Common use of Independent Auditor’s Report Clause in Contracts

Independent Auditor’s Report. To the Board of Directors Literacy Volunteers of Fort Bend County, Inc. Fort Bend County, Texas We have audited the accompanying financial statements of Literacy Volunteers of Fort Bend County, Inc. (a Texas nonprofit corporation) which comprise the statements of financial position as of June 30, 2021 and 2020, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Literacy Volunteers of Fort Bend County, Inc. as of June 30, 2021 and 2020 and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Sugar Land, Texas November 22, 2021 (This Page Intentionally Left Blank) FINANCIAL STATEMENTS (This Page Intentionally Left Blank)

Independent Auditor’s Report. To the Board of Directors Literacy Volunteers of Fort Bend CountyFirst State Bancorp, Inc. Fort Bend County, Texas and Subsidiary: Report on the Financial Statements We have audited the accompanying consolidated financial statements of Literacy Volunteers of Fort Bend CountyFirst State Bancorp, Inc. (a Texas nonprofit corporation) and Subsidiary which comprise the statements of financial position consolidated balance sheets as of June 30December 31, 2021 2015 and 20202014, and the related consolidated statements of activitiescomprehensive income, functional expensesshareholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our auditaudits. We conducted our audit audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit audits to obtain reasonable assurance about whether the financial statements are free from of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose purposes of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Literacy Volunteers of Fort Bend CountyFirst State Bancorp, Inc. and Subsidiary as of June 30December 31, 2021 2015 and 2020 2014, and the changes in results of its net assets operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Sugar LandXxxxx, Texas November 22Xxxxxxxx, 2021 Xxxxxxx & Co. Cincinnati, Ohio February 11, 0000 xxx xxxx xxxxxx xxxxxx, xxx. 0000 xxxxxxxxxx, xx 00000 xxx.xxxxx.xxx p. 513.241.3111 f. 513.241.1212 cincinnati | cleveland | columbus | miami valley | northern kentucky | springfield | toledo Consolidated Balance Sheets December 31, 2015 and 2014 2015 2014 Assets Cash and due from banks: Cash and cash items $ 1,702,352 2,194,070 Due from banks 17,226,295 4,981,968 Federal funds sold 604,000 81,790 19,532,647 7,257,828 Securities available for sale 113,806,454 98,183,532 Federal Home Loan Bank of Cincinnati stock, at cost 556,900 556,900 Loans, net 220,450,942 205,838,655 Loans held for sale 112,000 478,000 Accrued interest receivable 1,482,049 1,428,118 Premises and equipment, net 6,945,328 5,603,141 Other real estate owned 389,025 108,900 Bank owned life insurance 3,194,458 3,121,097 Intangible assets, net 1,019,742 1,519,624 Xxxxxxxx, net 439,619 492,907 Other assets 1,893,342 1,935,142 Total assets $ 369,822,506 326,523,844 Liabilities and Shareholders' Equity Deposits: Demand $ 42,793,849 36,137,181 Savings and interest checking 168,131,335 139,887,165 Time deposits 117,345,101 112,358,756 Total 328,270,285 288,383,102 Repurchase agreements 1,054,708 560,621 Federal Home Loan Bank advances 12,341 30,060 Accrued interest payable 144,394 124,627 Accrued taxes and other liabilities 1,509,175 1,413,287 Total liabilities 330,990,903 290,511,697 Shareholders' equity: Capital stock, no par value, 2,000,000 shares authorized at December 31, 2015 and 2014, respectively, 792,000 issued and outstanding at December 31, 2015 and 2014, respectively 5,178,533 5,178,533 Additional paid in capital 1,800,000 1,800,000 Retained earnings 31,206,989 28,134,762 Accumulated other comprehensive income 646,081 898,852 Total shareholders' equity 38,831,603 36,012,147 Total liabilities and shareholders' equity $ 369,822,506 326,523,844 2015 2014 Interest income: Interest and fees on loans $ 10,645,621 9,899,257 Interest on investment securities: Taxable 813,009 978,702 Exempt from income taxes 1,638,322 