Local farmers planting a new crop of hazelnuts. Shareholder Report

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1 Local farmers planting a new crop of hazelnuts Shareholder Report 2017

2 Letter from the CEO & Board Chair Daniel J. McDowell President & CEO Kerry Johnson Board Chair Dear Shareholders, We re pleased to state that 2017 was a great year for Willamette Community Bank, and we have a lot to share. With an enhanced image and a new location, we ve become the second-fastest growing bank in Oregon! We launched our new website in January to very good reviews. We also unveiled our new branding, complete with a new logo, which is cleaner and brighter and generates greater opportunity in the communities we serve. As our name suggests, Willamette Community Bank was founded to support the communities in which we operate. Last March, we opened our third branch location in Downtown Salem. We expected the new location to bring new opportunities and were pleasantly surprised with record growth in both loans and deposits, a 23% increase over the prior year. As anticipated, the expenses associated with the new location decreased profitability from 2016, but less than expected, as we saw nearly-offsetting revenue from the strong balance sheet growth. Salem is Oregon s second-largest banking market in terms of deposits; we expect it to remain a catalyst for growth. We re thrilled to report a new member to the Leadership Team. David Frances joined Willamette Community Bank as Chief Credit Officer in July of David brings more than 30 years of credit experience with other institutions in various roles, including Chief Credit Officer, and enhances our capabilities significantly in this area. At last year s annual meeting, we announced a 2% stock dividend to our shareholders. This was the third time in our history that we ve provided a direct return to our investors. Our stock price also increased substantially during the year, from a low of $8.96 to a high of $11.01 per share. As our name suggests, Willamette Community Bank was founded to support the communities in which we operate. We remain committed to supporting all the communities we serve and looking for ways to increase our involvement. We encourage our employees to participate in non-profit boards and volunteer their time for community-oriented events, often during work hours. During 2017, we donated over $22,000 to more than 40 local non-profit entities. We also partner with many of our customers in supporting local causes. Challenges and opportunities will surely present themselves in We re confident that we have the right team in place to capitalize on the opportunities and face the challenges positively on behalf of our employees, customers, and shareholders. 1 Willamette Community Bank 2017 Shareholder Report

3 Willamette Community Bank is a service-focused community bank with a team of caring employees, passionate about doing what s right for our customers, for each other, and for the bank. 3 Performance Highlights 4 Industry Spotlight: No Dinx 5 Donating to a Good Cause 6 Salem Branch Ribbon Cutting 7 Community Sponsorships 9 Testimonial 10 Board of Directors Willamette Community Bank 2017 Shareholder Report 2

4 Performance Highlights Net Income (000s) Net Income $440 $559 Per Common Share Data Earnings per Share Basic $0.42 $0.54 Book Value $10.97 $10.65 Performance Ratios Return on Average Assets 0.39% 0.57% Return on Average Equity 3.89% 5.14% Balance Sheet (000s) Loans $92,142 $73,487 Securities $19,506 $12,162 Total Assets $118,886 $98,281 Non-interest-bearing Demand Deposits $29,042 $22,321 Interest-bearing Deposits $78,174 $64,793 Total Deposits $107,216 $87,114 Shareholders Equity $11,409 $11,070 Net Interest Margin Earning Asset Yield 4.59% 4.80% Cost of Funds 0.28% 0.21% Net Interest Margin 4.33% 4.60% This report has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation. 3 Willamette Community Bank 2017 Shareholder Report

5 Corey Barton, owner of No Dinx (L), & WCB representative Francisco (Frank) Bermúdez Jr. (R) Industry Spotlight: No Dinx No Dinx is one of the mid-valley s oldest and largest screen-printing companies. It was founded in 1989 by two volleyball teammates who wanted to create, brand, and sell volleyball apparel. The high quality of their services quickly propelled them to the national market, offering screen printing, embroidery, design services, banners, signs, and printing though they ve continued to prioritize their local community, especially local schools. Willamette Community Bank works with No Dinx hands-on, striving to understand not just how they look on paper, but who they are and how we can help them achieve their goals and dreams. Over the course of our relationship, No Dinx has doubled its employees and increased its revenue locally and nationally, expanding what it s able to offer its employees and customers. I was really taken by the relationship, said No Dinx founder Corey Barton. Frank really took an interest in our business. He s more than happy to sit down with me, go over our financials, and help me plan for our future growth. Also, he shares great barbecue recipes. Willamette Community Bank 2017 Shareholder Report 4

6 Willamette Community Bank gives a donation to Deputy Erik Douglass and Special Olympic representatives. Donating to a Good Cause Last spring, Deputy Erik Douglass of the Marion County Sheriff s Office approached Willamette Community Bank with a sponsorship opportunity: the kids competing in the Special Olympics of Salem needed new softball equipment. We responded with a donation of $250, glad to support an organization that does so much for our community. Willamette Community Bank is proud to support their vision of bringing everyone with intellectual disabilities into the larger society as active, respected, productive citizens. Special Olympics Oregon offers year-round training and competition in Olympic-type sports for children, youth, and adults with intellectual disabilities. In so doing, it provides them with opportunities to build fitness, demonstrate courage, find joy, and participate in their communities. This project serves the largest disability population in Oregon, and has more than 14,000 participants a year. It s also continually expanding in an effort to reach every individual with intellectual disabilities who s qualified to compete. This project serves the largest disability population in Oregon, and has more than 14,000 participants a year. 5 Willamette Community Bank 2017 Shareholder Report

