2020 Shareholder Meeting

ABCT Holdings, Inc - Shareholder Meeting Minutes

ABCT Holdings, Inc.

Minutes

Annual Meeting of the Shareholders

February 22, 2020

Presiding: Todd Moore, Chairman

Call to Order: Chairman Moore called a meeting of the ABCT Holdings, Inc. (the “Corporation”) shareholders to order on Thursday, February 22, 2020, at 4:08PM. The meeting was held at the Alliance Bank Central Texas headquarters located at 4721 Bosque Boulevard, Waco, TX 76710.

Verification of Quorum: Chairman Moore began by verifying a quorum was present at the meeting. Secretary Hennig confirmed a quorum was present, with 1,245,489 shares represented by proxy or in person. With 2,084,239 shares outstanding, 59.76% of the voting shares were represented either in person or by proxy.

Approval of Minutes: Chairman Moore continued by presenting minutes from the Annual Meeting of the Shareholders held February 21, 2019.

After discussion, Shareholder Todd Heller made a motion to approve the minutes as presented. Upon motion made, seconded by Shareholder Jim Morton, and carried unanimously, it was

RESOLVED, that the minutes of the Annual Meeting of the Shareholders held February 21, 2019, were approved as presented.

Financial Report: President Shero presented a trend analysis of key bank performance indicators from 2017 to 2019. President Shero commented on the level of asset growing (2.94%) in 2019, which was down considerably from both 2017 and 2018. He commented that this slower growth was not unexpected and that modest growth was again expected in 2020. He further commented that growth over 15% causes increased scrutiny from the regulators. Shareholder Parks asked for additional comment on why such growth is a cause for concern. President Shero commented that while the Bank’s asset quality remained extremely strong during our growth, some banks may not have the systems in place to control rapid growth. President Shero continued his review of Appendix A by highlighting the positive trends in Net Income, Return on Assets and Substandard Assets/ Tier 1 Capital. President Shero noted the holding company debt of was increased from $1.8MM to $2.7MM in 2019 with the proceeds injected as capital into the bank. Finally, President Shero reviewed the correlation between new loan originations and the total loan portfolio.

President Shero stated at the end of 2019, the book value of ABCT Holdings, Inc stock was $12.46 compared to $11.52 (2018) and $12.65 (2017)– an 8.86% decrease from 2017 ($12.65).

President Shero continued by projecting 2020 Net Income was budgeted at $2.4MM compared to $2.1MM in 2019. Chairman Moore commented that the goal is to continue to increase Bank earnings noting that banks have been acquired at a multiple of 17x earnings. He stated that the Bank will continued to make strategic hires that make sense with a focus on long term growth.

Accomplishments in 2019 / Moving Forward in 2020: Chairman Moore highlighted some of the Bank’s major accomplishments in 2019 and strategies for 2020. Looking bank 5 years, Net Income in 2014 was $ 503M compared to $ 2.1MM in 2019. The Bank booked $ 91MM loan commitments in 2019. The Bank acquired the assets (loans) of the Farm Bureau Federal Credit Union and opened a branch of Alliance Bank Central Texas in the Texas Farm Bureau building in Waco, Texas. The Bank focused on lowering cost of funds and shed $19MM in CDs and replaced them with non-interest bearing deposits. Finally, the Bank has increased non-interest income.

New Building Discussion: President Shero discussed the pending opening of the new Alliance Bank Central Texas headquarters at 191 Archway Drive, Woodway, Texas on March 16, 2020). He provided the shareholders on the overall cost of the project ($975M land and ($4.95MM) building construction. Chairman Moore added that the Bank is expected to lease the current “annex” facility which would result in the new building increasing overall overhead by about $10K per month.

Call To Action: President Shero asked Director Scott Rogers to review 2020 Priorities and how shareholders can assist the Bank in continued growth.

Nomination of Directors: After taking questions, Chairman Moore concluded by introducing the slate of directors nominated by the current Board of the Corporation. The slate of directors for 20 includes:

Todd Moore

Eric Shero

Benjy Bauer

Steven Cates

Georgetta Duncan

Mark Minor

Brent Neuhaus

Gerald Villarrial

Sarah Roberts

Scott Rogers

Ricky Thompson

Sherman Ayres

Jeff Wooley

James Morton

After discussion, Shareholder Wayne Parks made a motion to approve the slate of directors as presented. Upon motion made, seconded by Shareholder David Martin, and carried unanimously, it was

RESOLVED, that the following persons be, and hereby are, elected to serve as members of the Board of Directors until the next annual meeting of the Board of Directors of the Corporation and until their successors are chosen and qualified or until their earlier death, resignation or removal from office: