Years Strong 2016 ANNUAL REPORT Advancing our mission to Grow Businesses, Create Jobs and Build Communities

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1 35 Years Strong Advancing our mission to Grow Businesses, Create Jobs and Build Communities Serving all of Wisconsin and 14 Minnesota Counties, including the Twin Cities Metro Area ANNUAL REPORT

2 DAN SCHNEIDER CEO Report Life was different in Apple Computer was positioning to be the workplace computer of the future and its young charismatic leader, Steve Jobs, was working to replace all of the typewriters at Apple with the new Apple II computer. There were no cell phones, no internet and quietly in Madison Wisconsin WBD opened its doors and began helping small businesses get access to the capital they needed to grow and create jobs. Despite having worked with thousands of businesses and lenders, deploying over $2 Billion in financing, supporting the creation of nearly 64,000 jobs we have primarily remained a behind the scenes company, well known to our lending partners, but generally unknown to the rest of the world. Our Resources are Your Resources For over 35 years WBD has been creating jobs, growing businesses and building communities. We are proud to have created nearly 64,000 jobs, provided over $2 Billion in direct financing, helping leverage over $6 Billion in support for small businesses. Our network of Loan Officers are committed to the communities they serve and make working with WBD easy and local. The past year has been a year of evolution and change. We have made the transition from Wisconsin Business Development Finance Corporation to WBD Your Business Finance Resource. Along the way we have realigned our efforts to better match our skillset, strengthened partnerships with organizations able to serve needs outside of our expertise and committed to a total review of all of our internal operations to improve efficiency, customer satisfaction and results. I know we can do more if we do a better job of telling our story. It s a story of a company with the tools to really help small businesses grow and succeed, the people who know how to get it done and the lending partners who share our commitment to finding the best solutions for their small business clients. I am confident that we are the best version of WBD yet, but we will not rest on our laurels. We will continue to: Keep our primary focus on where we can do the most good the SBA 504 Program Expand the visibility and knowledge of WBD and the programs we offer Review all operations to improve efficiency and the customer experience Build on our national reputation as some of the leading experts in our field Continue to challenge WBD staff to strive for excellence and empower them to make changes that help us meet our goals As a nonprofit, when we succeed there are a whole lot of winners. Businesses are able to grow and create jobs; lenders are able to keep valuable relationships in their communities and we reinvest our earnings into other economic development activity. Our Premier SBA financing and refinancing product. Partnering with local lenders to provide WBD Advantage Fund Previously known as the Lincoln Opportunity Fund. Provides When it comes to understanding the SBA, we speak the language. Make WBD your institution s My expectations are high for the year ahead, which starts with exceeding those of our lending partners and borrowers. With this in mind please feel free to contact me directly with any questions, comments or concerns. Your opinion matters. long-term, fixed-rate, financing for small business real-estate, equipment purchases and financing for smaller projects utilizing SBA Community Advantage. partner to take your lending options to the next level. Whether it is packaging 7(a) loans, training Sincerely, business acquisitions. Great rates and lower down payments WBD Growth Fund Growing your staff in the ways of the SBA or providing on demand technical for borrowers and reduced risk businesses and communities with support for your SBA operations, Dan Schneider President/CEO for lenders makes it a win-win program. New Markets Tax Credits. WBD is your partner for success.

3 ADVANCING OUR MISSION Creating Jobs Jobs Created According to the SBA, since 1990 big business has cut more than 4 million people from its labor force, while small businesses have added 8 million jobs. At WBD we love small business, but we know that it is really about the people. We measure our success in many ways, with job creation being among the 63,948 CUMULATIVE WBD JOB CREATION 1, Spotlight On Success WBD Small Business of the Year Winner, Western Container Helping an established business grow and double its workforce! most important ways we serve our mission. Since 1981 we are proud to have helped create nearly 64,000 jobs. For those who get the jobs the benefits are numerous from economic independence to supporting families and providing for retirement. For the economy it means more tax dollars and spending with other local businesses. For each community it means citizens with a reason to stay, get involved and build a better future. PUTTING WBD S JOB CREATION EFFORTS IN PERSPECTIVE Employment levels of well-known employers: 15,000 UW Madison 15,000 3M (Minnesota) 10,000 Menards Inc. 9,500 Epic Systems Corp. 8,500 Delta Airlines (Minnesota) 6,000 Thedacare, Inc. Total 64,000 Jobs* *Similar number of jobs quietly created by WBD borrowers Accommodation & Food Service Agriculture, Forestry, Fishing & Hunting Arts, Entertainment and Recreation Home Care & Social Assistance Manufacturing 430 Other Services 149 Professional, Scientific, and Technical Services 332 Retail Sales 26 Wholesaler Created 825 Total Jobs in FY2016 Originally founded by Harold Lemm, Western Container has been in the spiral wound paper tubing business since 1942, but it would be a business partnership with current owner Jeff Perrigo s great grandfather and his two sons that moved the business from Milwaukee to the Beloit area, where it still is today. Despite their growth and success, Western Container was having trouble finding financing for some new equipment in 2010, and they were referred to WBD by the Rock County Economic Development Office. WBD s Diane Byler worked with Gateway Community Bank to deliver the financing in what would be the first of five 504 program loans for equipment and expansion projects over the next six years, resulting in a significant increase in capabilities and a doubling of the workforce along the way. Now, as one of Beloit s oldest companies with 43 employees and growing, Western Container continues to serve a wide variety of regional customers in the industrial packaging, film, tape/label and strapping core sectors, servicing such recognizable names as Larson Storm Doors, 3M and Avery/Dennison, along with many others.