7 WCB Founding Director and Board Secretary Selma Starns (L) & Salem Mayor Chuck Bennett (R) Salem Branch Ribbon Cutting Our newest branch opened its doors to Salem in One year later, we pulled out the big scissors to cut some ribbon. Our open house event was attended by about 100 guests, including County Commissioner Kevin Cameron, Marion County Chief Administrative Officer John Lattimer, then-ceo Dan Clem of the Salem Chamber of Commerce, and of course Chuck Bennett, Mayor of Salem. Mayor Bennett welcomed our guests and thanked Willamette Community Bank for its expansion into the Salem community, where our commitment to small business, local decision-making, and personal partnership with our customers will support economic vitality throughout the region. Willamette Community Bank 2017 Shareholder Report 6

8 Community Sponsorships It s about relationship. I ve worked with our lender for years. Tim Murphy, Bridgeway Recovery, Salem, OR ABC House Albany Area Chamber of Commerce Albany Downtown Association Albany Millersburg Economic Development Corp Albany Rotary Club Albany Optimist Club Altrusa Club of Albany, OR Bambinos Oregon Hoopla Benton County 4-H Livestock Judging Team Boys and Girls Club of Albany Boys and Girls Club of the Greater Santiam Boy Scouts of America Bridgeway Recovery Services Brownsville Chamber of Commerce Capital City Cycle share CASA of Linn County Center for Hope and Safety Clackamas County Jr. Livestock Auction East Linn Christian School Family Tree Relief Nursery FISH of Albany Friends of Salem Police Greater Albany Rotary Club LINK UP VETS Linn County Fair and Expo Linn County Shrine Club Linn County Youth Livestock Auction Linn-Benton Community College Foundation Marion County Service Department: Mid-Valley Rural Conference Sponsorship Oregon Bankers Association Oregon Dairy Women Oregon Ryegrass Grower Rotary Club of Salem Salem Area Chamber of Commerce April 2017 Forum Salem Chamber of Commerce Salem Leadership Foundation Salem Multicultural Institute Soroptimist International of Albany South Albany High School South Willamette Valley Honor Flight Special Olympics of Oregon Marion County Strategic Economic Development Corporation (SEDCOR) VFW661 Uniform Display Museum Willamette Heritage Center 2017 Sheep to Shawl Program Women for Agriculture Zonta Club of Corvallis After winning a Bocce Tournament, we donated our winnings to Bridgeway Recovery Services, a nonprofit focused on substance abuse. 7 Willamette Community Bank 2017 Shareholder Report

9 Linn County Fair Willamette Community Bank has a strong commitment to our community and its youth, so Linn County Fair has always been important to us. In fact, our involvement with the Fair predates the construction of our first branch. Currently, we sponsor its VIP hospitality area, where sponsors of the Fair can spend the whole evening with their families, relaxing over dinner and drinks while watching the show. Linn County Fair gives families a chance to come together, enjoy a local reunion all weekend long, and strengthen the glue that unites our communities. The role they play is valuable, and we re proud to support it. WCB Board Chair Kerry Johnson (L) & Ronda Sherman, Event Coordinator of Linn County Fair and Expo Center (R) CASA CASA volunteers advocate for children in our court system. Thanks to their care and attention, more than three in five foster kids have a friend in their corner: checking on their medical care, keeping their teachers informed, speaking up in court, visiting them at home, playing together, listening. They stay with these children until they ve rejoined their family, found a new permanent home, or reached adulthood. For kids in crisis, CASA volunteers make a difference. Last September, Willamette Community Bank was proud to sponsor a table at the I am for the Child luncheon in Lebanon, held at the Samaritan Event Center of Boulder Falls Inn, where we shared a table with keynote speaker Cheslah Barkdoll, CASA advocate. Contributions from events such as these empower CASA to break the cycle of abuse and neglect, providing vulnerable children the support they need to lead happy, healthy lives. (L R) Joan Reukauf, Robert Moore, Cheslah Barkdoll (CASA Advocate), Trina Henderson, Kristi Wagner and Teri Weller Willamette Community Bank 2017 Shareholder Report 8

10 Willamette Community Bank makes local decisions, and they have the perspective to understand agriculture. Bryan Webber, Bryan Webber Farms, Inc., Albany, OR Bryan & Kym Webber at Bryan Webber Farms, Inc. 9 Willamette Community Bank 2017 Shareholder Report

11 Board of Directors Kerry Johnson Founding Director, Chair Tim McQueary Director, Vice Chair Selma Starns Founding Director, Secretary Kent Hickam Founding Director Business Manager for Douglas M. Johnson, DMD ATI Wah Chang Department Manager for 37 years Former Partner of Bartley & Starns, CPAs Former Albany City Councilor Bryan Webber Founding Director Tom Ordeman Founding Director John Jenks Director Joe Leblanc Director President of Bryan Webber Farms, Inc. Operates Fisher s Funeral Home, a fifth-generation family business Joined family business Jenks Hatchery in 1984 Les Schwab Oregon Area Manager for 37 years James Green Director SVP, CFO, Board Secretary of Epic Aviation for 20 years Daniel McDowell Director National & community banking experience, 28 years At Willamette Community Bank, we want to be part of the fabric of the communities we serve. Kerry Johnson, Board Chair Willamette Community Bank 2017 Shareholder Report 10

12 Willamette Community Bank goes the extra mile to make sure everything is good for us. Peggy Young, CFP, Inc., Salem, OR Albany Branch 333 Lyon Street SE Albany, OR Lebanon Branch 1495 South Main Lebanon, OR Salem Branch 315 Commercial Street SE Suite 110 Salem, OR willamettecommunitybank.com The Willamette Community Bank Audit of Financial Statement for 2017 can be found at willamettecommunitybank.com. For a printed copy, please contact our Albany Branch.