1,425,255 Interest on federal funds sold and deposits in banks 36,927 27,910 13,133,879 12,331,124 Interest expense: Savings and interest checking 247,280 192,619 Other time deposits 1,340,699 1,350,106 Federal funds purchased and FHLB advances 3,586 4,182 1,591,565 1,546,907 Net interest income 11,542,314 10,784,217 Provision for loan losses 338,005 812,064 Net interest income after provision for loan losses 11,204,309 9,972,153 Other income: Net gain on sale of investments 713,874 1,109,891 Net gain on sale of loans and other assets 155,194 79,527 Service charges on deposit accounts 1,023,801 1,066,917 Other service charges and fees 1,139,628 1,037,989 3,032,497 3,294,324 Other expenses: Salaries, directors' fees and employee benefits 4,865,050 4,433,713 Equipment expenses 736,128 763,555 Supplies and postage expenses 210,098 230,186 Taxes other than federal income taxes 299,921 292,205 Occupancy expenses 483,889 472,800 FDIC insurance premiums and assessments 177,000 158,900 Professional fees 236,427 243,324 Telephone and data expenses 156,257 139,635 Marketing expenses 243,591 265,806 ATM expenses 372,219 308,640 Amortization of intangibles 528,726 432,665 Other operating expenses 859,310 817,826 9,168,616 8,559,255 Income before federal income taxes 5,068,190 4,707,222 Federal income taxes 1,140,603 1,095,004 Net income 3,927,587 3,612,218 Net income per share of common stock $ 4.96 4.93 2015 2014 Net income $ 3,927,587 3,612,218 Other comprehensive income (This Page Intentionally Left Blankloss): Unrealized holding gains (losses) FINANCIAL STATEMENTS during the period on securities available for sale, net of deferred taxes of $246,135 and $106,057 (This Page Intentionally Left Blank)723,928) 311,931 Reclassification adjustment for gains included in net income on securities available for sale, net of deferred taxes of $242,717 and $377,363 471,157 732,528 Comprehensive income $ 3,674,816 4,656,677 Balance, December 31, 2013 Net income Issuance of common stock Unrealized holding gains during the period on securities available for sale, net of deferred taxes of $106,057 Reclassification adjustment for gains included in net income on securities available for sale, net of tax expense of $377,363 Purchased 2,312 shares of treasury stock Proceeds from sale of 2,312 shares of treasury stock Cash dividends declared ($1.00 per share) Balance, December 31, 2014 Net income Issuance of common stock Unrealized holding gains during the period on securities available for sale, net of deferred taxes of $246,135 Reclassification adjustment for gains included in net income on securities available for sale, net of tax expense of $242,717 Purchased 1,302 shares of treasury stock Proceeds from sale of 1,302 shares of treasury stock Cash dividends declared ($1.08 per share) Balance, December 31, 2015 First State Bancorp, Inc. and Subsidiary Consolidated Statements of Shareholders' Equity Years Ended December 31, 2015 and 2014 Capital Stock Additional Paid In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Total $ 1,800,000 1,800,000 - 25,260,544 (145,607) 28,714,937 - - - 3,612,218 - 3,612,218 3,378,533 - - - - 3,378,533 - - - - 311,931 311,931 - - - - 732,528 732,528 - - (208,080) - - (208,080) - - 208,080 - - 208,080 - - - (738,000) - (738,000) 5,178,533 1,800,000 - 28,134,762 898,852 36,012,147 - - - 3,927,587 - 3,927,587 - - - - - - - - - - (723,928) (723,928) - - - - 471,157 471,157 - - (65,300) - - (65,300) - - 65,300 - - 65,300 - - - (855,360) - (855,360) $ 5,178,533 1,800,000 - 31,206,989 646,081 38,831,603 See accompanying notes to the consolidated financial statements Consolidated Statements of Cash Flows Years Ended December 31, 2015 and 2014 2015 2014 Operating activities: Net income $ 3,927,587 3,612,218 Adjustments to reconcile net income to net cash provided by operating activities: Net amortization of premiums and discounts on securities 1,579,341 1,273,795 Gain on sale of investments and other assets (714,301) (1,059,837) Change in loans held for sale 366,000 (236,800) Gain