEO

Michael J. Burke, Jr., President

Joseph h. Black, Chief Financial Officer

Shelly M. Childers, Chief Operations Officer

robert J. funk, Chief Loan Officer

LENDING OFFICERSwalter Bargen, AVP, Business Development Officer

Peter Batistoni, SVP, Commercial Loan Manager

rick Chown, VP, Commercial & Medical Loans Officer

David hendry, VP, Commercial Loan Officer

travis Jackson, AVP, Commercial Loan Officer

Jessica McLarty, AVP, Commercial Loan Officer

Matthew Schroeder, AVP, Commercial Loan Officer

Alex Shoemaker, AVP, Commercial Loan Officer

kimberly McComb, VP, Mortgage Origination Manager

Janet Lewis, Mortgage Loan Officer

tracey McIntosh-Anderson, Mortgage Loan Officer

Laura Penzien, Mortgage Loan Officer

Julie Salsido, Mortgage Loan Officer

Mike walker, Mortgage Loan Officer

Beth A. henderson, VP, Retail Underwriting

Colleen Sutton, Retail Underwriting Officer

WEALTH MANAGEMENT GROUP OFFICERSgary Drainville, SVP, Chief Trust Officer

Adam Schlusler, JD, VP, Wealth Management Officer

tyson Schmidt, Financial Services Officer

MAIN OFFICE OFFICERSSharon Skirke, Administration Officer

Stephanie Yenna, VP, Bank Operations

Ashley winter, VP, Chief Credit Officer

Scott Badley, VP, Sr. Compliance Officer

Cindy Strich, VP, Compliance & BSA Officer

robert Lennox, Controller

Loren Schafer, VP, Human Resources Director

Cherry Newlon, AVP, Loan Operations Manager

Louise Vermillion, AVP, Loss Prevention Officer

Danielle Chateauvert, AVP, Marketing Director

Michael Bell, Network Manager

Joseph worden, VP, Operations & CRA Officer

william hartley, Special Assets Officer

BRANCH OFFICERSDebra Coe, VP, Branch Operations

tamra kleynenberg, VP, Retail Sales

Johanna Nuculovic, AVP, Almont Branch Manager

Durynda kiefer, AVP, Armada Branch Manager

Stephanie Schaefer, AVP Attica Branch Manager

Amy Brunk, AVP, Capac Branch Manager

kimberly hill, AVP, Deerfield Branch Manager

Jennifer ward, AVP, Elba Branch Manager

gail Leader, AVP, Emmett Branch Manager

LuAnn Valdez, AVP, Imlay City Branch Manager

Laurie Demanuel, AVP, Memphis Branch Manager

kristie waldorf, Metamora Branch Officer

Liz McVety, AVP, South Main Branch Manager

Denise Schreel, AVP, Yale Branch Manager

2016

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duryndA kIeFer, AVP, ArMADA BrANCh

MANAgEr

krISTIe wAldorF, MEtAMOrA BrANCh OffICEr

kristie waldorf has been a Bank employee for 17 years, starting off at Metamora as a teller on January 3, 2000.

throughout the years, kristie has held many positions at the Bank including: Customer Ser-vice Specialist, Assistant Manager at Deerfield, Metamora & South Main and Branch Manager of Metamora since 2009, becoming the Branch Officer in December of 2016.

kristie holds a general Banking diploma and a Bank Operations diploma from AIB (American Independent Bankers.)

kristie serves as the President of the hadley township Chamber of Commerce and Sec-retary of the hadley historical Society. She is also an active volunteer member within the Bank coordinating volunteers for the Salvation Army and serving on the technology Business Owners and the f.u.N. (friends understanding Needs) committees.

Durynda kiefer hired in to CSB Bank in 2006 as a part time teller at the Imlay City branch. from there, she transferred to the Armada branch in 2008 and became the head teller. In April of 2014, she was promoted to Assistant Manager at the Armada branch, then promoted to Branch Manager in October of 2016.

Durynda attended the MBA certification pro-gram for both head teller and Branch Manager Certifications. In 2018, she looks forward to attending the Perry School of Banking.

together with her family, Durynda is very active in her community. they are actively involved in Purple Stride, which raises money and aware-ness for pancreatic cancer.

She is a new member of the Armada Business Association and this summer will be starting a local chapter of Modern widows Club, a non-profit that will provide widows with support and information.

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TCOUNTY BANK CORPLakestone Bank & Trust83 West Nepessing St., Lapeer, MI 48446LAKESTONEbank.com 810.664.2977