Bank of Edmonson County

2019 ANNUAL REPORT

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Board of Directors

What’s Important to The Bank?

The Bold Beginnings in 1925

Corporate Values Statement

Our Family of Employees

• Statement of Condition

• Statement of Income

• Change in Capital Funds

A Commitment to Our Community

B A N K O F E D M O N S O N C O U N T Y • P. O. B O X 9 9 • B R O W N S V I L L E , K E N T U C K Y 4 2 2 1 0

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T A B L E O F C O N T E N T S

2019 ANNUAL REPORT

To our Customers, Stockholders, Associates, and Friends:

We are proud to report to you Bank of Edmonson County’s progress for the year 2019. Our

return on assets was 1.45 and our year-end capital ratio was 12.1.

We wish to express our appreciation to our stockholders and board of directors. It is through

their leadership and unwavering support that we have been able to continue our ambition.

Without our stockholders assurance, from both their investment and trust, success at this level

would be impossible. It is with the guidance of our board of directors we continue to serve

our communities while maintaining the traditions upon which we were founded.

We are fortunate to employ the best and brightest in south central Kentucky and are so

thankful for our Bank family. Our knowledgeable management, dedicated employees, and loyal

customers and friends have made our community bank successful for generations and we

want to extend our gratitude to each one.

Bank of Edmonson County is a home-owned and operated community bank that is still in the

business of helping our neighbors and friends. As Bank of Edmonson County continues to grow

in the coming years, our philosophy of people being our first priority will continue.

Michelle Coleman Alexander Ulm Chief Executive Officer President

Bank of Edmonson County2019 ANNUAL REPORT

PAGE 2 BANK OF EDMONSON COUNTY 2019 ANNUAL REPORT PAGE 3

L E A D E R S H I P B A N K O F E D M O N S O N C O U N T Y

Alexander UlmPRESIDENT

Jerry L. MeredithMAYOR OF BROWNSVILLE

Phyllis Woodcock MillerRETIRED

EDMONSON COUNTY SCHOOLS

Michelle ColemanCHIEF EXECUTIVE OFFICER

Jeanne Alexander PattonCHAIRMAN OF THE BOARD

Larry L. SkaggsRETIRED

KENTUCKY STATE WATER PATROL

Marcia S. LindseyRETIRED

BANK OF EDMONSON COUNTY

David HouchinRETIRED

BANK OF EDMONSON COUNTY

Board of Directors

On July 30, 2019, Bank of Edmonson County lost a previousemployee, longtime shareholder and past board member –Edward D. Houchin.

Ed became a stockholder on March 30, 1963 through a gift ofstock from his grandfather N. E. Vincent. He was named tothe board of directors in 1964 and served until 2008. He wasnamed director emeritus at this time.

Ed was married for 67 years to Betty Lindsey Houchin, whopassed in 2014. He was also preceded in death by one son,Terry. He is survived by five sons, Allen, Tommy, David,Ronnie and Ricky.

Ed was a veteran who served in World War II in the US Navy.He worked as a bookkeeper for the bank for a short period oftime before becoming an entrepreneur in several businessventures throughout Edmonson County. He had a one of kindsense of humor that always brought laughter and smiles tohis Bank family and will be greatly missed.

Bank of Edmonson County lost a longtime shareholder andpast board member – George W. Woodcock – on September24, 2019.

George became a stockholder on December 6, 1966 througha gift of stock from his father G. W. Woodcock. He wasnamed to the board of directors in 1996 and served until2010. He was named director emeritus at this time.

George was married for 40 years to Marica HudsonWoodcock and is also survived by three children Margaret,Marilynn, and George.

In addition to practicing law, he also was a veteran whoserved overseas in Korea. George served as Bank ofEdmonson County legal counsel for many years and wasalways one of the bank’s most enthusiastic supporters. Hehad a perpetually positive attitude and outlook which wasgreatly valued by his Bank family.

Bank Loses Two Notable Friends

BANK OF EDMONSON COUNTY 2019 ANNUAL REPORT PAGE 5PAGE 4

O U R H I S T O R Y

ank of Edmonson County was established on October 5, 1925. On that day the dreams of five men came to life as the doors of the bank wereopened and the people of Edmonson County were given achoice of where they conducted their banking. The planningof founders Jesse T. Alexander, his brothers Luther F.