on sale of mortgage loans (154,767) (129,581) Proceeds from sale of mortgage loans 9,319,172 4,108,331 Loans disbursed for sale in the secondary market (9,473,939) (4,237,912) Provision for loan losses 338,005 812,064 Depreciation expense 500,597 426,992 Earnings on bank owned life insurance (73,361) (76,691) Amortization of intangible assets, goodwill and other assets 624,733 620,983 Deferred federal income tax provision (benefit) 150,200 (94,100) Changes in assets and liabilities: Accrued interest receivable (53,931) (226,708) Other assets (179,963) 34,670 Accrued interest payable 19,767 34,278 Accrued taxes and other liabilities 227,208 549,879 Net cash provided by operating activities 6,402,348 5,411,581 Investing activities: Repayment of mortgage-backed securities 13,150,235 6,434,075 Proceeds from sale, call and maturities of securities available for sale 29,080,155 31,515,569 Purchases of securities available for sale (59,102,870) (60,728,672) Purchase of FHLB stock - (24,500) Net increase in loans (15,054,983) (35,638,379) Proceeds from sale of other real estate owned 134,775 210,030 Capital expenditures (1,843,032) (845,690) Intangible assets obtained in branch acquisition - (1,109,795) Net cash used by investing activities (33,635,720) (60,187,362) Financing activities: Net increase in deposits 39,887,183 52,335,662 Net change in repurchase agreements 494,087 (320,956) Net repayments of FHLB advances (17,719) (18,703) Dividends paid (855,360) (738,000) Net proceeds from issuance of capital stock - 3,378,533 Purchase of treasury stock (65,300) (208,080) Proceeds from sale of treasury stock 65,300 208,080 Net cash provided by financing activities 39,508,191 54,636,536 Decrease in cash and due from banks 12,274,819 (139,245) Cash and due from banks, beginning of year 7,257,828 7,397,073 Cash and due from banks, end of year $ 19,532,647 7,257,828 Supplemental disclosures of cash flow information: Non-cash change in unrealized (gain) loss on securities $ (384,091) 1,583,476 Real estate owned acquired through foreclosure $ 414,225 295,645 Xxxx paid during the year for: Federal income taxes $ 931,033 860,041 Interest $ 1,571,798 1,512,629 See accompanying notes to the consolidated financial statements

Independent Auditor’s Report. To the Board of Directors Literacy Volunteers of Fort Bend CountyProgress Financial Corporation Huntsville, Inc. Fort Bend County, Texas Alabama We have audited the accompanying consolidated financial statements of Literacy Volunteers of Fort Bend CountyProgress Financial Corporation and Subsidiary, Inc. (a Texas nonprofit corporation) which comprise the statements of financial position consolidated balance sheets as of June 30December 31, 2021 2016 and 20202015, and the related consolidated statements of activitiesincome, functional expensescomprehensive income, stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our auditaudits. We conducted our audit audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit audits to obtain reasonable assurance about whether the consolidated financial statements are free from of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Literacy Volunteers of Fort Bend County, Inc. Progress Financial Corporation and Subsidiary as of June 30December 31, 2021 2016 and 2020 2015, and the changes in its net assets results of their operations and its their cash flows for the years then ended ended, in accordance with accounting principles generally accepted in the United States of America. Sugar LandBirmingham, Texas November Alabama March 8, 2017 PROGRESS FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (Dollars in thousands, except per share amounts) Assets Cash and due from banks $ 20,311 $ 12,256 Interest-bearing deposits in banks 1,066 2,768 Federal funds sold 49,959 9,371 Cash and cash equivalents 71,336 24,395 Securities available for sale 73,699 81,307 Restricted equity securities 1,422 1,585 Loans held for sale 6,002 7,692 Loans 543,958 490,052 Less allowance for loan losses 4,432 4,535 Loans, net 