4 ADVANCING OUR MISSION Growing Businesses Whether a business is just getting started or looking to grow after years of success, working with WBD can improve the chances for successful business growth. With the help of the SBA 504 Program, working with WBD is the best way to preserve cash flow while expanding. Requiring only 10% down and providing low, fixed, longterm rates demonstrates why WBD is Your Business Finance Resource. The experience that comes with years of exposure to businesses in every sector of the economy helps WBD understand our customers and the challenges they face. As SBA experts, you can count on the WBD team to 10% TOTAL LOAN AMOUNT $636,488,291 17% 4% 18% 6% 5% 5% Portfolio Overview Accommodation & Food Service $114,800, Loans Agriculture, Forestry, Fishing Hunting $38,215, Loans Arts, Entertainment and Recreation $35,208, Loans Home Care and Social Assistance $32,532, Loans Manufacturing $143,393, Loans Other Services $74,981, Loans Professional, Scientific, and Technical Services $62,071, Loans Spotlight On Success WBD Emerging Business Award Winner River Stone Kennels Two young entrepreneurs gain national recognition and bring a small business dream to life. In 2011, Josh and his wife, Whitney, opened River Stone Kennels in New Richmond, WI. With six old kennels donated from a veteran trainer, Josh can recall wondering, How am I ever going to find six clients? But Josh had a vision. explore every possible way to find solutions to financing small business growth and expansion. WBD solutions put the needs of the business first, showing why it pays to know all of your options. 12% 23% 1,304 TOTAL LOANS Retail Trade $110,569, Loans Wholesale Trade $24,714, Loans In 2014, Josh began discussing options for expanding the business with WBD, and together with Hiawatha National Bank, he moved forward in 2015 to purchase a new facility and 60 acres of land. Now complete, River Stone Kennels has 35 kennels, plenty of terrain for training, and two new employees to help out with the 24/7 operation. Today, with enthusiastic referrals from satisfied customers, his kennels are full, and a five month waiting list, Josh no longer Length of Time in Business of Borrower has to wonder where clients will come from. He is proud to have trained dogs from 22 states, Canada and England. Josh s Years in Business FY 16 Approvals efforts continue to earn him accolades from across the industry. 5 Years or Less Years Years Years Years Years 7

5 ADVANCING OUR MISSION Building Communities WBD is committed to being a local partner ST. LOUIS all across Wisconsin and in the Twin Cities LAKE Metro Area of Minnesota. With a team Spotlight On Success of SBA expert Loan Officers living and working in communities across our service area, we have our finger on the pulse of MORE JOBS local economic development everywhere. Through our track record of support to small CARLTON businesses in nearly every county in our area and great relationships with hundreds of WBD Community Impact Award Winner Johnstone Supply of Duluth, MN shows that the right culture is good for business and the community. BAYFIELD DOUGLAS lenders we demonstrate our commitment to IRON ASHLAND strengthening communities. VILAS BURNETT SHERBURNE SAWYER ANOKA ST. CROIX CARVER DAKOTA PIERCE FOREST RUSK BARRON MARINETTE LINCOLN WASHINGTON HENNEPIN RAMSEY SCOTT ONEIDA PRICE POLK LANGLADE TAYLOR CHIPPEWA MENOMINEE DUNN PEPIN MARATHON WOOD BUFFALO TREMPEALEAU JACKSON PORTAGE WAUPACA MONROE ADAMS JUNEAU DOOR OUTAGAMIE BROWN KEWAUNEE MANITOWOC WINNEBAGO CALUMET WAUSHARA LA CROSSE OCONTO SHAWANO CLARK EAU CLAIRE HOUSTON Hiring people with the right values and nurturing a corporate culture has made Johnstone s team a family. Additionally, they are committed partners of tomorrow s tradesmen, partnering with Technical Colleges by donating equipment, assisting in training and education, and hosting tool shows. FLORENCE ISANTI CHISAGO WRIGHT WASHBURN MARQUETTE GREEN LAKE FOND DU LAC SHEBOYGAN VERNON RICHLAND SAUK COLUMBIA DODGE WASHINGTONOZAUKEE CRAWFORD IOWA DANE JEFFERSON GRANT LAFAYETTE GREEN ROCK WAUKESHA WALWORTH MILWAUKEE RACINE KENOSHA The Johnstone group participates in Project Heat s On, during which contractors annually volunteer their technicians, tools, vans, and parts to clean, inspect, and service appliances for those that are in need. They have created a special account to help supply this effort with HVAC products at a reduced cost. The team volunteers for and supports Feed My Starving Children, Women in HVAC, and the Minnesota PlumbingHeating-Cooling Contractors Association. And in addition to Johnstone s support for the University of Minnesota s athletic programs and many area public school districts, they have funded Hope Academy Scholarships, enabling kids from disadvantaged neighborhoods in Minneapolis to attend a school that engages their families in the educational process with great results.