Alexander and David W. Alexander, George W. Woodcock andN.E. (Ed) Vincent had paid off. The leadership of these menwould be pivotal in the coming years as the Great Depressionhit our nation in 1929. Although a young institution, Bank ofEdmonson County was able to keep its doors open. In 1933Bank of Edmonson County became a member of the FederalDeposit Insurance Corporation, thus reinforcing the trust ofthe Bank’s customers. As the lean years of the Depressionfrom 1929 to 1937 came to a close, Bank of EdmonsonCounty’s resources began to climb. This trend continued overthe next couple of decades and by 1954 the Bank’s assets hadreached $1 million. Growth continued and assets again dou-bled by the end of that decade.

Progress created the need for facilities

With the continued steady growth of the bank came the needfor larger facilities. In 1969, Bank of Edmonson County pur-chased the south side of the Brownsville public square andafter the State Banking Commissioner and FDIC granted per-mission, construction began on the new bank that still servesas the headquarters of our operation. The new building was atwo-story building, but only the first floor was finished andutilized at the time of completion. The new facility’s doorswere opened on June 26, 1971, and the steady growth of thebank continued at the new location. By 1977 Bank ofEdmonson County had reached the $10 million mark in assets,and as the decade came to a close, the second floor of the bankwas finished to accommodate continued successful growth.Throughout the 1980s the Bank continued to grow as cus-tomers continued to put trust in the institution. Assets grewfrom $15 million to $50 million by the end of the decade. This

B A N K O F E D M O N S O N C O U N T Y

Downtown Brownsville has changed drastically since the Bank wasfounded on October 5, 1925.

The vision of founders Jesse T. Alexander, Luther F. Alexander,David W. Alexander, George W. Woodcock and N.E. (Ed) Vincent

was revealed in the Bank’s first office in Brownsville.

The Bank’s first branch opened in Bowling Green on October 24, 2004and has experienced steady growth since its first day of business.

A Remarkable Spirit Is Evidentin the Bank’s 94th Year

growth since its first day of business. Along with market expan-sions and physical growth, customers began looking for new,cutting-edge technologies and Bank of Edmonson Countyinvested in technologies including five convenient ATMs, a 24-hour automated 1-800 number, Internet Banking and InternetBill Pay.

Expansion of facilities was again needed and in 2009 the bankcompleted construction of a new operations center on thenortheast corner of the square in Brownsville. This facility is astate of the art building that houses the Bookkeeping andLoan Operations Departments. The building also houses thebank’s computer servers and technology equipment.

growth led to the need for another expansion in 1989. The1989 expansion included the building of five new offices onthe west side of the building that would serve as the loandepartment.

A noteworthy milestone

During the 1990s the American economy experiencedtremendous growth and Bank of Edmonson County was nodifferent. By 1997 the Bank reached another great milestoneas assets surpassed the $100 million mark. The tremendousgrowth through the 90s led to the need for another physicalexpansion. Plans were made and in 2001 Bank of EdmonsonCounty completed this expansion which added eight newoffices, extra storage space, and a new conference room.Growth in Brownsville had been steady for well over half of acentury and this success led to the Bank looking for opportu-nities to better serve its customers and grow its market area.

Expansion to Bowling Green

After much thought and planning, Bank of Edmonson Countyannounced plans to build its very first branch which would belocated on the north side of Bowling Green. It was a decisionthat had been carefully studied by the board of directors andmanagement and would prove to be a good fit for theWarren County market. The doors of the branch wereopened on October 24, 2004, and it has experienced steady

The Bank purchased the south side of the Brownsville public square in1969 and built the main office, which opened June 26, 1971.

The new Operations Center opened in 2009 to prepare for the technological demands of a growing customer base.

continued on next page

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O U R H I S T O R Y

2019 ANNUAL REPORT PAGE 7

B A N K O F E D M O N S O N C O U N T Y

BANK OF EDMONSON COUNTYPAGE 6

1925Jesse, Luther and DavidAlexander, George Woodcockand Ed Vincent founded thebank on October 5.