539,526 485,517 Premises and equipment 5,337 5,687 Bank owned life insurance 16,554 15,623 Foreclosed assets 9 4,449 Other assets 15,569 9,002 Total assets $ 729,454 $ 635,257 Liabilities and Stockholders' Equity Liabilities: Deposits Noninterest-bearing $ 82,849 $ 76,533 Interest-bearing 540,369 463,591 Total deposits 623,218 540,124 Repurchase agreements 5,047 5,432 Other borrowings 20,000 25,000 Other liabilities 1,499 1,601 Total liabilities 649,764 572,157 Commitments and contingencies Stockholders' equity: Common stock, $1 par value, 10,000,000 shares authorized; 7,696,969 and 6,666,305 shares issued; 7,567,319 and 7,697 6,666 6,532,055 shares outstanding, respectively Capital surplus 58,044 46,797 Retained earnings 16,684 11,172 Accumulated other comprehensive income (loss) (1,114) 143 Treasury stock, at cost (1,621) (1,678) Total stockholders' equity 79,690 63,100 Total liabilities and stockholders' equity $ 729,454 $ 635,257 See Notes to Consolidated Financial Statements. PROGRESS FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2016 AND 2015 (Dollars in thousands, except per share amounts) Interest income: Loans, including fees $ 22,334 $ 19,575 Taxable securities 734 789 Nontaxable securities 914 884 Other interest income 231 124 Total interest income 24,213 21,372 Interest expense: Deposits 3,357 3,148 Other borrowings and repurchase agreements 208 164 Total interest expense 3,565 3,312 Net interest income 20,648 18,060 Provision for loan losses 100 255 Net interest income after provision for loan losses 20,548 17,805 Other income: Service charges on deposit accounts 297 386 Mortgage division income 2,396 2,175 Investment and insurance services 3,113 3,212 Bank owned life insurance 431 428 Net gain on sale of securities available for sale 226 129 Other operating income 377 353 Total other income 6,840 6,683 Other expenses: Salaries and employee benefits 12,850 12,129 Equipment and occupancy expenses 2,100 2,045 Foreclosed asset losses and expenses 516 350 Other operating expenses 3,743 3,432 Total other expenses 19,209 17,956 Income before income tax expense 8,179 6,532 Income tax expense 2,667 2,055 Net income $ 5,512 $ 4,477 Basic earnings per share $ 0.83 $ 0.69 Diluted earnings per share $ 0.77 $ 0.65 See Notes to Consolidated Financial Statements. 2016 2015 PROGRESS FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2016 AND 2015 (Dollars in thousands, except per share amounts) Net income $ 5,512 $ 4,477 Other comprehensive income (loss): Unrealized holding gains (losses) on securities available for sale arising during the period, net of tax (benefit) of ($685) and $244, respectively (1,117) 366 Reclassification adjustment for gains realized in net income, net of tax of $86 and $65, respectively (140) (63) Other comprehensive income (loss) (1,257) 303 Comprehensive income $ 4,255 $ 4,780 See Notes to Consolidated Financial Statements. PROGRESS FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2016 AND 2015 (Dollars in thousands, except per share amounts) Shares Par Value Shares Cost Balance, December 31, 2014 6,656,455 $ 6,657 $ 46,412 $ 6,695 $ (160) 122,890 $ (1,536) $ 58,068 Net income - - - 4,477 - - - 4,477 Exercise of stock options 9,850 9 87 - - - - 96 Stock-based compensation - - 298 - - - - 298 Purchase of treasury stock - - - - - 11,360 (142) (142) Other comprehensive income - - - - 303 - - 303 Balance, December 31, 2015 6,666,305 6,666 46,797 11,172 143 134,250 (1,678) 63,100 Net income - - - 5,512 - - - 5,512 Exercise of stock options and warrants 412,835 413 2,358 - - - - 2,771 Issuance of common stock 617,829 618 8,619 9,237 Stock-based compensation - - 258 - - - - 258 Sale of treasury stock - - 12 - - (4,600) 57 69 Other comprehensive loss - - - - (1,257) - - (1,257) Balance, December 31, 2016 7,696,969 $ 7,697 $ 58,044 $ 16,684 $ (1,114) 129,650 $ (1,621) $ 79,690 See Notes to Consolidated Financial Statements. Common Stock Retained Earnings Other Comprehensive Income (Loss) Total Stockholders' Accumulated Equity Capital