Touchmark Bancshares : Annual Report 12 31 2021

TOUCHMARK BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

TOUCHMARK BANCSHARES, INC. AND SUBSIDIARY

TABLE OF CONTENTS

DECEMBER 31, 2021 and 2020

Independent Auditor's Report .......................................................................................................... 1‐2

Financial Statements

Consolidated Balance Sheets ....................................................................................................... 3

Consolidated Statements of Income ............................................................................................ 4

Consolidated Statements of Comprehensive Income (Loss) ....................................................... 5

Consolidated Statements of Changes in Stockholders' Equity .................................................... 6

Consolidated Statements of Cash Flows ...................................................................................... 7‐8

Notes to Consolidated Financial Statements ............................................................................... 9‐40

NICHOLS, CAULEY & ASSOCIATES, LLC

3550 Engineering Drive, Suite 250

Peachtree Corners, Georgia 30092 404-214-1301 FAX [phone]

INDEPENDENT AUDITOR'S REPORT

Board of Directors

Touchmark Bancshares, Inc. Alpharetta, Georgia

Opinion

We have audited the consolidated financial statements of Touchmark Bancshares, Inc. and its subsidiary, which comprise the consolidated balance sheet as of December 31, 2021, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Touchmark Bancshares, Inc. and its subsidiary as of December 31, 2021, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Touchmark Bancshares, Inc., and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Other Matter

The consolidated financial statements of Touchmark Bancshares, Inc. and its subsidiary for the year ended December 31, 2020 were audited by another auditor who expressed an unmodified opinion on those consolidated financial statements on April 20, 2021.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Touchmark Bancshares, Inc.'s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued.

Atlanta | Calhoun | Canton | Dalton | Dublin Fayetteville | Kennesaw | Rome | Warner Robins 1

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

•  Exercise professional judgment and maintain professional skepticism throughout the audit.

•  Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•  Obtain an understanding of internal control relevant to the audit 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 Touchmark Bancshares, Inc.'s internal control. Accordingly, no such opinion is expressed.

•  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

•  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Touchmark Bancshares, Inc.'s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Atlanta, Georgia

March 1, 2022

TOUCHMARK BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2021 and 2020

2021

Assets

Cash and due from banks Federal funds sold

Cash and cash equivalents

$ 1,212,563

2020

$ 1,198,652

5,175,000 5,125,000 6,387,563 6,323,652

Interest‐bearing accounts with other banks 103,994,062 34,254,852

Securities available for sale 12,968,752 17,552,604

Restricted stock

Loans, less allowance for loan losses of $5,468,554

1,498,450 2,033,450

and $5,376,530, respectively 290,694,664 360,510,234

Premises and equipment Other assets

Total assets

Liabilities and Stockholders' Equity Deposits:

Non‐interest bearing demand

1,309,269 1,369,968 4,876,680 5,662,491

• $ 421,729,440

• $ 30,642,803

• $ 427,707,251

• $ 26,029,731

• Interest‐bearing 324,339,564 331,919,828

• Total deposits 354,982,367 357,949,559

Federal Home Loan Bank advances Other liabilities

‐ 9,000,000 3,568,908 3,443,702

Total liabilities 358,551,275 370,393,261

Stockholders' equity:

Preferred stock, no par value, 10,000,000 shares

authorized, none issued

Common stock, $.01 par value, 50,000,000 shares authorized, 4,475,891 issued and outstanding

‐

‐

44,759

44,759

• Paid‐in capital 46,880,651 46,880,651

• Retained earnings 16,171,492 10,089,885

Accumulated other comprehensive income

Total stockholders' equity

Total liabilities and stockholders' equity

81,263 63,178,165 $ 421,729,440

298,695 57,313,990 $ 427,707,251

See accompanying independent auditor's report and notes to consolidated financial statements.