1933Bank of Edmonson Countybecomes a member of theFDIC, instilling confidence ina struggling community.

2009A brand-new operationscenter is opened on the NEcorner of the Brownsvillesquare.

1989Five new offices are built onthe west side of the buildingto house a loan department.

2001More physical growth: eightoffices, storage and conferencespace are added.

1977The Bank reaches $10 millionin assets and finishes theupper level to accommodatethe growth.

2017The Bank celebrates thehighest earnings in its 92-year history.

2015The Bank opens a thirdbranch on Main Street inSmiths Grove.

1969The bank purchases thesouth side of the Brownsvillesquare for a main office.

1929America suffers its worstdepression to date, posingchallenges for the new bank.

1954Weathering the financialstorm, the bank reaches amilestone: $1,000,000 inassets.

1987Another milestone: thebank reaches $50 millionin assets by the end ofthe decade.

1997Phenomenal growthhelps the bank surpass$100 million in assets.

2012The Bank purchases astate-of-the-art messageboard for the main office.

2004History is made as thebank opens an office inBowling Green on Oct. 24.

1971Doors open on the newoffice on June 26.

TIMELINE FOR BANK OF EDMONSON COUNTY / SERVING SOUTH CENTRAL KENTUCKY FOR 94 YEARS ... AND COUNTING

2016The Bank adds Mobile Banking app toOnline Banking services.

Smiths Grove presents opportunity

2014 was a successful year for Bank of Edmonson County.The year began with a successful transition to new leadershipwith another record year of earnings for the bank’s share-holders and came to a close with the bank purchasing prop-erty on Main Street in Smiths Grove and applying to the FDICfor a new branch location to serve the needs of Smiths Groveand its citizens. Though plans were started in late 2014 forthe new Smiths Grove branch, 2015 would see the develop-

The Bank’s third branch opened in neighboring Smiths Grove with aribbon cutting ceremony on September 24, 2015.

ment of those plans. In early 2015 architects completeddrawings for the new office and the bidding process began.After awarding the contract to a local contractor, directors,officers, and employees of the bank were joined by commu-nity leaders, citizens and customers to break ground for thenew facility on April 23 and the project was completed with aRibbon Cutting and Grand Opening Ceremony that wasattended by over 200 on September 24. The employees atthe Smiths Grove branch opened their first accounts thatafternoon and the office has seen steady growth in bothloans and deposits since that very first day.

Innovation in technology

2016 was a year of new innovation for Bank of EdmonsonCounty. With the addition of our Mobile Banking App withRemote Deposit Capture to our Online Banking services, itshows just another way we continue to strive for customerconvenience and satisfaction.

And now, as we enter 2020 after 94 years, Bank of EdmonsonCounty remains committed to providing the citizens in ourarea with the finest customer service, competitive products,and convenient locations to conduct their business whilefocusing on strengthening and giving back to the communi-ties we serve.

BANK of EDMONSON COUNTY

IN KEEPING WITH THE BANK’S MISSION:

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We will provide superior customer service.

We will generate attractive growth and earnings for our shareholders.

We will provide adequate compensation, training and retirement benefits forour employees.

We will continue to research and provide new products and services to meetthe ongoing needs of our customers and banking communities by striving tocontinue to be a market leader with technological changes.

Our primary lending focus will be on residential and small commercial realestate lending. Our secondary focus will be retail and small to medium businessinterests in our established market area.

2019Bank records record year asassets exceed $217 million.