Surplus PROGRESS FINANCIAL CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2016 AND 2015 (Dollars in thousands, except per share amounts) OPERATING ACTIVITIES Net income $ 5,512 $ 4,477 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and software amortization 531 536 Accretion and amortization on securities 903 842 Provision for loan losses 100 255 Amortization of tax credit investments 66 - Deferred income taxes 559 (31) Gain on sale of securities available for sale, net (226) (129) (Gain) loss on sale of foreclosed assets 52 (14) Write-down of foreclosed assets 417 298 Stock-based compensation 258 298 Net decrease in loans held for sale 1,690 1,856 Increase in interest receivable (63) (141) Increase (decrease) in interest payable 30 (42) Income from bank owned life insurance (431) (428) Decrease in advance compensation agreements 319 313 Net other operating activities (22) 171 Net cash provided by operating activities 9,695 8,261 INVESTING ACTIVITIES Purchase of securities available for sale (88,138) (116,487) Proceeds from sales of securities available for sale 37,555 38,247 Proceeds from maturities and calls of securities available for sale 55,486 91,120 Purchase of bank owned life insurance (500) - Net redemptions (purchases) of restricted equity securities 163 (433) Net increase in loans (54,525) (65,514) Proceeds from sale of foreclosed assets 3,029 453 Purchase of tax credit investments (5,437) (1,521) Purchase of premises, 2021 equipment and software (This Page Intentionally Left Blank173) FINANCIAL STATEMENTS (This Page Intentionally Left Blank)393) Net cash used in investing activities (52,540) (54,528) FINANCING ACTIVITIES Net increase in deposits 83,094 41,820 Decrease in repurchase agreements (385) (1,553) Advances from other borrowings 10,000 25,000 Repayment of other borrowings (15,000) (15,000) Proceeds from the exercise of stock options and warrants 2,771 96 Proceeds from common stock offering 9,237 - Sale (purchase) of treasury stock 69 (142) Net cash provided by financing activities 89,786 50,221 Net increase in cash and cash equivalents 46,941 3,954 Cash and cash equivalents at beginning of year 24,395 20,441 Cash and cash equivalents at end of year $ 71,336 $ 24,395 SUPPLEMENTAL DISCLOSURE Cash paid during the year for: Interest $ 3,535 $ 3,354 Income taxes $ 1,939 $ 1,992 NONCASH TRANSACTIONS Transfer of loans into foreclosed assets $ 416 $ 71 Receivable from sale of foreclosed assets $ 1,358 $ - See Notes to Consolidated Financial Statements.

Independent Auditor’s Report. To the Board of Directors Literacy Volunteers of Fort Bend CountyFirst State Bancorp, Inc. Fort Bend County, Texas and Subsidiary: Report on the Financial Statements We have audited the accompanying consolidated financial statements of Literacy Volunteers of Fort Bend CountyFirst State Bancorp, Inc. (a Texas nonprofit corporation) and Subsidiary which comprise the statements of financial position consolidated balance sheets as of June 30December 31, 2021 2015 and 20202014, and the related consolidated statements of activitiescomprehensive income, functional expensesshareholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our auditaudits. We conducted our audit audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit audits to obtain reasonable assurance about whether the financial statements are free from of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose purposes of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Literacy Volunteers of Fort Bend CountyFirst State Bancorp, Inc. and Subsidiary as of June 30December 31, 2021 2015 and 2020 2014, and the changes in results of its net assets operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Sugar LandClark, Texas November 22Schaefer, 2021 Xxxxxxx & Co. Cincinnati, Ohio February 11, 0000 xxx xxxx xxxxxx xxxxxx, xxx. 0000 xxxxxxxxxx, xx 00000 xxx.xxxxx.xxx p. 513.241.3111 f. 513.241.1212 cincinnati | cleveland | columbus | miami valley | northern kentucky | springfield | toledo Consolidated Balance Sheets