6 LENDING PARTNERS Building Relationships that Deliver Results for Small Business Thank you to our new lending partners! (The following people did their first WBD 504 Loan in FY2016) Tom Armstrong - First National Bank of Park Falls Mike Britton - Dairy State Bank Andrew Brueggeman - Associated Bank Joseph Clapper - First Bank Financial Centre Delores Clayton - Milwaukee Economic Development Corporation (MEDC) Keith Crep - Anchor Bank Jake Dietz - Nicolet National Bank Greg Duscher - People s Bank of Commerce Mike Fleischman - Horicon Bank Michael Foley - North Shore Bank Greg Glisczinski - Citzens State Bank of Loyal Brian Gold - Citizens Bank Jason Gonwa - Tri City National Bank Jon Grossheusch - Oostburg State Bank Eric Gundersen - Minnesota Bank & Trust John Huber - Waukesha State Bank Lori Johnson - Lake Elmo Bank Tony Larson - DMB Community Bank Michael Lawrence - The Park Bank Bridget LeCaptain - Nicolet Bank Greg Lundberg - 1st National Bank Casey McClyman - State Bank of Cross Plains Matthew Nord - mbank Aaron Pearson - First Bank Financial Centre Kevin Raisbeck - Wisconsin Bank & Trust Carol Rosenthal - Waukesha State Bank Jeremy Schmidt - North Shore Bank Aaron Siegle - Eagle Valley Bank Joe Sturzl - Nicolet National Bank Ross Thomson - Signature Bank Al VanDenBroeke - Citizens State Bank Andrea Wolf - Bank Mutual John Zanghi - Horicon Bank Rick Zonts - St. Charles Community Bank Congratulations to our FY2016 WBD Lending All Stars Travis Bolcerek Bank of Wisconsin Dells Three 504 Loans Elite Lending Partners At the top of the ladder in 2016 were our two new additions to the Elite Lenders Club Matthew Wilcox and Andrew Boario. Andrew Boario WaterStone Bank Matthew Wilcox BLC Community Bank Lenders did their 5 th 504 Loan during FY2016 Lenders that worked with WBD during FY2016 have done six or more 504 Loans WBD worked with 83 different Lending Institutions in Wisconsin and Minnesota during FY2016 David Mills 1st National Bank, Waunakee Three 504 Loans Josh Yamat Commerce State Bank Four 504 Loans Trends OVERALL OBSERVATIONS SINCE 2014 Retail sales experienced a 61% decrease in number of projects. Average debenture size increased 32 % BY MAJOR INDUSTRY 88 % 62 % Accommodations and Food Service projects saw an 88% increase in average project size. 61 % 19 % Manufacturing grew in both number of projects (19%) and average project size (9%). For more details, please view charts at WBD SBA 504 Approvals Fiscal Year Number of Loans Total Project WBD Amount Number of projects increased 10 % BY USE OF PROCEEDS 22 % 40 % 55 % 61 % Lender Amount Number of purchases increased 62% Number of new construction projects decreased 22% Average project size increased for both purchases (40%) and new construction (55%) Average project size decreased 61% for equipment only projects Borrower Contribution $289,595,093 $104,810,817 $144,284,702 $40,499, $295,808,593 $101,786,861 $151,135,385 $42,886, $201,382,021 $71,921,426 $100,668,516 $28,792,079

7 Senior Lender Jason Monnett Minnesota and WI Border Areas April Nelson Northwestern WI Mike Dieckman Central/North Central WI Kyle Kuntz Fox Valley/Northeastern WI Jeff Sheffler Matt Wilcox WBD Board of Directors Jeff Bowman Steve Burgess, Past Chair Deb Clements Dave Earll Kim Kindschi, Chair Bill Mitchell Dave Muehl, Secretary Steve Peterson Tim Schneider, Vice-Chair Steve Shellman, Treasurer Dan Schneider, WBD CEO Southwestern WI Diane Byler Southeastern WI Steve Kohl Nick Drewsen (800) South Biltmore Lane Madison, WI 53718