Corporate Values Statement

ASSETS Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Cash and Due from Banks $ 4,053,085.13 $ 4,908,639.61 $ 5,952,854.02

Loans and Discounts 150,025,631.62 159,337,398.87 154,458,714.05

U.S. Government Securities 336,990,636.61 31,989,953.60 33,492,036.94

Other Bonds and Securities 14,614,064.55 10,200,460.20 12,745,088.01

Federal Funds Sold 210,000.00 – 4,881,000.00

Accrued Interest Receivable 1,058,597.89 1,082,201.84 1,038,849.65

Banking House and Lot 4,315,669.71 4,227,262.10 4,119,805.63

Furniture and Fixtures 472,486.70 428,114.04 364,141.52

Other Assets 6,766.85 120,355.48 328,511.36

TOTAL ASSETS $211,836,939.06 $212,294,385.74 $ 217,381,001.18

LIABILITIES Capital $ 400,000.00 $ 400,000.00 $ 400,000.00

Surplus 6,300,000.00 6,300,000.00 6,300,000.00

Undivided Profits 18,866,396.69 19,187,804.28 19,571,117.21

Reserve for Securities ( 1,040,305.80) (1,136,849.82) (67,526.40)

Officers Checks 780,009.91 1,550,759.31 1,937,712.01

Accrued Interest Payable 54,677.00 78,043.41 95,353.88

Demand Deposits 68,230,010.09 67,826,540.34 64,101,299.47

Savings Deposits 14,771,898.28 16,767,462.27 17,953,401.30

Certificates of Deposit 97,971,996.65 90,629,204.97 93,314,350.48

Borrowings: FHLB 4,240,585.29 9,546,421.17 12,798,834.13

Federal Funds Purchased – 115,000.00 –

Other Liabilities 1,261,670.95 1,029,999.81 976,459.10

TOTAL STOCKHOLDER’SEQUITY AND LIABILITIES $211,836,939.06$ 212,294,385.74 $ 217,381,001.18

$ 212,294,386

2018

$ 217,381,001

2019

$ 211,836,939

2017

TO TA L AS S E T S

C O N D E N S E D S T A T E M E N T O F C O N D I T I O N

F I N A N C I A L R E P O R T

BANK OF EDMONSON COUNTYPAGE 8

O U R S T A F F

2019 ANNUAL REPORT PAGE 9

VALERIE ANTLE ......................................................COLLECTIONS OFFICERBRODY BAGSHAW .......................................TECHNOLOGY COORDINATORDONNA BAGSHAW .SVP/DEPOSIT COMPLIANCE & OPERATIONS OFFICERWHITNEY BARTH...................................................................BOOKKEEPERREBECCA BASHAM....................................MORTGAGE LOAN PROCESSORDANIEL BOLTON..................................................................LOAN OFFICERLISA BOOTH ........................................................AVP/BRANCH MANAGERJENA BROOKS..................................................................................TELLERSHAINA BROOKS ...................................................................BOOKKEEPERJOYCE BROWN .........................................PART-TIME TELLER (SEASONAL)EMMA BULLOCK..........................................PART-TIME FLOATING TELLERMARGARET CAMPBELL ...................................................................TELLERBEATRICE CASSADY................................................................VP/AUDITORJO ANN CASSADY ...........................................SVP/SENIOR LOAN OFFICER DORIS CAST ...........................................................................CRA OFFICERRENEE CHILDRESS...............................................AVP/BRANCH MANAGERMICHELLE COLEMAN .......................................CHIEF EXECUTIVE OFFICERMELISSA COLLINS ............................................................LOAN REVIEWERTIFFANY COOTS ...............................................................................TELLERLISA COWLES............................................................MARKETING OFFICERSANDRA COWLES............................................CONSUMER LOAN OFFICERDAWN DECKER ............................................PART-TIME FLOATING TELLERLATISHA ELMORE ............................................................................TELLERHANNA GLASS .............................................PART-TIME FLOATING TELLERLATRENIA GRIMES .....................................LOAN OPERATIONS ASSISTANTMARY BETH HAYES........................CUSTOMER SERVICE REPRESENTATIVEERICA KESSINGER......................................MORTGAGE LOAN PROCESSOR