December 31, 2015 and 2014 2015 2014 Assets Cash and due from banks: Cash and cash items $ 1,702,352 2,194,070 Due from banks 17,226,295 4,981,968 Federal funds sold 604,000 81,790 19,532,647 7,257,828 Securities available for sale 113,806,454 98,183,532 Federal Home Loan Bank of Cincinnati stock, at cost 556,900 556,900 Loans, net 220,450,942 205,838,655 Loans held for sale 112,000 478,000 Accrued interest receivable 1,482,049 1,428,118 Premises and equipment, net 6,945,328 5,603,141 Other real estate owned 389,025 108,900 Bank owned life insurance 3,194,458 3,121,097 Intangible assets, net 1,019,742 1,519,624 Goodwill, net 439,619 492,907 Other assets 1,893,342 1,935,142 Total assets $ 369,822,506 326,523,844 Liabilities and Shareholders' Equity Deposits: Demand $ 42,793,849 36,137,181 Savings and interest checking 168,131,335 139,887,165 Time deposits 117,345,101 112,358,756 Total 328,270,285 288,383,102 Repurchase agreements 1,054,708 560,621 Federal Home Loan Bank advances 12,341 30,060 Accrued interest payable 144,394 124,627 Accrued taxes and other liabilities 1,509,175 1,413,287 Total liabilities 330,990,903 290,511,697 Shareholders' equity: Capital stock, no par value, 2,000,000 shares authorized at December 31, 2015 and 2014, respectively, 792,000 issued and outstanding at December 31, 2015 and 2014, respectively 5,178,533 5,178,533 Additional paid in capital 1,800,000 1,800,000 Retained earnings 31,206,989 28,134,762 Accumulated other comprehensive income 646,081 898,852 Total shareholders' equity 38,831,603 36,012,147 Total liabilities and shareholders' equity $ 369,822,506 326,523,844 Interest income: 2015 2014 Interest and fees on loans Interest on investment securities: Taxable $ 10,645,621 813,009 9,899,257 978,702 Exempt from income taxes 1,638,322 1,425,255 Interest on federal funds sold and deposits in banks 36,927 27,910 13,133,879 12,331,124 Interest expense: Savings and interest checking 247,280 192,619 Other time deposits 1,340,699 1,350,106 Federal funds purchased and FHLB advances 3,586 4,182 1,591,565 1,546,907 Net interest income 11,542,314 10,784,217 Provision for loan losses 338,005 812,064 Net interest income after provision for loan losses 11,204,309 9,972,153 Other income: Net gain on sale of investments 713,874 1,109,891 Net gain on sale of loans and other assets 155,194 79,527 Service charges on deposit accounts 1,023,801 1,066,917 Other service charges and fees 1,139,628 1,037,989 3,032,497 3,294,324 Other expenses: Salaries, directors' fees and employee benefits 4,865,050 4,433,713 Equipment expenses 736,128 763,555 Supplies and postage expenses 210,098 230,186 Taxes other than federal income taxes 299,921 292,205 Occupancy expenses 483,889 472,800 FDIC insurance premiums and assessments 177,000 158,900 Professional fees 236,427 243,324 Telephone and data expenses 156,257 139,635 Marketing expenses 243,591 265,806 ATM expenses 372,219 308,640 Amortization of intangibles 528,726 432,665 Other operating expenses 859,310 817,826 9,168,616 8,559,255 Income before federal income taxes 5,068,190 4,707,222 Federal income taxes 1,140,603 1,095,004 Net income 3,927,587 3,612,218 Net income per share of common stock $ 4.96 4.93 2015 2014 Net income $ 3,927,587 3,612,218 Other comprehensive income (This Page Intentionally Left Blankloss): Unrealized holding gains (losses) FINANCIAL STATEMENTS during the period on securities available for sale, net of deferred taxes of $246,135 and $106,057 (This Page Intentionally Left Blank)723,928) 311,931 Reclassification adjustment for gains included in net income on securities available for sale, net of deferred taxes of $242,717 and $377,363 471,157 732,528 Comprehensive income $ 3,674,816 4,656,677 Balance, December 31, 2013 Net income Issuance of common stock Unrealized holding gains during the period on securities available for sale, net of deferred taxes of $106,057 Reclassification adjustment for gains included in net income on securities available for sale, net of tax expense of $377,363 Purchased 2,312 