2 0 1 9 S T A F F L I S T

LOU ANN LANGDON ...........................AVP/TELLER OPERATIONS OFFICERLAURA LINDSEY...............................................CONSUMER LOAN OFFICERPEYTON MARTIN.............................................................................TELLERMANDEE MCDOUGLE ..............................ASSISTANT BRANCH MANAGERALANA MCGUIRE.................................................................ACCOUNTANTMICHAEL MEREDITH...........................................................LOAN OFFICERRHONDA MEREDITH ...................................HUMAN RESOURCES OFFICERKANDI MINTON............................................LOAN COMPLIANCE OFFICERTRICIA PRIDDY...........................................OPERATIONS CENTER FLOATERROBIN RENFRO ...........................................................AVP/LOAN OFFICERTERESA RICH................................BSA/DEPOSIT COMPLIANCE ASSISTANTKEYLEE SALING ............................................PART-TIME FLOATING TELLERLESLIE SALING ...........................................LOAN OPERATIONS ASSISTANTLINDA SALING ...........................................PART TIME LOAN OPERATIONSMEGAN SALING.............................CUSTOMER SERVICE REPRESENTATIVEANGELA SALINGS ............................................................................TELLERHANNAH SANDERS .........................................................LOAN ASSISTANTMARIA SPAINHOWARD......................................PART-TIME BOOKKEEPEREMILY THOMPSON ..........................................................................TELLERMICHAEL THOMPSON....................................SVP/SENIOR LOAN OFFICERJESSICA TURNER.....................................................EXECUTIVE ASSISTANTALEXANDER ULM......................................................................PRESIDENTMELINDA VANMETER...............................DEPOSIT OPERATIONS OFFICERMELISSA VINCENT.............................................NEW ACCOUNTS OFFICERMELISSA WHOBREY.......................................LOAN OPERATIONS OFFICERMICHELLE WHOBREY ................................LOAN OPERATIONS ASSISTANTJUDY WILSON..................................................................................TELLER

2019 Staff Christmas Party

BANK OF EDMONSON COUNTYPAGE 10

CAPITAL CAPITAL UNDIVIDED STOCK SURPLUS PROFITSBalance Dec. 31, 2018 $ 400,000.00 $ 6,300,000.00 $ 19,187,804.28

Net Income for the year 2019 3,142,364.22

Cash Dividends

(March, June, September, December = $23.00/share) (3,000,000.00)

Transfer to Surplus – –

Balance Dec. 31, 2019 $ 400,000.00 $ 6,300,000.00 $ 19,570,168.50

Capital Funds

Capital stock authorized shares

$10.00 par value – 40,000 shares

issued and outstanding $ 400,000.00

Capital Surplus 6,300,000.00

Undivided Profits 19,570,168.50

Total Capital Funds $ 26,270,168.50

BOOK VALUE PER SHARE

EDMONSON BANCSHARES, INC.

DECEMBER 31, 2019

$26,270,168.50 / 120,000 = $218.91

Book Value 12/31/18

$25,887,804.28 / 120,000 = $215.73

Book Value 12/31/17

$25,566,396.69 / 120,000 = $213.05

Book Value 12/31/16

$24,926,732.48 / 120,000 = $207.72

S T A T E M E N T O F C H A N G E I N C A P I T A L F U N D S

F I N A N C I A L R E P O R T

2019 ANNUAL REPORT

OPERATING INCOME 2017 2018 2019 Interest on loans, late charges & fees $ 8,407,168.22 $ 8,738,508.83 $ 9,397,787.58

Interest on U.S. Govt Bonds, Agencies 656,144.33 574,227.08 548,427.02

Interest on Municipal Bonds 300,448.55 248,365.11 329,610.14

Interest on Federal Funds 7,776.53 18,490.42 93,799.69

Interest on FHLB 105,699.61 128,230.70 115,578.26

Other Income; service charges,

club fees, credit life, lock boxes 960,045.26 983,142.81 964,981.98

TOTAL INCOME $ 10,447,282.50 $ 10,690,964.95 $ 11,450,184.67

OPERATING EXPENSESalaries, directors’ fees, committee fees $ 2,203,328.18 $ 2,317,648.93 $ 2,340,092.15