shares of treasury stock Proceeds from sale of 2,312 shares of treasury stock Cash dividends declared ($1.00 per share) Balance, December 31, 2014 Net income Issuance of common stock Unrealized holding gains during the period on securities available for sale, net of deferred taxes of $246,135 Reclassification adjustment for gains included in net income on securities available for sale, net of tax expense of $242,717 Purchased 1,302 shares of treasury stock Proceeds from sale of 1,302 shares of treasury stock Cash dividends declared ($1.08 per share) Balance, December 31, 2015 First State Bancorp, Inc. and Subsidiary Consolidated Statements of Shareholders' Equity Years Ended December 31, 2015 and 2014 Capital Stock Additional Paid In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Total $ 1,800,000 1,800,000 - 25,260,544 (145,607) 28,714,937 - - - 3,612,218 - 3,612,218 3,378,533 - - - - 3,378,533 - - - - 311,931 311,931 - - - - 732,528 732,528 - - (208,080) - - (208,080) - - 208,080 - - 208,080 - - - (738,000) - (738,000) 5,178,533 1,800,000 - 28,134,762 898,852 36,012,147 - - - 3,927,587 - 3,927,587 - - - - - - - - - - (723,928) (723,928) - - - - 471,157 471,157 - - (65,300) - - (65,300) - - 65,300 - - 65,300 - - - (855,360) - (855,360) $ 5,178,533 1,800,000 - 31,206,989 646,081 38,831,603 See accompanying notes to the consolidated financial statements Consolidated Statements of Cash Flows Years Ended December 31, 2015 and 2014 Operating activities: 2015 2014 Net income $ 3,927,587 3,612,218 Adjustments to reconcile net income to net cash provided by operating activities: Net amortization of premiums and discounts on securities 1,579,341 1,273,795 Gain on sale of investments and other assets (714,301) (1,059,837) Change in loans held for sale 366,000 (236,800) Gain on sale of mortgage loans (154,767) (129,581) Proceeds from sale of mortgage loans 9,319,172 4,108,331 Loans disbursed for sale in the secondary market (9,473,939) (4,237,912) Provision for loan losses 338,005 812,064 Depreciation expense 500,597 426,992 Earnings on bank owned life insurance (73,361) (76,691) Amortization of intangible assets, goodwill and other assets 624,733 620,983 Deferred federal income tax provision (benefit) 150,200 (94,100) Changes in assets and liabilities: Accrued interest receivable (53,931) (226,708) Other assets (179,963) 34,670 Accrued interest payable 19,767 34,278 Accrued taxes and other liabilities 227,208 549,879 Net cash provided by operating activities 6,402,348 5,411,581 Investing activities: Repayment of mortgage-backed securities 13,150,235 6,434,075 Proceeds from sale, call and maturities of securities available for sale 29,080,155 31,515,569 Purchases of securities available for sale (59,102,870) (60,728,672) Purchase of FHLB stock - (24,500) Net increase in loans (15,054,983) (35,638,379) Proceeds from sale of other real estate owned 134,775 210,030 Capital expenditures (1,843,032) (845,690) Intangible assets obtained in branch acquisition - (1,109,795) Net cash used by investing activities (33,635,720) (60,187,362) Financing activities: Net increase in deposits 39,887,183 52,335,662 Net change in repurchase agreements 494,087 (320,956) Net repayments of FHLB advances (17,719) (18,703) Dividends paid (855,360) (738,000) Net proceeds from issuance of capital stock - 3,378,533 Purchase of treasury stock (65,300) (208,080) Proceeds from sale of treasury stock 65,300 208,080 Net cash provided by financing activities 39,508,191 54,636,536 Decrease in cash and due from banks 12,274,819 (139,245) Cash and due from banks, beginning of year 7,257,828 7,397,073 Cash and due from banks, end of year $ 19,532,647 7,257,828 Supplemental disclosures of cash flow information: Non-cash change in unrealized (gain) loss on securities $ (384,091) 1,583,476 Real estate owned acquired through foreclosure $ 414,225 295,645 Cash paid during the year for: Federal income taxes $ 931,033 860,041 Interest $ 1,571,798 1,512,629 See accompanying notes to the consolidated financial statements