Employee benefits

Profit sharing plan, insurance, etc. 603,857.39 661,862.01 751,766.12

Interest – CDs, IRAs, Passbook & DDA 1,198,830.40 1,423,053.88 1,861,372.96

Interest on FHLB advances 111,296.59 143,766.00 406,238.84

Interest on Federal Funds 6,662.88 31,093.76 1,470.52

Occupancy

Taxes, repairs, utilities & depreciation 800,174.14 805,456.07 806,718.42

Loan loss provision 80,000.00 113,000.00 475,000.00

Legal, examinations & audit 253,923.88 260,763.52 238,056.14

FDIC insurance 67,022.02 62,167.17 28,683.61

Estimated Federal Income Tax – – –

Data processing 724,932.52 772,524.45 739,561.57

Other operating expense; advertising,

supplies, insurance, telephone, travel,

seminars, postage, equipment service 877,590.29 778,221.57 658,860.12

TOTAL EXPENSES $ 6,927,618.29 $ 7,369,557.36 $ 8,307,820.45

NET INCOME $ 3,519,664.21 $ 3,321,407.59 $ 3,142,364.22

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S T A T E M E N T O F I N C O M E

F I N A N C I A L R E P O R T

2019 ANNUAL REPORT

Alzheimer's Association

American Cancer Society Relay for Life

Barren River Area Safe Space

Bowling Green Area Chamber of Commerce

Briarwood Elementary Dollars and Cents Program

CHC Hospitality House Sponsor

ECHS Veterans Day Program

ECMS Veterans Day Patriot Pen Essay Contest

Edmonson County Anti-Drug Coalition

Edmonson County Chamber of Commerce

Edmonson County Community Education Council

Edmonson County High School Career Day

Edmonson County Lions Club

Edmonson County Lions Club Christmas Parade

Edmonson County Lions Club Fair Day Parade

Edmonson County Parks and Recreation Freedom Fest

Edmonson County Saddle Club Spring Horse Show

Edmonson County Schools Back to School Bash

Edmonson County Schools Sports Booster Clubs

Edmonson County Senior Pantry

Edmonson County Tourism Board

Feeding America Edmonson County Backpack Program

Friends of Nolin Lake

Friends of the Lost River, Inc.

Governor's Scholars Program

Junior Achievement

KBA Banking Schools

Kentucky State Gospel Singing Convention

Kids On The Block

Kyrock Elementary School Career Day

Leadership Edmonson County

Lifeskills, Inc. Board of Directors

National Child Safety Council

Newspaper in Education

North Warren Elementary School Community Day

PEP (Preserving Edmonson Pride)

Reality Store (ECMS)

S.T.O.P. (Students Targeting Outside Pressures)

Santa's Helping Hands

SKyPac

Smiths Grove Lions Club Car Show

South Central Kentucky Kids on the Block Inc.

South Edmonson Elementary School Leadership Night

Teach Children to Save

Warren East Schools Sports Booster Clubs

Washington Meredith Lodge Car Show

You're Not a Kid Anymore (ECHS)

Youth Service Center Advisory Board

BANK OF EDMONSON COUNTYPAGE 12

B A N K O F E D M O N S O N C O U N T YC O M M U N I T Y I N V O L V E M E N T

The entire bank family, including our main office pictured here, got behind Child Abuse Prevention Day.

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CHARITABLE CONTRIBUTIONSAND

COMMUNITY ACTIVITIES

Mike Thompson visited Bristow Elementary School in support of Junior AchievementEdmonson County MS Stop Program: Valerie Antle, Laura Lindsey, Mandee McDouble, Latisha Elmore

Our Smiths Grove branch helped celebrate Smiths Grove Days

The bank helped sponsor and promote the Edmonson County Veterans Essay event.

Robin Renfro, Mandee McDougle, and Katlyn Bullock at the Edmonson County MS Reality Store

Michelle Coleman and Alex Ulm visited the South Edmonson Elementary School Career Fair.Warren East HS Career Day: Daniel Bolton and Laura Lindsey Vets Breakfast: JoAnn Cassady, Melissa Vincent, Megan Saling Back to School Bash: Lisa Cowles, Emily Whobrey, Sandra Cowles

Bank of Edmonson CountyMEMBER FDIC / EQUAL HOUSING LENDER

109 North Main StreetBrownsville, Kentucky 42210

(270) 597-2175

6780 Louisville RoadBowling Green, Kentucky 42101

(270) 793-0033

156 South Main StreetSmiths Grove, Kentucky 42171

(270) 563-0001